| When you put together your business plan, you indicated the type of business that you wanted to conduct. If you planned your eBay business around merchandise that you currently own or create yourself, you can skip this section. But if you planned your business around the resale of new or used merchandise, then you have to find a source for the items you want to sell. Sourcing your inventory is one of the toughest tasks for high-volume eBay sellers. While the average eBay seller typically finds items in their own home or in garage sales, high-volume sellers have to find a constant supply of new merchandise. In essence, high-volume sellers are resellers , as they purchase merchandise from wholesalers or other sources and then resell that merchandise to their customers via eBay auctions. Where can an individual find a source for merchandise to resell on eBay? There are several options, all of which involve buying items in bulk. That means laying down the cash upfront to buy large quantities of items, and then making your money back later, one sale at a time. This is one reason why a budding eBay business needs a source of funding; purchasing your starting inventory can tie up a lot of cash. (Learn more about obtaining funding for your business in Chapter 4, "Step Two: Evaluate Your Funding Needs.") Whatever type of merchandise you choose to resell, you should always make sure you're buying from a reputable supplier. That means passing up those companies that have a Web site but no published phone number, or a post office box but no physical address. Even better, research the business on the Better Business Bureau Web site (www.bbb.org), or check the company's ratings at Dun & Bradstreet Small Business Solutions (sbs.dnb.com) or Hoover's (www.hoovers.com). You can also pick up the phone and give the company a call; you can tell a lot from a simple conversation. tip | | Another strategy is to go directly to the manufacturer for information (and, sometimes, product). The Thomas Register (www.thomasregister.com) is the definitive directory for finding products and companies in the U.S. | Read on to learn about the many different sources of resellable merchandise. Wholesale Distributors The way traditional retailers do business is to purchase merchandise from a wholesale distributor. The distributor purchases their merchandise direct from the manufacturer, who in many cases doesn't deal directly with retailers. The distributor, then, is a middleman who provides a variety of services to the retailer, not the least of which is warehousing the large quantities received from the manufacturer. tip | | Search for trade shows of interest at the Tradeshow Week magazine Web site (www.tradeshowweek.com). | If you want to be an "official" reseller of many types of products, you'll have to deal with the product's authorized distributor. There are thousands of wholesalers out there, most specializing in specific types of merchandise. Most wholesalers are set up to sell in quantity to legitimate retailers, but many also handle smaller orders and smaller buyers , making them ideal for eBay sellers. Many of these distributors operate over the Internet, which makes the process even easier for you. How do you locate a wholesaler? One way is to attend an industry trade show or conference. Most distributors attend or exhibit at these shows; you can also find out about new products and (sometimes) get special tradeshow pricing. You can also contact the manufacturer directly; most will be glad to direct you to the distributor in your region. | | One advantage of dealing with an official wholesaler is that, if you do enough business (and your credit rating is strong enough), you may be able to establish credit terms for your purchases. Instead of paying cash on the barrelhead, you may not have to pay until 15, 30, or even 60 days after you receive your merchandise. Check with your wholesaler to see what terms are offered . | If you live in a major metropolitan area, there may be a trade or merchandising mart where multiple wholesalers may be found. For example, Atlanta's AmericasMart is home to hundreds of specialized distributors, as is Chicago's Merchandise Mart. Check with your local chamber of commerce to see what's available in your area. In addition, you shouldn't be afraid to ask other retailers (online or local) who they buy from. Most merchants are quite helpful, as long as they don't perceive you as a direct competitor. You'll have to conduct your own search for a wholesaler that specializes in the particular type of merchandise you're interested in selling. I'll list a few sites that function as directories or search services of wholesale distributors, but it's hard to beat a targeted Google search ”just make sure you put the words "wholesale" or "distributor" in your query. Wholesale411 Wholesale411 is one of the best search directories for wholesale and closeout merchandise. Wholesalers and liquidators list their merchandise and services on the Wholesale411 site, which then organizes the available merchandise into a variety of product categories, as shown in Figure 8.1. You can also search the site for specific types of merchandise. Figure 8.1. Browse through the categories or search for specific types of wholesalers at Wholesale411. Buylink Another place to find vendors of different products is the Buylink site (www.buylink.com). You have to register as a retailer to search the Buylink marketplace , but then you can search for specific products or vendors . Wholesale Central Wholesale Central (www.wholesalecentral.com) is another leading directory of merchandise wholesalers. You can browse for vendors by category, or search for vendors of specific products. Merchandise Liquidators Liquidators