Anybody Experienced in Turning Wholesale Items on eBay?

Discussion in 'Homesteading Questions' started by amelia, Jan 18, 2005.

  1. amelia

    amelia Well-Known Member

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    I've become interested in the idea of making a serious homestead income from selling wholesale or closeout items on eBay. I'm wondering if anybody here has done this, and what you have found. Is it a viable business? Any particular problems or pitfalls? How does one go about getting hooked up with suppliers? Thanks in advance for your thoughts!
     
  2. CraftyDiva

    CraftyDiva Is anybody here?

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    It's possible to do it, but and I do mean BUT, it takes money (big money). You'll have to find a manufacturer to supply you with the goods. They don't sell 2 of these and 4 of those, you buy by the gross (of each item) to get the prices that will make you a profit in reselling. As far as closeouts and overruns you'll find the same to be true, large quantities, no dozens of this and that, but truckloads and cargo container loads from overseas.

    If you have that kind of money to begin with your already set and don't need an added income. :D
     

  3. EasyDay

    EasyDay Gimme a YAAAAY!

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    This is not necessarily true. There are a few wholesalers out there that will drop-ship for you. When someone wins the auction, you order the item from the drop-shipper and pay for it. They will send a "blind invoice" (saying it's from you, not them) in the package directly to the customer, leaving off price paid.
    Unfortunately, MANY people know about these few companies so, in my research, I found that anything I thought would sell well, there was already 100 more of them already listed in ebay.

    Another issue I found was that the same items were being listed for such a LOW price ($.01) that it knocks out any competition. I think the phrase is "price gouging". It's illegal in most (all?) states, but I guess it doesn't apply to ebay, since it is worldwide. How else can someone sell a $600 digitial camera for a penny when the company charges me $150?

    Before you sell any goods on ebay (not counting your own personal stuff, I sell lots of that!), search for the same product on ebay, and you'll find out how many others have stumbled onto your "great deal".
     
  4. CraftyDiva

    CraftyDiva Is anybody here?

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    I don't think dropshippers are the same as wholesaling. The dropshipper is the wholesaler, and anyone who wants to deal with drop shippers better do their homework. Often times the fee outweighs any profit, plus with dropshippers you don't actually have the product in your hands. If you take the buyer's money and your dropshipper is out of stock, you have to deal with an irate buyer.
     
  5. EasyDay

    EasyDay Gimme a YAAAAY!

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    You're right, they aren't the same. But, there are wholesalers that will drop-ship. There are few wholesalers that will drop-ship without paying a membership or large fee, but they DO exist. These are the ones that everybody on ebay knows about.

    You are 100% correct about the "out of stock" issue. I've been on the receiving end of that, and it's frustrating. The wholesaler/drop-shipper I was working through would list how many they had available. But, even if they had 250 available today doesn't guarantee they'd have any by the time your 7-day auction ended. Too hard, so I moved on to other things.
     
  6. sapphira

    sapphira Well-Known Member

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    Be very careful and spie out the extra charges eBay puts on EVERYTHING, and eBay owns Paypal and the eBay stores and there are charges for all of that. AND I thought I could get qualified !! to sell on the travel category - free for the first month then 9.95 for the "square deal" you need to "qualify" to sell in this category and furthermore, ebay is raising their percentages about the middle of Feb. 9.95 or less sale will be from 2.5% to 5.something percent.
    I have done ebay for years but only as supplimental and mainly used books, took awhile to build up my reputation, selling is easy now but then they change things and it makes it hard again. Just be sure to know all your fees exactly before you start. And shipping is a killer - that's why I chose used books and media mail. You would be better off buying stuff and selling it. This is what ebay was originally designed to do and of course nickle and dime everyone to death. S.
     
  7. jacobs

    jacobs Well-Known Member

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    Ebay has just raised all of their fees. The prices for online business (which is what you would probably be doing) has doubled along with the insertion fees for each item. The final cost fee percentage has changed (higher) also making it harder to make money on ebay. There are a lot of ebay stores that will no longer be doing business with ebay. There are a lot of other auction sites out there you can check out as an alternative and there is a link to a site that has links to most of them, but alas, I can't remeber it. I'll see if I can find it. If you just have a couple of items ebay is the way to go though. Ebay just got TOO big and as with any company that takes the big share of the market, they feel they can do whatever they darn well please!
     
