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FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.com
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.com
The vast majority of people selling on eBay today, started out by selling a few things they had lying around the house. They soon realized that, not only was it incredibly easy to find hungry buyers on eBay, but also these buyers were prepared to buy just about anything.
If you’ve seen the amazing potential eBay offers, and have decided you want to increase your eBay sales, what next? However much unwanted clutter you have lying around the house, garage, or attic, sooner or later you are going to run out of things to sell.
Many successful eBay sellers will crawl all over yard sales, second hand shops, and the classified ads to try and find something cheap which they can then sell on for a profit. But this is unlikely to offer a reliable supply, and what if you want to sell items that aren’t available?
If you’ve decided you want to develop your eBay business, or any e-commerce business where you’re selling products, you’re going to need to find a wholesale supplier. A reputable and reliable supplier should be able to provide you with a volume of products at discounted prices, which you can then resell to make a profit, often with very healthy profit margins.
For some, the idea of working with a wholesaler might be a little daunting. How do you go about finding a reputable supplier who won’t rip you off, and when you find one, how do you approach them and what can you expect from them? The growth of the internet and the increase in the number of professional eBay sellers and other small businesses selling online has meant that the traditional image of a wholesale supplier has changed.
They are now much easier to find, easier to approach, and prepared to offer much more flexibility when it comes to dealing with small businesses, or traders who are starting out. Occasionally, you might come across a supplier who insists they are “trade only”, but as long as you are buying their products to resell in some shape or form, then you are a trader.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comSo you’ve decided you want to grow your eBay business, and to do this you are going to need a wholesale supplier. Before you start contacting suppliers, making agreements and ordering goods, you need to do a bit of planning. You’re taking the first steps towards building a business, and any good business needs a plan.
Firstly, you need to decide what you’re going to sell. You’ve probably already sold a variety of items on eBay, things you had lying around the house that you wanted to get rid of, or second hand items you picked up cheap from a yard sale. If you haven’t, then this is a great way to start as it gets your familiar with the selling process, and gets your some capital built up that you can use for buying in bulk. Deciding what you are going to sell will help make your search for a wholesaler easier. It’s always best to decide on a product and then try and find a supplier, rather than just pick a wholesaler and try and sell what they are offering.
Do you want to focus on low-priced items that are easier to sell? They’ll probably have lower profit margins but if you can sell a high volume of them you should still make a good profit. Or do you want to look at more expensive products that have more value to your customers? You might sell less, but the profit on each item will make it worthwhile.
The easiest way to answer these questions, and to be successful, is to sell what people want. If you spend some time now finding markets that are full of buyers ready to spend their money, it will make choosing products, and selling them, a lot easier. Notice that you are looking for hot markets rather than just hot products. Popular products come and go, but if you find a market that has people who are passionate about a topic, and prepared to spend money on it, you can then source a range of products to sell to them.
There are obvious hot markets; designer clothes, bags, sunglasses, and anything to do with iPods and mobile phones. However, there’s going to be a lot of competition and finding a reputable supplier who’ll provide stock at a price that makes you competitive, without having to invest a small fortune, is going to be tough. There are plenty of other successful categories on eBay, so take some time to look around and find a good niche.
There are plenty of free tools that can help you see what’s selling well, so you can decide what market you want to get into. eBay Pulse is great for seeing the most popular items in eBay’s categories, as well as what people are searching for, and should give you some
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comideas. There are other tools you can pay for that can give you much more detailed information, such as Terapeak, which many professional sellers use to find potential markets.
Once you’ve decided what market you are going to focus on, and the kind of products you want to sell, you can check out the completed listings on eBay to a) make sure these products are selling, and b) see what price they are selling at so you know if you are going to make money when you start sourcing them from wholesalers. Deciding on your market and your products can take a bit of work, but it will help you find suppliers, and give your business a greater chance of success.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comYou need to decide what type of supplier you want to work with. There are essentially three types; wholesalers, drop shippers, and manufacturers and there are pros and cons with each of them.
You will be able to find a huge number of suppliers across the world, for all sorts of products, particularly in Asia and the Far East. To get started though, it’s a good idea to stick to suppliers that are local - you should still be able to find plenty of choice and products at competitive prices. Then once you have more experience with wholesalers you can start working with suppliers in places like China, and benefit from the deals they offer.
Wholesalers buy large quantities of goods from the manufacturers and then sell them off in bulk to businesses, who in turn sell the items individually. Because you order items in larger quantities, the wholesaler charges you a cost per unit that will be below the market price; so when you sell each item, you make a profit. The larger the order you can place with the wholesaler, the more discount per unit you are likely to get.