are companies that purchase surplus items from other businesses, in bulk. These items might be closeouts, factory seconds, customer returns, or overstocked items ”products the manufacturer made too many of and wants to get rid of. Liquidators help manufacturers and retailers dispose of this unwanted merchandise to the secondary market. caution | | Just because you can buy bulk merchandise cheap doesn't make it a good deal. Remember, there's probably a reason why an item is being liquidated. It may be last year's model, it may be factory seconds, it may be used or returned, or it may just be something that no one wanted to buy. If it didn't sell well originally, there's no guarantee that it will sell well (at a lower price, of course) in an eBay auction. | Just as liquidators purchase their inventory in bulk, you also buy from them in bulk. That means buying ten or twenty or a hundred units of a particular item. You get a good price for buying in quantity, of course, which is part of the appeal . You also have to manage that large inventory ”and inventory storage can be both a lot of work and somewhat costly, as you learned in Chapter 7, "Step Five: Set Up Your Back Office." When you buy surplus merchandise, check the warranty terms. Unlike the new merchandise you purchase from traditional wholesalers, most liquidators sell their goods "as is." That means if it's bad, you have to eat it ”unless you also sell your goods with no warranty to your eBay customers. Here's a short list of liquidators that can supply you with merchandise for your eBay auctions. Liquidation.com Liquidation.com (www.liquidation.com) is one of the largest and most reputable online liquidation services. The Liquidation.com Web site, shown in Figure 8.2, offers a steady stream of surplus, close-out , and returned merchandise in a variety of categories. Figure 8.2. Buy surplus items in bulk at Liquidation.com. What kind of merchandise are we talking about? How about a lot of 500 Gap jeans , or 120 Panasonic cordless phones, or 1,000 units of The Addams Family TV show on VHS tape, or 4 huge pallets worth of assorted returned consumer electronics items ”just for a start. Pricing is pretty good, if you can take the quantities. For example, those Addams Family tapes went for less than 50 cents apiece at a total lot price of $485. The key here is to pick an item that you know you can move in bulk over a period of weeks or months. Note that Liquidation.com actually serves as a middleman between sellers (the original manufacturer or retailer) and buyers (you). Goods are sold in an online auction format, so you'll find yourself bidding on items just as you would in an eBay auction; all auctions start at $100, with no reserve. You can even pay for your merchandise with PayPal. American Merchandise Liquidation American Merchandise Liquidation (www.amlinc.com) handles closeouts, overstocks, customer returns, and salvaged merchandise in a variety of categories. AmeriSurplus AmeriSurplus (www.amerisurplus.com) sells salvage merchandise by the pallet from their warehouses in South Carolina and New Jersey. Products offered include automotive supplies , groceries, small appliances and electronics, sporting goods, and toys. Bid4Assets Bid4Assets (www.bid4assets.com) is an online auction site offering merchandise obtained from bankruptcies, private companies, and the government. This site offers primarily high-ticket items, including artwork, computer equipment, jewelry , vehicles, and even real estate. The items offered are typically single quantity, not bulk. Luxury Brands Luxury Brands (www.luxurybrandsllc.com) offers higher-end surplus merchandise than you find at other sites. Items include luxury branded European clothing, accessories, and gift items. Even though this is surplus merchandise, you might recognize some of the brands ”including Giorgio Armani, Ralph Lauren Polo, Givenchy, Gucci, and Burberry. The company purchases large mixed parcels of European merchandise, typically end-of- season merchandise, and then imports it for sale in the U.S. You can purchase product in lots of 25, 50, 100, and so on. My Web Wholesaler My Web Wholesaler (www.mywebwholesaler.com) sells box lots, pallets, and truckloads of merchandise obtained from major department store returns, closeouts, overstocks, and liquidations. Categories carried range from As Seen on TV and Automotive to Toys and Watches. OverstockB2B.com OverstockB2B.com (www.overstockb2b.com) offers surplus merchandise from a variety of manufacturers. Merchandise categories include Apparel & Accessories; Bed, Bath & Linens; Computer & Home Office; Electronics & Cameras; Gifts, Gadgets & Toys; Global Designs; Home and Garden D cor; Housewares & Appliances; Jewelry & Watches; Luggage & Business; Movies, Books & Music; and Sports Gear. Salvage Closeouts Salvage Closeouts (www.salvagecloseouts.com) offers liquidated merchandise and department store closeouts in a wide variety of categories, from Apparel and Appliances to Tools and Toys. They also offer a variety of pallet and truckload specials, and have a special eBay Recommendations category. TDW Closeouts TDW Closeouts (www.tdwcloseouts.com) is another distributor of department store returns and closeout merchandise. They offer liquidated, salvage, overstock, and surplus items in a variety of categories, from Apparel to Toys. ndale Sourcing If you're not sure where to find specific types of merchandise, you're in luck. ndale Sourcing (www. andale .com) is a free service that helps you find suppliers of various types of merchandise for resale. It does a good job of matching resellers with suppliers, by keeping a big database of both. When you sign up for ndale Sourcing (it's free, remember), you fill out the sourcing