  8. Ken Scharabok

    Ken Scharabok In Remembrance

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    Often times those with $.01 listings make up the difference in the S&H fees. Some of these folks have feedback well into the thousands so they are selling to someone.

    Yes, yes, yes, yes.... Before attempting to buy anything for resale check out what your competition will be. Even if you are the first, as soon as others see your sales there will be competition galore.

    Example: Back when I had the salvage grocery I received about a half of banana box of slightly outdated hearing aid batteries. I listed them on eBay and they sold very well as I was basically the first in the market with these. Within about six months of my selling out prices had dropped about 90%. I also had this happen with health bars and batteries.

    The batteries were really something. To get a wholesale price I had to buy 25 cases worth divided by AAA, AA, C, D & 9V. Had a best-if-used by date five years out. Sold well at first since I was, again, among the first with very, very cheap batteries. Turned out to be worthless Chinese imported junk, and that is being kind. Almost everyone one who bought them complained about their short life in use, or they were dead out of the pack. Company in FL offered a replacement, but not a refund. Heck, why would I want to replace junk with more junk. They still have an open BBB complaint against them as a result. I finally donated what I had left to a thirft store for the tax write-off. Broke even at best, after a lot of fustration and three negative feedbacks.

    If you can hold them over, keep an eye out for seasonal close-outs. For example, early last Spring local Wal-Mart had some good winter gloves at 75% off. Wish I had bought some to try to sell about now.

    Check out what the wholesaler requirements are in your state. I have a TN sales tax account so I don't have to pay state sales taxes on items bought for use in the shop or for resale. However, it also allows me to buy at a couple of wholesaler merchandises at wholesale prices.

    Do a google search on wholesale pallet. May be something in your local area so you avoid forward shipping.

    Whatever you do. Start as small as possible. You will be amazed at the amount of time 'the paperwork' can take.
     
  9. CraftyDiva

    CraftyDiva Is anybody here?

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    I heard a rumor that eBay bought out Overstock.com, any truth? If this is the case they're getting bigger then they already are. Maybe it's time to buy eBay stock, seems that's the only way to make any money with them. :haha:
     
  10. Darren

    Darren Still an :censored:

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    The time to buy eBay stock may have come and gone. There are reports the sell-through rate is dropping. They still have lots of listings but fewer listings are selling. If you look around on the internet you'll find chat rooms where folks are complaining about falling sales. Stuff that used to be an easy sale now attracts plenty of watchers, but no bidders.

    If anything ,if you had the money, you might want to short eBay at some point.
     
  11. RedneckPete

    RedneckPete Well-Known Member

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    I have an elevator lifting motor and mechanism, removed from what else?? an elevator I was taking apart. This thing would have to be shipped in a crate and weighs at least a ton. Can something like this sell on E-bay??
     
  12. sisterpine

    sisterpine Goshen Farm Supporter

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    i would think that it could be as my neighbor bought a snowmobile from a guy in michigan and then it had to be shipped here to montana. shipping was just about the same price as the machine purchase! the machine was shipped freight on a semi!
     
  13. sisterpine

    sisterpine Goshen Farm Supporter

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    It was really odd to see this topic posted here. I just listed my first couple of items on ebay yesterday. I dont know if they will sell or if i will do more but i had been wanting to try this for quite some time. Living in montana has taught me to search places like ebay for things i want that cannot be found in my state (and that is most things lol). So i figure others may feel the same way. I am esp interested in selling my own artsy stuff so will have to see if it flies!
     
  14. comfortablynumb

    comfortablynumb Well-Known Member

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    "drop shippers" are not wholesalers even if they say "wholesale". they are resellers. there are 2 states of being in retail; wholesalers and resellers. there are no mioddlemen, if its a middle man its another reseller.

    first off, you cant just find a wholesaler and start buying, even large loads. you have to have a business, have a sales history ect. a real wholesaler wants to know they have a steady customer.. they are not intereseted in a few buys and you move on.
    you can hook up with wholesalers for real, but you need to have enestablished busines and tax ID#.....and a ready market you can show. wholesalers are PICKY.

