Section 7.1. What Should I Sell?

7.1. What Should I Sell?

In taking the next step with an eBay business, the big question on every seller's mind is "What should I sell?" This big question is really two smaller questions:

  • Which products offer a good sell-through rate and a good profit?

  • Where can I get my hands on these items?

Note: A sell-through rate is the percentage of your auctions that end in sales.

New sellers often post to online forums, asking more experienced sellers for the secret of success: what do they sell and where do they get it? If you think about it for a couple of seconds, you can see that this method of market research won't get you very far. Why would your future competitors want to give free information to someone whose goal is to cut in on their business? It ain't gonna happen. Fortunately, this section helps you answer those questions.

7.1.1. Research the Market

To find what sellsand what doesn'tspend some time doing research. If you've sold a number of items already, you'll have a sense of which ones attracted attention and which ones didn't. Use eBay's hot list (Section 6.3) to look for categories with lots of action. Keep checking the list over several months to look for patterns. When you've identified a hot category that interests you, spend some time searching completed auctions in that category.

Are iPods generating lots of bids while other MP3 players languish? Does it look like a category is getting overcrowdedsupply going up to the extent that demand starts tapering offso that the category could go from hot to freezing cold in a couple of months? Does the item sell better at a specific time of the year (think snow tires and swimsuits) or when auctions end on a certain day of the week? Whatever you want to sell, taking the time to familiarize yourself with the market and analyze its trends will position you to use that market to your advantage.

Note: Third-party research tools (Section 9.2) can help you get serious about selling.

7.1.2. Finding Merchandise

Merchandise is everywhere. With a little creative thinking and an awareness of what sells, you can find stuff to sell as far away as the other side of the globe or as close as next door.

Note: Besides the sources offered here, you can find things to sell by offering to sell for others on consignment (Section 7.5.1).
7.1.2.1 Secondhand trash and treasures

Anyone who's ever shopped at a tag sale, flea market, or thrift shop has harbored hopes of finding an unrecognized treasure among all the junk. It can take some searching, but consider the following venues as places to find stuff to resell on eBay:

  • Tag sales . People who have tag sales (also called yard sales or garage sales) just want to get rid of the things they don't use or don't need and make a little money in the process (maybe they're too lazy to sell their castoffs on eBay). So you often can find underpriced items being sold by people who don't know what they could get for them. In addition, it's almost a tradition at tag sales to try a little haggling; don't hesitate to make an offer or see if you can get two items for the price of one. Be sure to show up early to get first dibs on the best stuff.

  • Thrift shops . Stores run by charity groups such as Goodwill, the Salvation Army, and local churches offer good deals to the discerning shopper. You might have to hunt a bit to find the really good buys. And keep in mind that used clothing, a staple of these shops, usually sells for thrift-store prices on eBay, so be careful not to buy up a pile of used clothing that you can't make money on.

    Warning: Use caution when buying designer items from thrift shops. You don't know where those goods came from, and they're often counterfeit.
  • Flea markets and antique shops . Either of these can be a terrific source for collectibles and one-of-a-kind itemsif you know what you're looking for. Most flea market and antique dealers know their stuff, so expect to do a little hunting for bargains.

  • Estate sales and local auctions . An estate sale is designed to sell off property from the estate of someone who has passed away; estate sales may be held as auctions. Local auctions can be a great place to pick up deals; you'll probably be bidding against other eBayers there. Don't forget that there's usually a commission on top of the price you bid. Arrive early to snap up the best buys; as the auction proceeds, people who haven't bid yet start to feel pressure to participate, so later lots often generate more bidding and higher final prices.

  • Dump & Run . If you live near a college or university, watch for a Dump & Run sale. Students who are cleaning out their dorm rooms at the end of the school year throw out an amazing amount of stuff, from furniture and kitchenware to books to linens and clothingsome of it brand new. One student, Lisa Heller, was amazed at the waste and started Dump & Run as a way to keep perfectly good items out of landfills and raise money for nonprofit organizations at the same time. Before they head home for the summer, students deposit unwanted items in Dump & Run boxes, rather than the trash. Volunteers sort through the items and hold a massive tag sale, usually in the fall at the start of a new school year. Prices can be unbelievably low. To find a sale near you, go to www.dumpandrun.org and click Upcoming Sales.