There are pros and cons to using a wholesaler, and deciding if it’s the right choice for you will depend a lot on your situation. On the upside, a good wholesaler can provide a reliable supply of the items you want to sell, at a price that means you will make a profit. On the downside, most wholesalers are likely to have a minimum order size, which could mean you have to invest quite a bit of capital up front, as well as have somewhere to keep your stock, and if for some reason they don’t sell, you could be stuck with them. If you’re importing from abroad, you also need to be aware of any taxes, customs duties and regulations that might apply.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comDrop shippers offer a unique twist to sourcing wholesale items. Instead of supplying the goods to you in bulk for you to sell to your customers, they will ship them directly to your customers. Each time you make a sale to your customer, you purchase the item from the drop shipper and provide them with your customers address. The drop shipper then packages and sends the item without you having to get involved. Whilst you’re not placing bulk orders with the drop shipper, they should still offer enough discount on each item for you to make a profit.
Using drop shippers can be a great option when you’re starting out as it takes away some of the risks. You don’t have to invest in lots of stock, you simply buy from the drop shipper when you’ve sold an item. Also, you don’t have to worry about where to keep your stock as the drop shipper sends the goods straight to your customer for you. A slight negative of using drop shippers is that you will make less margin on your sales as drop shippers usually offer lower discounts and need to cover the cost of shipping. You also need to make sure your drop shipper is reliable, as any wrong or lost orders to your customers will reflect badly on you.
Wholesalers and drop shippers work by buying large quantities of products from the manufacturer and then selling them on to traders. Once you’ve got some more experience dealing with suppliers and understand how the process works, there’s no reason why you can’t deal direct with the manufacturers in order to get even greater profit margins. Just as with other suppliers, if you can meet their terms, a lot of manufacturers in places like China will be more than happy to deal with you direct.
When dealing directly with manufacturers you will usually have to make a significant investment in stock, so the issues of working capital and storage come up again. However, if your business is established, you have the space and can afford the investment, this could be a great way to increase your profits because manufacturers can always offer the best prices. Again, you need to make sure you are aware of the taxes, customs duties and other regulations that apply, but dealing with a manufacturer can mean other benefits as well as increased profits, which we’ll look at later.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comOnce you’ve decided which kind of supplier you want to work with, you then need to find one that can provide a reliable supply of the products you want to sell. Of course the internet has made finding most things a lot easier, but there are still a few of ways you can go about finding your supplier.
The easiest way is to go to Google and search for “wholesalers” or “drop shippers”. But this isn’t necessarily the best way as it really opens you up to the thousands of scams that are operating which target people looking for suppliers. To make sure you’re working with a good wholesaler, you could try using any of the numerous wholesaler and drop shipper directories.
These are websites that have hundreds, if not thousands of wholesalers and drop shippers for you to choose from all in one place. These directories are very popular, so you’re unlikely to uncover a supplier that few others are working with, and you might have to pay a membership fee to get access to the information. However, it is a quick and easy way to find wholesalers, and some of the better directories will have done some checks on the suppliers to make sure they’re reliable
If you’re prepared to do a bit more work, a good way to find a reliable wholesaler is to actually get in touch with the manufacturer of the product you want to sell. If you call them up and tell them that you want to sell their product and could they give you a list of their wholesalers, most of them will be happy to give you the information because it’s going to mean more sales. You might need to make a few calls to get through to the person who can give you the details, but it could be worth it as you are likely to get the names of reliable suppliers, which your competition might not know about.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comDropshipping is a method of selling and distributing goods wherein the distributor or supplier of the product (the dropshipper) sends the product directly to the end user (your customer) on the retailer’s behalf (that’s you).
The process of dropshipping is relatively simple. It involves three parties who take a product from manufacturing to market.Let’s use a blue widget as a sample product to demonstrate the process:
• The blue widget manufacturer: This is the company that manufactures the blue widgets. This widget manufacturer does not sell directly to the public or supply the retailers who ultimately sell the blue widgets to the end user. They prefer to use distributors to handle the task of taking their blue widgets to market. The manufacturer sells blue widgets by the truckload to distributors and charges $5 per blue widget.
• The blue widget distributor (dropshipper): This is the company that purchases blue widgets in bulk from the manufacturer and supplies them to resellers and retailers at a cost of $7 each. The distributor does not ship blue widgets to the retailer, but fills orders on the retailer’s behalf as the retailer sells the widgets to its customers.
• The blue widget retailer: This is the company that sells blue widgets to the public. In this example YOU are the blue widget retailer. The retailer orders the blue widgets from the distributor as they are sold (usually one at a time) and has the distributor ship the blue widget directly to its customer. The retailer sells blue widgets to the public for $10 each, which means that for every blue widget sold the retailer nets $3.
Note: It is not unusual for the manufacturer and distributor to be one and the same.FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.com
There are seven steps involved and they are as follows:
STEP 1: Choose A Product To Sell The very first step in any sales process is deciding what product to sell. This is not a decision to be taken lightly.
There are many factors that should be considered before deciding on a product.
