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| Ebay, Finding Products to Sell |
| 07.16.04 (5:52 am) [edit] |
Finding good sources for items to sell on Ebay can be a real battle. Aside from the obvious (things you have around the house, flea markets, yard sells, etc.) Where else can you look. I get my items from two sources.
1. I use several drop shipping companies.
2. I buy wholesale and sell at auction.
I make money using both, I make more with the wholesale because the profit margins are better. The down side is that I need cash upfront and have to worry about shipping time and expense.
My solution has been to use both sources. I sell using a few select drop shippers that I have been using for several years.
I do the same with a couple of wholesalers. My expense is low because I am not spending all of my cash on products. I make a fair profit from the small amount of wholesale I do buy. The remainder of my profit is from drop ship products. Do, by diversifying my sources, I do quite well.
One good starting place for finding wholesale sources is Wholesale 411. Lots of vendors.
I use Chris Malta's "Drop Ship Source Directory" in addition to the searches I do on my own.
Remember, finding good sources is only a small part of the process. Selling at auctions is really an exercise in marketing.
If you do your homework and market the product effectively, then your chance for being successful are great.
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| Using Drop Shipping to Sell at Auctions |
| 07.13.04 (3:47 pm) [edit] |
What is Drop Shipping? Quite simply, it's a marketing method that requires you to stock no inventory, maintain no storefront, have no warehouse and still operate a successful money making business.
Sounds great, make lots of money and don't have to deal with a large overhead.
Well, that's the simple explanation. The complete explanation is much more involved.
What is a "Real Drop Shipper" and how do I know that the company I am doing business with is the "source" and not one of several "middlemen" adding to my costs?
Why is a company trying to charge me a fee just to buy from them?
Get the picture? The last two questions are just the tip of a large iceberg of information you need to be successful with drop shipping.
Lets start with the basics; Acme Company makes widgets and has for fifty years. Their widgets are the best on the market and is the leading widget in customer satisfaction.
But guess what, Acme Company won’t sell to the public, all of their resources go into the manufacturing process so they don’t have the time to establish stores. So, they need someone to take their widgets and get them into the stores.
Well, along comes Gimp Distributors who make purchases of 5000 widgets at a time for $5000. Now Gimp Distributors also won’t sell to the public, they supply a chain of stores called widgets-are-us. Gimp Distributors pays $1 per widget in lots of 5000 each. They provide them to widgets-are-us for $2.50 each.
Now, it only costs $.50 for Acme Company to make the widget. They sell it to Gimp Distributors and make a $.50 profit from each widget. Gimp distributors sells the widgets to widgets are us for $2.50. Gimp Distributors makes $1.50 per widget.
Widgets-are-us sells widgets (like hotcakes) for $5.00 each making $2.50 per widget.
So here’s the process
Acme CompanyGimpDistributorsWidgets-are-usconsumer
Widgets-are-us is the retailer for widgets. You as the retailer wanting to sell using drop shipping would use the following model.
You establish a selling venue (auction, online store, catalog, mail order or any selling situation).
The customer comes to your selling venue, like’s the product you offer and makes a purchase
You take the order, collect the money and then place the order with your drop shipper
The drop shipper sends the item to the customer and everyone is happy. The customer got his product, you bought the product from the drop shipper for less then the customer paid and the drop shipper made profit because he buys in bulk and the cost to him is much less then your cost.
What a great system. It works well as long as you have done your marketing homework, understand drop ship scams, have the ability to find good drop shippers, do the research, have a good sells venue and understand customer satisfaction.
It can be complicated but if you educate yourself this can be a real income producer. I will address the issues in later blogs.
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