Product Sourcing

#008 - Julie talks about the topic she gets asked about the most: product sourcing.
In the first part of this episode, she shares specifically where and how she product source for Sparkle Hustle Grow. And then in the second part, she gives some pro tips on how to source the best items.

Main takeaways:

• Where to research and buy products (00:01:51)
• How to approach new vendors (00:09:09)
• Perceived value (00:16:11)

Links:

Sparkle Hustle Grow
Subscription Box Bootcamp
Amazon
Etsy

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Transcript

(00:01):

So you want to launch a subscription box and don't know where to start? Girl, you are in the right place. I'm Julie Ball, a subscription box coach and your host here at Subscription Box Basics, a podcast for new and aspiring subscription box entrepreneurs that want to avoid overwhelm. So grab a coffee, some pen and paper and let's have some fun!

(00:20):

Hey and thanks for joining me on another episode of Subscription Box Basics. I'm your host Julie Ball and I'm pulling back the curtain on my successful subscription box Sparkle Hustle Grow so you can learn how to start your own subscription box business.

(00:37):

Today we are talking about product sourcing, which by far is the topic I get asked about the most. Where do you get your products? How do you find your products? So it's one of the most fun things about subscription boxes, you know, curating the product selection, but also one of the most time consuming and therefore challenging parts.

(01:00):

And the first part of this episode I'll share specifically where and how I product source. And then in the second part of the episode, I'll give you some pro tips on sourcing the best items. As a subscription box owner, a lot of thought needs to go into what items you're going to choose for each month. So with Sparkle Hustle Grow, I start with a theme and then I build the products around that. They always have to be pretty practical, good quality, cohesive, kind of in what purpose they serve, but also from a color standpoint when we want them to look good because that can really impact the unboxing experience.

(01:36):

I'm always asked where do I do my sourcing? And I swear I'm always on the lookout. So when I go shopping at Target or Staples, when I'm online or I'll look on Amazon or specifically the websites of products that I've picked up along the way. The first place that I start sourcing products is at retail stores.

(01:57):

When you're just out there shopping at places like Target, WalmartStaples is a great place for me because I carry office supplies in my subscription box. But if you carry toys and games, go to toy stores. You get the point here, go to stores that carry items that would make a good fit.

(02:12):

When I'm out shopping, if I see a product that I like in the store, I either buy one to use in my box as a mockup or I take a picture of it so I can research it online. When I take that picture, I make sure that the product is in there, the retail price is showing, and then I usually turn it over the product, I turn it over and take a picture of right around the UPC code. Usually there's an item number, but you'll also find a website or a brand name there and that's where you can start your research.

(02:45):

Another thing to think about though, when you're looking at stores that are as large as Target and Staples is sometimes they have products that are custom made, like exclusively made for them. It might be that sells all over the place online and in stores. You can find them everywhere, but they might have a partnership agreement with someone like Target to get an exclusive product. So keep that in mind as you pick up a product at a retail store, it may or may not be available for the general public or for like a reseller like yourself to purchase. The next place I find products for my subscription box is Amazon. I don't buy them there, but I researched them there. Well I take that back. I did buy some stuff from Amazon in my first few months because it was convenient. I didn't know any better, but I'll talk more about that later.

(03:33):

Why I love Amazon though is because there are thousands and thousands of products in there, so you can really do some market research in there. Find products that you might not find in the retail stores or locally and even better, you can read reviews on those products. Before you commit to a product, you can look at those reviews and see what good things and especially what bad things people are saying about that particular product. So if they say it breaks easily, stay far, far away from that product. You do not want to put it in your box. So Amazon is another place. And to be honest with you, you guys, the first, I don't know, a month or two, maybe three, I did buy some products from Amazon to put into my subscription box. And here's why. Amazon usually has lower than retail price, but they don't have a minimum.

(04:23):

Like they don't say you have to spend $250 to get that product. Whereas when you reach out to a wholesaler, a brand that's trying to sell you their product, sometimes they have a minimum order level. In my experience, I've seen that minimum order be $250 sometimes even $500. When I first launched, I didn't need that many products because I was only shipping about 50 or so boxes. And so when I did look at places like Amazon or jet.com I did that to get some good pricing and, and basically trying to have a lower cost to entry to the products that I wanted knowing that eventually when I had more subscribers, I would easily be able to hit those minimum order levels to buy direct. The next place I find products for my subscription box is specialty shops. So specialty shops could be anything. They could be online, they could be in store, like a retail location.