Tip: Don't forget about government auctions. Government agencies frequently sell off surplus or confiscated goods. Two good sources of information about these auctions are Government Liquidation (www.govliquidation.com) and Bid4Assets (www.bid4assets.com). On the Bid4Assets home page, look on the left-hand menu under Specialty Auctions to find sales of tax-defaulted property, government surplus , and goods seized by U. S. Marshals.
7.1.2.2 Wholesalers and liquidators

Wholesalers are middlemen; they buy merchandise directly from a manufacturer and sell it to retailers. Wholesalers usually sell in bulk and don't want to deal with the general public (in other words, the average eBay seller). So if you want to buy wholesale, it's a good idea to have a state sales tax number or reseller certificate (Section 7.2.5). Visit your state's Web site (go to www.google.com, search for the name of your state, and scan the results list for the official home page) to learn how to obtain a tax number.

You can find many, many wholesale directories online. One that was set up especially for eBayers is www.wholesaleforebay.com. Other popular directories are www.wholesalecentral.com, www.wholesale411.com, and www. vendio .com (click Seller Resources).

Tip: If you're a member of a wholesale club, like Sam's Club, BJ's Wholesale Club, or Costco, you can find items on sale at the club and resell them on eBay.

Liquidators buy surplus merchandise in bulk and then resell it. The merchandise liquidators offer could be store returns, factory seconds, closeouts, or overstocked items. If you buy from a liquidator, you'll be buying in bulk; some sell by the pallet, others by the truckload. Make sure you have room to store all that merchandise. You should also ask why a liquidator is necessary in the first place. If a store couldn't sell that truckload of toasters, are you sure you'll be able to?

If you're interested in buying from liquidators, consider subscribing to Closeout News (surf to www.thecloseoutnews.com), shown in Figure 7-1. Each month, more than 4, 000 companies advertise their closeouts, overstock, and discontinued items in this publication.

A popular liquidation Web site is Liquidation.com (www.liquidation.com). This is an auction site where you bid for lots of items, ranging from clothing to computers and accessories to jewelry to power tools. Salvage Closeouts (www.salvagecloseouts.com) sells items for a fixed price and has an eBay department to help and advise eBay sellers. (On the left-hand menu, click eBay Recommendations.) Overstock.com, whose auction site is one of eBay's main competitors, also offers fixed-price items in bulk through its Club O Gold program, which offers deeper discounts on Overstock's prices and cheaper shipping for an annual fee. Go to www.overstock.com and click Join Club O Gold to sign up.

Here are some other liquidators' Web sites:

  • Closeout Central (www.closeoutcentral.com)

  • TDW Closeouts (www.tdwcloseouts.com)

  • Merchandise U. S. A. (www.merchandiseusa.com)

  • GB Retail Exchange (www.retailexchange.com)

  • American Merchandise Liquidators (www.amlinc.com)

  • AAA Closeouts Network (www.aaacloseoutsnetwork.com)

Tip: You can also shop right on eBay for wholesale items you can turn around and sell yourself. Click Buy "See all categories," find a category that interests you, and check out its Wholesale Lots subcategory .

Figure 7-1. To subscribe to Closeout News, point your Web browser to www.thecloseoutnews.com and then click the Subscriptions link. You can also post free "I Want" ads on the Closeout News Web site, telling suppliers what you're looking for. To post an ad, click the I Want Ads link, and then scroll to the bottom of the page to fill out the form.


7.1.2.3 Drop shippers

Drop shippers are wholesale companies that ship an item directly to the buyer after your auction. You choose a satellite radio from the drop-shippers catalog or Web site and list it on eBay. Someone buys the radio and pays you for it. Then you notify the drop shipper to ship the radio to the buyer. If you're short on space, this can be an ideal arrangement; you can sell merchandise without cluttering up your house (and your garage and your basement ) with inventory.

But if the good thing about drop shippers is that the merchandise you sell never has to pass through your hands, it's also the potentially bad thing. It's your reputation on the line with each auction. If the drop shipper drops the ball (instead of your shipment), you're the one who'll receive disputes, complaints, and negative feedbackand the buyer has every right to be mad at you if the item you sold is out of stock or simply doesn't arrive.

Tip: To find out whether a drop shipper is reliable, do a trial run. Try ordering an item or two yourself (you can always resell them on eBay). Then notice how long it takes for the order to arrive, and whether the item is in good shape and well packed. If the shipment doesn't live up to your own standards as a buyer, keep looking.