    you can deal with a reseller... who dropships. your profit magin is gonna be very very low. rule of thumb is if you cant work with at least an 8% profit margin, your doomed, and with that youll barely eat and keep the lights on.

    go to;
    http://www.productsourcingscams.com/

    this fella does a great job of explination, this ebook is massive. yeah go to ebay buy the link for .99 cents, its worth the buck. sign up for the newsletters and read the whole site http://www.worldwidebrands.com/. the info is written spacificly for ebay sellers, and you can pick enough off the freebies to learn more than you can belive.
    I get the newsletter they send out its pretty intreresting.

    bottom line is a light bulk wholesaler where you will get a real wholesale price has a 500 dollar minimum. a regular wholesaler has a 10k min usually.

    trust me, I used drop shippers to sell tools on ebay and they are cheap buys... if anyone will buy them.
    Ive wasted time (years) tryig to figure out what you are trying to, and the 99 cent ebook showed me 100 times more...
    I dont deal with them there as wholesalers I dont have 500 at a clip to use a wholesaler.
    my sister keeps her head above water while she is unemployed now she sells everything she can scrounge up... it keeps her bills paid, so you dont really need a wholesaler..
    if ya got the money to put into it, you can do it if you sell the right stuff at the right time.

    drop shippers are resellers, they are just people who plunk out 10 or 20K for one shippment and then split the skids up for a markup... a small markup because they deal in BULK. 100 items where you profit only 2 bucks is 200 bucks. the person the sell it to might sell it at a 10 buck profit, the "dropshipper" isnt interested in their own low profit vs the buyer s high profit, because by the numbers the dropshipper is making more a month by far moving 100 skids at 8 or 10% profit than the end seller is selling a handfull at 25% or more profit.
    one has the ability to sell bulk the other has the ability to sell piecemeal... everyone has a nitch in the chain, and the top dog the wholesaler is makingn his 8% or more selling 100 times more a month than the dropshippers.
    the percentage is all they figure bottom line... if you can sell 100 units a month at a 20% profit magin thats great! the dropshipper is moving 1000X that at 8% because they have the cash to invest with and the room to store the goods.
    if you can store 3 or 4 skids of stuff at 1000's of buck in investment, AND sell it all for a good margin your doing good....
    what can you afford to INVEST? what do you have room to STORE. how liquid is the stuff you bought? whats your projected profit margin?

    the ebook tells you how to figure all that...
    dont fall for the dropshipper BS, you wont find a profitable dropshipper on the web, let alone one who advertises as a dropshipper.
    dropshippers are resellers, they are people like you with more room to store stuff and more cash to risk.

    Ive been scouting local auctions on the days they sell "anything" and I'm seeing stuff go by the case cheap cheap cheap I' thinking of investing in for ebay reselling.
    in this case, the auction is the wholesaler, oftewn better priced....
    lots of places to pick up "stuff".....
     
  15. inc

    inc Well-Known Member

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    thanks for all the info on ebay. i can see that it would be a waste of time. i wanted to get on ebay in the worst way about a year or so after it got going, wish i did.
     
  16. comfortablynumb

    comfortablynumb Well-Known Member

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    if you got the junk on hand... its great. some of your on hand junk can go for good money.

    my sister after she lost her job went to work for an ebay store here local, I dunno if you have ever seen these, you walk in toss your stuff on the counter and tell em to sell it, they take over from there and send you a check for your profit minus 30-40% comission. I thought that was pretty steep but think of it this way, stuff they will get 10 bucks for you will sell at a garage sale for 2, or less. so its clean and easy if you just want something slod and you dont wanna deal with it.
    she got let go from that job the guy hired her as a research and appraisal tech... basicly she researched stuf to find its resale value and then designed an auction to get rid of it. heres what hapened;
    the guy gives her a diamond necklace, says put it up for an open bid of 800 bucks, list it as real diamonds, but look and see what its worth first.
    so... she did. it was cut glass, really nice but pretty worthless. she tell him, and he throws a hissy. "list it for 800 and as real diamonds i will print up a cerificate of authenticity" :eek:
    she wouldnt do it, of course. she said its worth 100 bucks, anyone who knows will sue you for fraud.
    greedy boy gets a little ticked.... he listed it himself later.
    the next day he canned her.