(05:16):

And what that really means is if you're looking for stationery, go to a stationery shop. If you're looking for party supplies, go to a party supply store. Other places that are specialty shops would be something in my opinion, like Etsy, so a lot of times you can just research on Etsy, maybe find some great handmade goods that would make a good fit for your subscription box. And then you could reach out to that Etsy merchant and ask them if they do wholesale or ask them if they do discounts on bulk orders. And if you remember from past episodes, a lot of times that wholesale price is going to be right around 50% off. So it's a great place to find some products for your subscription box. Just be aware that you always want to get a sample. Always, always, always get a sample of a product, especially something on Etsy for example.

(06:04):

You want to make sure that it is built well and that it's good quality and the packaging actually matches what was shown in the picture on the listing. So ask them for a sample to get in hand to test the quality, to make sure you really love the product and that it fits in your box and you want to buy more of them. The next place I find products are retail trade shows, so this is something different. You might not have ever been to a retail trade show, but I'll just give you a quick example. Last year I went to a multi-day event in New York city called the National Stationery show. Yes, it's a thing and it's glorious. Imagine all of your favorite pen, paper, stationery and book vendors all in the same room and it's free to browse. I hear the angels singing, but in all honesty, it really is an amazing show.

(06:54):

We have so much fun at it and by taking the time to go to that event, we got to meet hundreds of potential vendors that had stationery. They had office supplies, some of them did custom work where you could get your brand printed on things. They had all kinds of things like calendars, pens, paper, and it was all in one place. For me and my team, we were literally giddy with excitement. So we spent the day walking around with my box in hand. Yes, I carry that box around under my arm so people can see it, recognize it. We can test products in it to make sure they fit. So we spent the day walking around with a box, introducing ourselves to vendors in person, getting their catalogs, their business cards and taking samples of their products, showing them what it would look like to be in the box.

(07:40):

We liked having the box there, not only to make sure it fit, but also for the vendor to see the excitement of what it would look like to be a part of the Sparkle Hustle Grow box seeing that actual box makes such a difference. And so I would encourage you to do some researching online to see what type of retail trade shows would be relevant to your industry. There's toy shows, there's a show for baby and kids called the ABC kids show. There's healthy food and natural foods expos. There's so many out there. You just need to find the ones that fit your industry and take the time to go to those events. Having everything in one place was not only super convenient, but it was so fun to share our journey on social media so our audience could follow along and they did. They were there for it.

(08:27):

We'd post picks of products and let them vote. We shared behind the scenes, we shared pictures with some of our actual vendors. It really created quite a buzz in our community. Plus we walked away with so many contacts and we did business with so many people. And a little pro tip on this one is that a lot of times vendors at these shows, like at these trade shows or expos have special deals if you order at the event. So if you go knowing your numbers, like how many you need for your next box or then you know the next three boxes you can go ready to purchase and you can likely get an even better deal than you could after the show or if you were just talking to them direct. The next place I find products for my subscription box is direct from the vendor.

(09:13):

So remember when I was telling you that when I'm at retail stores I either grab a product or you know buy it, take it home and take or take pictures of it. Then I like to reach out directly to that vendor or to that brand and here's exactly how I do it. The first thing I do after I take that product home or take pictures of it is I check their website and I look for wholesale information. This is specifically for the brand, not for the retail store, so not target.com but you would look at poppin.com for example, if I was looking to buy a product from Poppin that I got at Target. So if I go to their website, if I can't find their wholesale information, I'll look for contact forums or even maybe just reach out to the company via social media. And this is almost always what I start with.

(09:59):

I say, "Hi, I run a monthly subscription box for female entrepreneurs and I'm interested in purchasing then I put the product name in bulk, who could I speak to about wholesale pricing?". And so that gets the conversation started. Super simple. One little sentence, basically never go in guns blazing asking for free product. Don't do it. Especially when you are brand new, you just want to first get the attention of the sales team and then you can provide them with details of your box, whether it's through this couple of lines of text and an email or maybe you send them a one-page media kit, which I can talk about in another episode. So at this time the conversation gets started. I like to let them know quantity, especially if it's a large number because that's going to get their attention. Also, when I'm having those first kind of back and forth conversations with them, I'll let them know my need by date and the zip code of my warehouse or wherever you're shipping addresses so they can estimate shipping.