profile shown in Figure 8.3. Select the categories of merchandise in which you're interested, and ndale Sourcing will automatically match you with suppliers who match your criteria. Figure 8.3. Use ndale Sourcing to look for merchandise suppliers by category. You can choose to receive your leads by email or via the Leads Dashboard; you can also opt to put a link in all your eBay item listings to generate sales leads. (The link asks: "Have one to sell?") The Leads Dashboard lists suppliers (companies and individuals) that have goods for sale in the categories you selected. Each listing includes the supplier's location and eBay feedback rating, so you can judge their trustworthiness . Click the supplier's name to display a detailed Sourcing Profile, which includes the supplier's phone number and email address. You can then contact the supplier at your discretion. Other Sources of Merchandise If you're less interested in bulk and more interested in variety, there are other sources available that can supply you with merchandise for your eBay auctions. I'll list some of the more popular ones next . Garage Sales Many eBay sellers got their start by reselling merchandise they picked up at local garage/yard/tag/rummage sale sales. While this can certainly be a source of merchandise, I don't really recommend it for high-volume sellers, for a number of reasons. First, the merchandise you buy isn't limited to a specific category, and it's tough to deal with such a large variety of items. Second, it's not a guaranteed supply; you might stumble across a great deal one week, but then go dry the next. Finally, this source looks to be getting tapped, as more people choose to sell their old stuff on eBay rather than putting it out in their front yards. Take a gander, but don't be disappointed if it doesn't pan out. Flea Markets Flea markets offer similar merchandise to what you find in garage sales, although you can sometimes find surplus items in bulk. If you keep your eyes peeled, you might find the occasional bargain that can supply your eBay auctions for an extended period of time. Estate Sales/Auctions Not to be insensitive, but dead people provide some of the best deals you can find. It's the equivalent of raiding somebody else's garage or attic for old stuff to sell. Check out the weekly estate sales and auctions in your area, be prepared to buy in quantity, and see what turns up. Traditional Auctions Real-world auctions (not the eBay kind) remain a good source of inventory for many eBay sellers. Many auctions feature large lots or bulk quantities, which are perfect for ongoing eBay sales. Make sure you inspect the merchandise before the auction, and don't get caught in a bidding frenzy; set your maximum price beforehand, and don't exceed it. The IAL Auction Calendar keeps a list of ongoing auction events by date and location; check out the Web site at www.internetauctionlist.com. Vintage and Used Retailers You can often pick up some decent collectible merchandise at your local "vintage" or used merchandise retailer ”although you may have to haggle a little to get down to a decent price. The big drawback is that you're typically buying onesies and twosies; this isn't a good source for large lots. Thrift Stores Think Goodwill, Salvation Army, and similar stores here. You can typically find some decent merchandise at low cost ”and help out a nonprofit organization, to boot. This approach has the same drawback as buying from a vintage retailer, however; large lots are rare. Dollar Stores These "big lot" retailers are surprisingly good sources of eBay-ready merchandise. Most of these retailers carry overruns and closeouts at attractive prices. You can often pick up items here quite cheap ”and enough of them to feed your auction activity for awhile. Some of the larger dollar-store chains include 99 Only (www.99only.com) and Big Lots (www.biglots.com). Warehouse Clubs You'd be surprised what deals you can find at your local Sam's Club (www.samsclub.com) or Costco (www.costco.com). Buy something cheap enough here, and it's not to hard to resell it at a decent markup on eBay. Just remember that the clubs' product mix is continually changing, so you'll need to visit often to find the latest deals. Closeout Sales You don't have to shop at a cheap retailer to find a good deal. Many mainline merchants offer terrific deals at the end of a season or when it's time to get in next year's merchandise. If you can get enough good stuff at a closeout price, you have a good starting inventory for your eBay sales. Going Out of Business Sales Even better, look for a merchant flying the white flag of surrender. When a retailer is going out of business and says "everything must go," that means that bargains are yours to be had ”and don't be afraid to make a lower-priced deal, if you can. eBay This leads us to the final place to look for items to sell on eBay ”eBay itself! Yes, it's possible to make money buying something on eBay and then turning around and selling it to someone else on eBay at a later date. The key is timing. Remember, you have to buy low and sell high, which means getting in at the start of a trend. It's possible ”although it takes a lot of hard work, and not a little skill. One way to find goods for resale is to use eBay's search feature. Make sure you include the words "case," "closeout," "lot," or "surplus" in your query. Another option is to go directly to eBay's Wholesale Lots category (pages.ebay.com/catindex/catwholesale.html). As you can see in Figure 8.4, this page lists eBay auctions of surplus merchandise in almost all of eBay's major categories. Just click through to bid on merchandise ideally suited for resale. Figure 8.4. Sourcing surplus merchandise on eBay's Wholesale Lots page. |