When you are first starting out in the auction business, dealing with the world of wholesalers can be somewhat confusing and overwhelming. New Zealand's online auction expert Simon Slade from the SaleHoo directory shares some lesser-known facts about the wholesale buisness with Top Auction News readers:

1. Wholesalers usually don't advertise their best prices out in the open.



"It's nowhere near as simple as a Google search," says Slade. "Wholesalers are going to want you to sign up with them, first, before they show you their prices. That way, they know you are a serious buyer and are less likely to waste their time. After you have signed up for your own account, you'll get assigned a sales rep and then you can start bargaining."




2. You shouldn't have to pay fees to order from a wholesaler.



"So, yes, you'll probably have to sign up and fill out a few forms," says Slade, "but you should never need to pay any kind of fee to get established with a wholesaler. If they request a joining fee, then it's probably not really a wholesaler - it's probably some intermediary posing as a wholesaler. Someone who is charging a fee in order to make a quick buck."



But there are occasional exceptions with drop shippers; sometimes drop shippers will charge a small fee to set up the account. But wholesalers usually don't!




3. eBay is prices are typically about the same as wholesale - or even lower.



One of the things that suprises new sellers is how low the prices on eBay can go. They frequently go into business thinking that wholesale is around 75% lower than wholesale prices, but they are surprised to find that eBay rates are pretty much exactly the same. In some situations, they are even lower than wholesale. Therefore, if a wholesaler's price is competitive with eBay that doesn't mean the wholesaler is expensive - that's just how things are. In this case, you should look for liquidation deals... or find a different product to sell on eBay.



4. Wholesalers lose money when they sell to you in small lots.



The money to be made in the wholesale business is from volume sales. That's why real wholesalers are notoriously reluctant to fill smaller orders from novice eBay sellers. If you're going to be ordering a small number of units at a time to test out a new item, it might be better to go with a drop shipper.



5. Drop shipping is a significant risk for the wholesaler.



Drop shipping means that it's the wholesaler's responsibility to stock and carry all the inventory - and they have to take a risk. "That's why drop shipping is a bit more expensive than buying in bulk. IT's important to understand this to set a realistic profit margin goals,” Slade says. "Drop shipping is a great way to get started. You can start selling online without investing in large amounts of inventory and keeping it yourself. But with the reduced risk comes a reduced prospect for reward."

Labels: wholesale dropshipping

Product sourcing is one of the most important topics for eBay entrepreneurs, along with customer service. The basic idea, of course is to buy low, sell high. Most people start on eBay by selling whatever they have in their attic or basement. This is a great way to begin, because they will get used to selling on eBay and they will become familiarizes them with the shipping and customer service.

After a while though, they've sold off everything they have in the attic, and need to find more items to sell. So they begin going to every garage sale and flea market they can to find more products to sell. They quickly find that they are spending a lot of time (and money) doing this and begin looking at new ways to find new items to sell. This means finding products from wholesale suppliers.

One of the most common mistakes people make is to go to a search engine and search for wholesale suppliers online. Unfortunately, search engines are NOT a good way to find legitimate wholesaler suppliers. Real wholesalers will most likely not be going to be found via a search engine. What they will find is that 99% of the time the if you found a wholesaler supplier though a search engine, it will be a scam artist.

They set themselves up with a real wholesale supplier and then promote themselves as a supplier. They raise the prices of the goods and simply pass on any orders they get to the real wholesaler. The prices are so high that is will be impossible to make any money with them. Some, if not most, will charge a monthly fee to use their service and they will tell you that you do not need a reseller's license to set up an account with them.

A real wholesaler will require that you provide proof that you are a legitimate business. This generally includes a business license and a sales tax permit. The actual name of the needed documents vary by state. These documents are absolutely vital in order to deal with real wholesalers. Don't let this detail scare you! These are really not that hard to get and unless you incorporate, will not require a lawyer. These can be obtained at your county courthouse and they will guide you in any other documents you need.

To summarize, a real wholesaler will:

1. Not be found on the internet with a search engine.
2. Require some form of proof that you are a real business.
3. Will not charge a set-up fee or a monthly access fee.

If you find a wholesaler that does not fit these criteria, then you may have found a scam artist posing as a wholesaler.

Labels: ebay auction strategies, ebay selling, product sourcing, wholesale dropshipping

by Lynn Terry

If you have never sold products on eBay before, I would suggest that you start with your own household items that you are ready to part with. You probably have things in storage, items in the back of your closet, or things you don’t use anymore. You can generally get a lot more for them on eBay than you can by having a yard sale.

Once you get your feet wet with the selling process, and exhaust your personal resources, you can look to local auctions for more products to sell on eBay. Many local auctions specialize in property, personal estates, antiques, Nascar and other collectibles.

Sometimes you can even find large lots of inventory or product types, and purchase the entire lot for a discount or wholesale price. You can then sell the products individually through online auction, and flip your investment into a nice little profit.

How do you choose which products to buy, and how much should you bid?

The goal is to buy low and turn a nice profit. What I have done in the past, and would highly recommend, is that you team up with your spouse or with a friend. One stays at the computer while the other attends the local auctions, and you stay connected by cell phone. You want to keep your method under your hat by the way, so step outside to make the calls or be as inconspicuous about text messaging as you possibly can.

When you find a product that you are interested in, or that you think may do well on eBay, make a note of the model number or any specific product information. Pass this on to your "invisible partner" so that they can research the product for you.

They can look up the product to see how well it has sold on eBay in the past, and the price range that it usually brings as a high bid. This helps you to bid more accurately at the auction, instead of guessing at how well it will do online and bidding in the dark.

Your partner will need to be quick on the keyboard and familiar with eBay. You need to know how many auctions are currently running for that item, and whether the market is already flooded with sellers. They can also search the Completed Auctions to see what the high bids were when the most recent auctions ended. After a few trial runs, you can get your teamwork down to an art.

Without this Invisible Partner you may bid too high for an item that brings a lower price on eBay, or that doesn’t sell well online. Unless you know your product, and know your market (super well), it pays to have someone checking on things behind the scenes.

You can usually find out about Local Auctions by checking the newspapers. There is also a great site called http://AuctionZip.com where you can find live auctions in your area as well. All you have to do is put in your zip code, tell it how far you are willing to travel (within 30 miles, for example) and it will give you a calendar of auctions in your area.

A quick search at AuctionZip tells me that there are 9 local Auctions going on in my area this weekend (and I live in a very small town). Some of them are for properties, others are entire personal estates (ie estate auctions), and some of them specialize in antiques & collectibles.

When you tap into these resources and get a system down for buying smart, you can flip products from one auction to another for an easy profit!


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Labels: auction, drop shipping, ebay, online auctions, selling on ebay, wholesale dropshipping