(10:58):

It's really a lot easier than you would think just to get this conversation started and just again to get that contact name or a phone number so you can speak directly to someone specifically about your needs. And when I speak to vendors, I only consider a handful of items that are very specific to Sparkle Hustle Grow. Why? Because we have some limitations. For example, our boxes are six by nine by three inches, so if a product doesn't fit those dimensions, then I can't use it and I don't want to waste their time or get a sample of a product that I can't use. So you want to make sure that you consider the actual product packaging as you're considering these items. Once you have that conversation going with the vendor, you can ask things like if the product's going to compact loose or maybe with a polybag which is just like a clear plastic bag or will it have retail packaging with a hang tag or maybe it's in a box. You've got to think about, will the packaging design appeal to your audience?

(11:58):

And it may seem kind of weird to consider this, but depending on where you're buying from, you need to make sure that the packaging is in the right language. No offense, but when all the writing on a product package is in another language, Chinese for example, it can have a negative impact on the experience for my subscribers. They are sensitive to that. So it's just something else to think about. Another thing you want to think about is will it fit the budget? So at this point in my business, I know real well what price ranges I can consider for my budget. And I keep that in mind when I'm asking about products. But I also share that number with vendors. I say I'm looking for products in this price range. What do you have available? So you've got to know what's going to fit in your budget.

(12:43):

You want to think about, is it good quality? You always want to get a sample in hand before buying, especially when buying in bulk. You get it before you commit to that bulk order. And what you can do is just ask that vendor if you're serious about purchasing from them and once you kind of start establishing that relationship with them, you can ask them, "Can you please send me a sample?". And a lot of times they'll send you that sample free of charge, but sometimes you're going to have to pay for it to get one in house. It is so important though. If it's a product you really want to include, you definitely need to get a sample one way or the other.

(13:15):

You want to make sure that it's good quality. You want to make sure that product is up to your standards and that you can place that sample in a box mock up to see how well it fits. Especially with the other products that you're sourcing, both from a size perspective so the box can actually shut, but also aesthetically does it look good with the other products that you have sourced? You never want to be in a situation where a product physically doesn't fit. That's the worst. So if that means you carry a little measuring tape with you in your purse when you go shopping so you can measure products, so be it.

(13:51):

If you're talking to vendors, ask them what the packaging size is, not just what the product size is. Another thing that I consider is does it come in multiple colors? For example, Sparkle Hustle Grow, we prefer feminine colors, so like pinks, whites, turquoises. A lot of times we'll use metallics like golds and silvers, that type of thing, but I don't typically put in like green items or gray items or items that just aren't as bright and colorful and inspiring. So I want to make sure that the product I choose comes in a color that we prefer.

(14:25):

You will want to have that conversation when you're speaking to your sales rep because sometimes when you buy in bulk, they just assume that you will take the random color assortment that they offer on their website. But if you only want the pink ones, then you need to make sure that's clear and that there's no surprises when your package arrives. So we talked a little bit about things to consider, but let's go back to talking about places where I find products. The last place I find products for my subscription box is through distributors. And so a distributor is kind of like this middle-man that sits in between the vendor and the buyer. They're kind of like this connector that sells on behalf of the brand. You'll find that a lot of large brands use distributors to so, well in my opinion, I think it's who they can have a further reach without having so much of that staff, that sales staff in house, they can just sell to the one distributor and then the distributor has the channels to get it out in all the retail outlets.

(15:25):

And so I don't deal with distributors a whole lot. I don't. I found that I just don't need to. There are some craft companies and office supply brands that I know. Post it for example, in the past I've tried to buy post-its direct and they use distributors because I've tried to reach them. And when I got information with phone numbers and email addresses they said these are our distributors that we work with. You'll want to speak directly with them to get your hands on our product. So those are the places where I find products for my subscription box, retail stores, Amazon, specialty shops, and even places like Etsy, retail trade shows, directly from the brand or directly from the product maker and then through distributors. Before you buy any products for your box, let's take a minute to talk about perceived value. I'd like to give you some tips on this cause it's super important.

(16:19):

As part of the product sourcing process. Perceived value refers to the value that your subscriber perceives the product to be worth. It gets kind of tricky though because you have to really think hard about this. So often people will buy on Amazon and Amazon prices are typically less than the retail price, less than what you would buy in store. And trust me when I say that, if you include Target dollar spot items or items from the dollar store, your audience will know they shop those places too, right? So unless you want that perceived value of it being a dollar spot box, just don't buy those items. Don't include them. Include things that are going to have a higher perceived value. So here's some things that can improve perceived value. Brand names. People love to be surprised with products from their favorite brands. And aligning with those reputable brands helps you build your own brand's perception and reputation.