We’ll talk more about the product selection process later, but for now let’s say that you decide to sell CD players on eBay.
STEP 2: Locate A Supplier Who Will Dropship For You Using a research tool like Google, Thomas Register, or an industry-specific resource like The Ultimate eBay Dropship Power Pak, you search for and find a company who will dropship CD players for you.
The company offers you a 35% mark up over cost, which means that they will supply the CD players to you for $100 each and you should be able to retail them for $135.STEP 3: Set Up An Account With The Dropshipper You contact the company that can supply the CD players and set up a reseller account with them. This can often be done online or by phone, but some companies will require that you complete and return a reseller application to open an account.
Some companies may also require a tax ID and business license. If you are serious about your business, you should get these items. We’ll discuss this more shortly.STEP 4: Advertise The Product For Sale Now that you have your supplier lined up, it’s time to make a sale. You advertise the product using an eBay auction. Since you know what you must pay the dropshipper for the product, you know what the minimum amount you will take for the product. In this case you start your auction at $100 since that is your cost.
If you are confident that you can get more than $100 for the product you can start with a lower price, but remember that if the product goes for less than what it costs you to fill the order, you will lose money. Also remember that the dropshipper will charge shipping, so you should figure that into your sale.
STEP 5: The Product Sells Great news: your CD player sells $135 and your customer pays you with a PayPal instant payment. I highly recommend that if you are selling on eBay you use PayPal or some other online processor to accept instant payments. This
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comallows the customer to pay you immediately, which gets the money in your account immediately, which lets you place the order with the dropshipper immediately. Get the idea?
STEP 6: Place The Order With The Dropshipper After your customer pays you, you should contact the dropshipper immediately to order the product on your customer’s behalf. The dropshipper then ships the order to your customer under your company name and address.
STEP 7: Follow Up After The Sale This is where many new business people drop the ball. Just because your customer has paid you and you’ve placed the order with the dropshipper does not mean that you are out of the loop. Quite the contrary, if there are problems with the order you are the one that will be held responsible in the eyes of your customer.
Be proactive in your customer relations. Follow up with your customer to let them know that the item has been shipped. Offer yourself as the personal contact for any issues that may arise.
This is also a great way to sell that customer more products. Invite them to check out your eBay store or website if you have one.FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.com
My advice is this: if you can’t make at least 40% on the product, find something else to sell.
Can I Make Money Off The Shipping Charges? There is no faster way to turn off potential customers than by padding shipping fees. People are not stupid. They know that it does not cost $30 to ship a six ounce figurine, so do yourself a favor and don’t try this. It will end up costing you more money in lost sales than you would ever make on shipping.
Many sellers take the approach of inflating shipping costs and selling the product for less. This is fine within reason, but grossly over-inflated shipping costs will brand you as a crook in the eyes of the average eBay buyer and they will not buy from you. They think you are trying to rip them off, which in reality, you are.
I recently considered buying an $800 watch on eBay, then saw that the seller was charging $35 shipping. I would have expected a $10 shipping fee, but $35 was way out of line. I really wanted that watch, but not badly enough to pay such exorbitant fees for shipping.
Find out what the dropshipper charges you for shipping and pass that on to your customer. If you feel you should make a dollar for your troubles that’s fine, but don’t double the shipping fees or you will lose sales.
On the flip side, always make sure you’re charging enough for shipping to cover your costs.If you are not using a dropshipper, but shipping the item yourself, always charge enough for shipping and handling to cover your entire cost, not just the cost of postage.
My rule of thumb for shipping has always been to take the actual cost of shipping and add a fair amount to compensate me for my materials, time and trouble. This is the honest way to do it.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.comRemember, it’s called shipping and handling, which means you need to cover your costs of packing materials, shipping costs, insurance, your time and effort, etc.
FREE Gift: Receive a FREE “Auction Secrets Exposed” CD ($47 Value) at: http://www.AuctionSecretsExposed.com
If you’re still unsure about dealing with a wholesaler, or are struggling to find a good drop shipper, there is a readily available source of wholesale products, which you’re already familiar with - eBay. For most of the main eBay categories you can find a sub-category for Wholesale Lots. Here you can find other professional sellers, as well as wholesalers and manufacturers, who are usually offering a number of products in a single lot. You might be able to find the product you want to sell, or other products for your market, buy them as a lot and then sell them on individually to make a profit.
However you find your new supplier, once you’ve found them you need to make sure they are reliable. Whilst you can never be 100% certain until you start working with them, there are a few things you should do with any new wholesaler you are thinking of working with, especially when you are just starting out.
Check your supplier is a registered business - Most, if not all countries will require wholesale suppliers to be registered businesses. They should have a registration number of some sort, or documentation to prove they are a registered business, which you can ask for a copy of. There are usually government or official websites within each country where you can verify business registration numbers (and your supplier) are genuine. Examples of some useful sites for checking businesses in that country are below.
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