Major Types of Product Sourcing Services

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The first phase in the supply chain process is often the process of procuring goods or services in a company.

When sourcing, it's important to strike a balance between the necessary raw material and product quality and price. Most procurement teams want to cut costs and improve their bottom line.

We discuss several types of product sourcing services in this post.

What is sourcing?

Sourcing is finding the best supplier typically entails determining the pricing range at which the business owner may obtain the quality products or services they require while still making the necessary profit margins.

Different types of sourcing

You can opt to engage directly with wholesalers, manufacturers, or sources from distributors, depending on your sourcing requirements and the products you are attempting to purchase.

So what kinds of sourcing should you take into account?


The most realistic and simple example would be employing a third party outside of a corporation to carry out tasks or produce things that were previously done within.

This can also be accomplished by moving operations overseas or collaborating with a local supplier. It is possible to outsource both front and back office duties.


In this kind of sourcing, you assign a task to a team or individual within the organization.

When offered, this alternative is preferred by most business executives because it offers a great cost-saving method and enables on-site evaluation of the essential goods and services quality.


This entails locating some of your operations close to the points of sale for your finished goods.

product sourcing services

Low-cost country sourcing (LCCS)

Materials for LCCS are sourced from nations with lower labor and production prices.

This kind of sourcing aims to lower an organization's overall operational costs. For the majority of multinational firms, China has emerged as the preferred place for this type of sourcing.

Global sourcing

The globe has become one big shopping mall. Crossing geographical boundaries to purchase products and services from global markets has become simple.

This approach offers a lot of advantages and exposes your company to a variety of markets. Additionally, you obtain knowledge about how business is done around the world.

Prime/Subcontracting arrangements

In this arrangement, a subcontractor and a contractor enter into a contract to carry out a specific task that is a component of a bigger project.

Since every contract involves two offshore organizations, it is governed by offshore law. Managing import or export limitations might be less of a hassle with the help of procurement teams.

Captive service operations

Some businesses even go so far as to create and run a partially or entirely owned firm abroad.

With this approach, you have more control over issues like confidentiality and security. Nevertheless, your economies of scale will suffer.  

Professional service

You can hire professionals in jobs in the service sector that need specialized training.


The process of making new products out of components or raw materials.

Vertical integration

Involves the joining of businesses in the same industry that are at various stages of production and/or distribution.

Therefore, a company's acquisition of its input supplier is referred to as backward integration, whereas its acquisition of businesses in its supply chain is referred to as forwarding integration.

Few or many suppliers

For commodity products, a multi-supplier strategy is frequently employed, and purchasing decisions are frequently made primarily on price.

While other suppliers might offer comparable products, single-source purchasing refers to purchases made from one chosen supplier. The term "sole-source procurement" describes transactions with just one supplier.

Joint ventures

This is a company that was founded by two or more people. Shared ownership, returns and risks, and governance are its defining traits.

Virtual enterprise

When a group of separate businesses (suppliers, clients, and rivals) is connected by information technology, they can share resources like costs and markets. As you can see, there are various sourcing methods.

Because of the different alternatives, there are considerable differences in how these connections are managed.

Contact us for your product sourcing services

Product sourcing can be a laborious and difficult procedure. We hope that this post has clarified some of the most important steps in the procedure and made it easier for you to start looking for products.

Please contact us if you require more assistance with the process or would like to be connected with vendors.


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