(17:18):

Another thing to think about with perceived value is quality. Is the product cheap looking or is it built solid? You know, what is it made of? So if it's plastic, specifically white plastic for example, it does it feel solid or does it feel like really cheap plastic? You guys know what I'm talking about. You can tell when a product feels or looks cheap. Another thing that improves perceived value is size. So if a box is packed with lots of small items, it really can feel less valuable. So you want to choose of different sizes and use filler like crinkle cut for example, if needed to give the illusion of a more full box. And if you happen to have a lot of small items, add that extra filler like crinkle cut to the bottom of the box to make the box actually look more full when it's first opened.

(18:06):

Don't just pile a bunch of crinkle cut on the top, put it on the bottom, and that can help improve perceived value if you do have a lot of small items. But in general I would suggest that you have a very good assortment of different sized items. And another thing that can improve perceived value is the weight of items. This one might seem strange at first, but if you think about it, sometimes a heavier item can feel more valuable and maybe heavier because it's made with higher quality materials or maybe it's just a larger item in general, but for the most part when you pick up a box, specifically a surprise box, like a subscription box and it feels heavy, it gives us this perceived value of, wow, there's a lot in there. It must be really good. So while we're talking about weight, there's another thing you have to think about though.

(18:55):

You have to remember weight can play into your shipping costs depending on your carrier and depending on how you ship. For example, say you use US postal service first-class rates, the rate does vary based off of how heavy the item is. But if you use USPS cubic rate shipping at the time of this recording, you can fill that same box with as many items as you want. As long as it's under 20 pounds, it's still going to be the same shipping rate. So just something to think about when it comes to the weight of the box and weight of items. Another thing that can improve perceived value is packaging of the product. Is it packaged in a box or does it have a bow or is it loose- packed? Additional packaging can make the unboxing experience more fun. So when I first started, I did buy some products that were in really boring packaging and then I repackage them with labels or with bows or things like that just to make it a little bit more, you know, make it look more valuable and, and make it a little more fun to see it and to open it. Now just keep in mind you don't want to get into a habit of repackaging a lot because as you scale, that is definitely going to become a challenge come packing week when you have to repackage a lot of smaller items before you can even put them in your box. So just something to think about. Another thing to think about when it comes to perceived value is cohesiveness. Does your product variety look good together? Does it have a common theme? Themes of course are not a requirement but it can definitely improve the perceived value because in photos and just you know as someone opens up the box and lays out all the products, if they do have that common theme, if they have similar color schemes for example, even it just looks better and when something looks better it has a higher perceived value.

(20:40):

And lastly, I really believe that handwritten notes can bring a personal touch to the unboxing experience and help improve perceived value by making your brand more human. When I first launched Sparkle Hustle Grow and my first month I included a handwritten note thanking them for being a founding member and I remember seeing people post those all over social media about how much they loved that personal touch that nobody does that anymore. Now of course we are at the point where we can't write handwritten notes and every single month box because of the quantity, but we do make sure to reach out with handwritten notes on other occasions. For example, if someone hits a certain milestone or maybe they've been a subscriber for a year, or we've found that they had a bad experience because of a previous product was broken, that merits a handwritten note. When we send that replacement product, sometimes we write that handwritten note and it will help improve the experience and ultimately improve the perceived value of your entire box.

(21:36):

Next, we're going to do an exercise to help you with your own product sourcing. On a piece of paper, I want you to brainstorm a list of dream items for your box. Regardless of the cost, regardless of the size, this is just an exercise to get it all out of your head and onto paper. Write down all the different items that you think your target audience would absolutely love to receive in their box. So later on when you determine your box size, you're going to come back to this page and circle the items that would fit in your box dimensions and start researching those prices.

(22:06):

And one more tip. As you're thinking about products and you're out shopping, if you see an item in store or online, remember from the wholesale basics episode that the standard wholesale pricing is usually about 50% off. So for example, if you see a product in store for $5, the wholesale price is pretty likely going to be about $2 and 50 cents. So that should give you a good guide as you determine your box price and then as you start mocking up your boxes and determining what products you're going to carry, that's going to help you.

(22:37):

If you need a refresher on how the wholesale pricing model works, go download my free PDF on how to make money with a subscription box business and you can find that directly at SubscriptionBoxBootcamp.com.

(22:48):

Okay, let's recap since we went over so much, we covered all the places where I research and buy products for Sparkle Hustle Grow and we talked about how to approach new vendors and I gave you some tips on perceived value.

(23:08):

I'm looking forward to diving into product sourcing topics even further in a future episode where we'll discuss how to get the best prices for your products. Until then, thanks for spending this time with me and I'll see you in the next episode.