    she was hired to authenticate and research, not lie. oh well!
    anyhow, shes printed up business cards and flyers to do the same thing herself from home, and I'm thinking what you are... whos gonna do that when they can do it themselves and save the 40%???? rediculous!

    well the more locals i hand a card or flyer to and explain the deal to, the more I find that people are lazier than I imagined. shes already getting people drop stuff a few times a week. :worship:
    I tell her for doing her legwork and promotion I want 3% of her 40% :haha:

    it might not last, but if it grows, we can both go in town and rent a small storefront for about 400 bucks (small town dead businesses) a month.

    since its a very localized type business thing, I dont feel threatened by sharing the idea with all of you! unless you live within 30 miles of me, then we will have to have to fight this out in the parking lot... :haha: aint room enough for 2 of us....lets rock.... :yeeha:

    consider that idea.... sis seems to be working it pretty well so far.
    if it gets better I might hike my fee to 5 %
    :haha:
     
  17. Quint

    Quint Well-Known Member

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    I know a guy and his wife who make a killing (in my opinion) on it. They sell more of the...um...adult oriented type of things like clothing and DVDs. They routinely make a 800-1200 bucks a month doing it and more if they actually put an effort into it.

    Kinda makes me wish my ethics and morals weren't so high.
     
  18. Ken Scharabok

    Ken Scharabok In Remembrance

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    Well, have been told the mark up on adult material is one of the highest in the entire industry. A retailer may pay $.50 for a tape and resell it for $10 or more. One reason is the 'actors' are paid next to nothing and they can crank out copies by the thousands. Have read if you are a good porno queen you might be $300 to $500 per movie. Guys get more because there is a very limited number which can 'get it up and get to off' on que consistently.

    Some folks with camcorders were making their own videos and selling them on eBay. Was a hot market at one time.

    Chatted with one guy on the Internet who said he was doing extremely well on adult material. He worked out of his garage and his neighbors didn't even suspect what he was selling. Merchandise was shipped to a friends business and he brought it home from there. He took outgoing packages either to the Post Office or UPS or Fed-Ex drop-off points.

    ------------------------

    My mark up target is 100% and I usually get it. However, net is more in the 25% range of gross. (Meaning if something costs me $10 and resell it for $20, I'm only pocketing about half of the extra $10.) Lots of associated expenses. Last year eBay/PayPal took 17% of the gross since I deal mostly in low dollar value items.

    Since 04 was my first full year, I now have some experience to look for ways to reduces expenses. Since I cranked up the price of much of my inventory, I expect to sell less, thus have to go after expenses even more.

    I can reduce my material cost by switching from hot rolled to cold rolled steel. Cold rolled in inferior to hot rolled, but shouldn't make a difference for what I use it for. Should reduce stock cost by about 20% as some of the stock I use doesn't come in cold rolled.

    I see a lot of sellers (well, seems like anyway) dropping PayPal as a payment method. It was about 1/3 of my combined eBay/PayPal costs. It sure is nice to get paid right away verses waiting a week for so for payment to arrive. I did OK prior to going with PayPal, just didn't like having packages lined up along the wallway waiting for a check or MO to arrive. (And I do add a $1.00 per shipment handling charge which does offset part of the PayPal cost. I have yet to have anyone question this handling fee. I am very open about adding it on in the description so it isn't a surprise to them.)

    (Added: For those not familiar with the feature, if you have a PayPal account you can go into HISTORY and request a monthly summary. For mine, it showed I received 248 PayPal payments and my PayPal fees were $366 for the last three months of 04. Thus, each payment cost me, in effect, $1.48. If I upped my handling charge to $1.50, I could essentially recoup my PayPal fees. It still wouldn't cover purchased packagiing material, such as tape.)

    I use bidder auctions almost solely to drive people to my store. I have been doing 4-6 a week. Those which sold recouped the listing fee; however, those which didn't only added to expenses. Am cutting that down to two a week, one on Monday and one on Thursday, both for 7-days. Here I will pay the extra for the sub-title of: Visit My Store: Poor Boy Blacksmith Tools.

    In bidding auctions I will continue to use a gallery (cost is going from $.25 to $.35), but won't use additional photos unless I absolutely have to or it is a big ticket item. I give the potential buyers the opportunity to request more photos.