One way to check out a particular drop shipper before you start using their service is to find other sellers on eBay who use the same drop shipper. This isn't as tricky as it might seem: just search for items you know the drop shipper sells (from the eBay home page, type the name of an item in the Start New Search text box and then click Search). Most sellers who use drop shippers use the shipper's photo and description of an item, so if you find a bunch of very similar auctions run by different eBay sellers, you've probably found your drop shipper. Check out the feedback these sellers have accrued. If you find lots of recent complaints about shipping speed, canceled orders, or the quality of the merchandise, you need to find a better drop shipper.

Beware the lists and directories of drop shippers available on eBay and across the Internet. The people who offer those are making money from selling a list, not from drop shipping. By the time you get your hands on the list (the same list that dozens of others are buying), it's likely to be full of useless, out-of-date information. Also, some of the names on the list probably aren't even legitimate drop shippers; there are plenty of middlemen out there who pretend to be drop shippers but in fact do nothing more than forward your orders to a real, live drop shippertaking an unnecessary bite out of your profits.

Tip: Avoid drop shippers who charge a "setup" fee. Drop shippers typically charge $2 to $4 per shipment for handling; setup fees or other surcharges are a sign that you're probably not dealing with a legitimate drop shipper.

There's only one drop shipping directory published by a certified eBay provider. Worldwide Brands (www.worldwidebrands.com), shown in Figure 7-2, employs a staff of full-time researchers who have created a list of drop shippers (and who update it daily). There's a one-time fee to gain access to the list, but Worldwide Brands guarantees that each drop shipper on its list has its own warehouse, has manufacturer authorization to sell the products, and will ship single items. If you discover otherwise , Worldwide Brands will refund the money you paid to use their list.

Figure 7-2. Worldwide Brands offers information about drop shippers and wholesale suppliers. From the left-side menu, you can also download a free eBook on starting an Internet business, try out a market-analysis research tool, and subscribe to a weekly newsletter for entrepreneurs running an e-business from home.


It might take some time to find a good drop shipper, and you should be aware that hundreds of other eBayers are also out there looking for a good drop shipper who ships the very same items you want to sell. It's hard to gain a competitive edge when other sellers are getting the same deal you are.

Tip: When working with a drop shipper, do frequent checks of the shipper's inventory. Sometimes someone will come along and buy up all the remaining stock of an itemand you don't want to be running an auction for any item the drop shipper no longer has.

eBay's policy on drop shipping falls under what it calls "pre-sale listings." eBay defines a pre-sale as the sale of any item that you don't physically possess at the time you post the listing. Pre-sale listings must mention that you don't have the item in hand and must guarantee delivery within 30 days of the auction's end. If you want to accept PayPal for a pre-sale, things get a little more complicated. PayPal allows pre-sales "on a limited basis," but you must guarantee shipment within 20 days. And if you want to use PayPal's Seller Protection Policy (Section 5.4.7), you have to ship within a week of the auction's end. Slow drop shippers will trip you up here.

Note: If shipping takes more than seven days, PayPal doesn't allow drop shippers for sales of computers or routers.
7.1.2.4 Manufacturers

Sometimes you can buy merchandise directly from the manufacturer, getting rid of the need to go through a wholesaler or a drop shipper. When you've decided what kind of product you want to sell, contact some manufacturers directly (use a search engine like www.google.com to find the company's Web page and contact information) and ask whether they'll sell you items to resell. If the manufacturer agrees, you can save significant money over wholesale prices.

Another way to find manufacturers is through Andale Suppliers (www. andale .com), a free service shown in Figure 7-3.

Figure 7-3. To find suppliers through Andale, go to www.andale.com and then click Research Tools. If you haven't registered with Andale, register now. (To do so, click the Register button at the top of the Andale home page; then, on the page that appears, scroll down to the bottom and click Continue With Registration). After you've registered, use the Andale Quicklinks menu at the top of the page to select Suppliers by clicking the Search button. You can search for whatever items you want to acquire by manufacturer, wholesaler, or one-time sale.


Attending trade shows also gives you access to manufacturers. A trade show is a convention where manufacturers' sales reps exhibit their goods. Trade shows cover a particular section of the market, such as electronics, toys, books, gift items, and so on. Know what you want to sell before you go to make the trip worth your time. Also, some shows feature wholesalers and distributors , who may be more open to dealing with small resellers than some large manufacturers.

Tip: Trade-show producer VNU Expositions maintains a list of upcoming trade shows at www.merchandisegroup.com. At their Web site, you can also sign up for MarketWatch, a free e-newsletter for buyers and sellers of novelty and gift merchandise.


eBay[c] The Missing Manual
eBay[c] The Missing Manual
ISBN: 596006446
EAN: N/A
Year: 2006
Pages: 100

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