    I have a couple of shop made big ticket items (over $100) which infrequently sell. When I list one of them as a store draw I will just list a bit lower than the store price and say in the description additional photographs and a lower buy-it-now price are available in my store. Intent is to drive people there with the hope they will purchase additional related items.

    Have signed up for a trial banner listing (three months) on what is the largest blacksmithing-related forum. Clicking on the banner will send them directly to my eBay store listings. Cost is $75.00 a month, but if they buy while there, eBay reduces the commission by about 1/3rd as a link-related (promotion) bonus. Thus, some of that $75.00 will be recouped that way. Unless store sales go up at least 1/3rd over last year during the three month test, I will likely drop the service. However, even if people don't buy the first time, they will at least know I am there. It would really take a big jump in sales to justify $900 a year for this referral service. Interesting enough to try.

    eBay may be starting their death spiral. At some point they are going to saturate their market, at least in the U.S. If sales decline, they have to try to maintain revenue by increasing listing fees and/or commissions. Fewer people sell, decreasing revenue, so they increase cost again. Fewer people sell...

    Take the increase in gallery photo cost as an example. Going from $.25 to $.35. An increase of 40%. However, say some of those previously using gallery photos stop doing so. Lower revenue increase then expected there. Also say there will be others like me who drop additiional photos. They were $.15 extra per photo. Before with two pictures, one gallery, cost was $.40. Now with only one photo, even if gallery, cost is $.35. They lost $.05 of previous revenue. Take $.05 and multiply it by a couple of hundred thousand auctions a day and it adds up. (And personally I am reluctant to open up an auction listing with no gallery unless their title lines really interests me.)

    For those not familiar with eBay stores. It is a subset of the auction feature. You list about as normal, but store cost listings are $.03 a month with one gallery photo and no extra pictures. Everything is buy-it-now. Commission on sales (which is going up about 50%). In exchange for the lower listing fees eBay don't have the auctions come up on a regular search. They will show to the left eBays stores with similar items and, if no regular auction listings are found, will list eBay store items for the buyer to see. I think I have about 230 eBay listings now, two regular auctions and the rest store listings.

    (And store listing fees are so low I have had items sit there for over six months or more. However, 6 x $.03 is only $.18 listing cost for that period. A regular auction for one week with a gallery would have cost about $1.00.)

    Ken Scharabok
     
  19. Janon

    Janon 993cc Geo Metro

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    Depending on where you are and what knowledge you have, buying off of Ebay and selling "locally" can have its advantages. Competition on Ebay is high and prices may be very low for certain items.

    I do use Ebay as a supplier, and in most cases, I already have buyers waiting for the items I'm purchasing. When you're an Ebay buyer, you don't care anything about listing fees, Ebay price increases, etc... because you don't pay them. Someone else also neatly boxs and packs your items. Your only concern is the price, the shipping and who the seller is.

    I also developed relationships with suppliers who I had originally purchased items from on Ebay, and now just use the phone and a credit card to make purchases (not Ebay listed items of coarse)... this allows me to purchase at even lower prices and reduces my turnaround time (they ship the day I call).

    cheers,
     
  20. Ken Scharabok

    Ken Scharabok In Remembrance

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    This is just background for those considering eBay selling. Numbers are based on my experience for 04 and are a little goosy, but I think they are within 10% +/-:

    Average buyer purchase: $23.65 (includes multiple buys by same buyer*)
    eBay average cost per sale: $2.55 (listing fees and commission on sales)
    PayPal average cost per sale: $1.39
    Total average cost per sale: $3.94
    As a percent of sales price: 17%

    For those who have done simiilar analysis, how do these compare?

    Ken Scharabok

    (* I do a fair bit of sales to past buyers. This includes each time they purchase, rather than a total per individual buyer.)
    --------------------------------------

    Added: You folks interested in doing consignments need to note the above. Say for the say of argument they are typical. Your commission is 40% of the sales price. Someone brings in an item and it sells for $50.00. You get $20. However, out of your share comes the eBay/PayPal fees of some $8.50. That leaves $12.50 for your time and effort (including packaging and shipping). Now say the buyer isn't happy. It is your problem, not the consignors.

    If you do this, at least insist on either PayPal or a money order. A bad check would fall in your lap.