Hi Chris,
I understand what you mean regarding profit margins.. It is not worth your time to sell something and pack it, if you are not going to make some real money in the process..
The good news is there are some solid ways to get product for very low prices.. It took me a few years to really catch onto it.
Basically, my rule is to never buy anything for resale, unless I can double or almost double what I paid.. So, if it will sell for $220 on eBay, I don't want to spend any more than $120 in obtaining the product.
One easier way to obtain product like this, especially in the electronics and sports product area, is salvage/overstock/returns..
Essentially, you would be buying items that are either closeout, overstock or returns from chain store companies, such as Walmart, Sears, JC Penny, Best Buy, etc.
Generally, you can obtain such product for about 30% of the original wholesale price, or about 1/4 or retail. And, generally, they sell for about 40% to 95% of wholesale price on eBay.. Usually, they tend to fall into the 62% on average range of wholesale as final selling prices on eBay.. I know this from doing a lot of analysis and sales on eBay..
The electronics or sports items would be items you would see in your local chain store.. So, you would be buying a variety of name brand items on one pallet that were stocked in say McSporting Goods or Circuit City.. The good news is they are "name brand" and also "quality sellers". Stores such as Circuit City do not waste floor space on non-sellers.
You can bank on this type of product, if you understand the "beast". Basically, the product looses value over time.. That is why they only sell for 62% of retail/wholesale on average, besides the fact that ebay is known for being a cheap place.
Generally speaking, if an item is 2 years or less old, it will sell for 62% or wholesale.. If it is 4 to 6 years old (really old closeout items sitting for eons in a warehouse), it will sell for about 1/4 or retail/wholesale.
If the company is constantly selling off their pallets, you do not need to worry about it being more than 2 years old.. Most of what I buy falls into this category, although I did get one load that was older once, but paid a lower price also..
Here is are two companies, for instance, that sell salvage:
They are both solid companies. American Merchandise Liquidators, I think, sells older items then Genco does.. Genco, I have used on several occassions..
Basically, here is an example of what you could get on a pallet.. Remember, it could be pretty wide variety:
Lets say you get 6 PS2's on one pallet..
They are likely slimline, from my experence with them..
Wholesale price is: $120
You pay about 30%, depending on your winning auction bid, so $40.
You can sell on eBay for $100 to $115
So, more than double what you paid..
There is another factor.. About 85% of what you get is good, while 15% is not sellable, generally speaking..
So, that is just:
$40/0.85 = $47.06 effective cost per PS2..
Of course, you have eBay fees when you sell.. Likely would add up to about $12 counting every ounce of Paypal and eBay fees..
So, $47 + $12 = $59..
You sell for $110, and make an extra $5 bucks on shipping costs(you charge $5 extra on shipping costs).. $115
$115 - $59 = $56 profit..
So, that is sort of a breakdown..
THE BASICS IN OBTAINING PRODUCT (the above was just one of three of the main ways shown below):
Below, I will list a few of the main ways to obtain product, in general:
1. Salvage / Surplus / Overstock / Returns
2. Import
3. Buy on eBay, then Sell on eBay.
I don't recommend dropshipping or affiliate marketing, as I have done a bit of both and found them not profitable.. Simply put, everyone wants to do this when they first get into selling. I say this broad statement, because so far, out of about 27 people who have signed up for my coaching, about 20 of them said they wanted to "dropship".
The problem is dropshipping is more of a trick than a profitmaker. Basically, the companies who offer this type of selling are not interested in real sellers looking for real profit. Rather, they are looking for inexperienced sellers who will be duped into selling their products. I say this, because when I did a lot of research in the area of dropshipping and tried it myself, I found that their claims of "low prices" were false. I also found that the one I did use was only reliable about 50% of the time. I would sell a product and half the time, they would say it was not in stock.
So, though it appears to be easy, dropshipping ends up being as difficult or more difficult of a way to make money.
BUY THEN SELL ON EBAY:
Wholesale Lots~
Simply go to any main category on
www.ebay.com, such as "DVDs" and then find the subcategory "Wholesale Lots". In there, you will find product in lots of 50, 100, you name it..
The trick is to not bid on the glamorous auctions at the top of the page, but the auction on the bottom that no one clicks on. Often, those are the real deals, where you can turn around and make a real profit selling each item individually..
Believe it or not, there are items ending all the time that are low priced.. This works well and can be a very profitable way to do business on eBay.
SALVAGE / OVERSTOCK / RETURNS:
This is probably the best way to make REAL money on eBay. From what I have done with this and from what I can tell, most of those making solid income on eBay are buying their product in this manner..
Basically, you can buy returns, overstocks, etc from chain stores like Sears, Walmart, Best Buy, etc.
http://www.surplus.net is a pretty good source for companies that offer such product..
For instance, this is a solid company that offers such product:
http://www.amlinc.com/ Just look at the above links and do some searching and I think you will see what I mean..
You basically buy it for about 30 to 50 % of wholesale and can turn around and sell it for double on eBay.. The best is to buy "manifested" pallets of such product.. Manifested means it tells you what is actually on the pallet.. You can take that and do searches on eBay to see what it sells for..
IMPORTING:
I have done this several times.. Generally, you spend about $5000 or so at a time and you can buy product from China.. This is also a very large way to make REAL profit on eBay and many of the larger companies end up going this route.. So, a lot of the bigger companies on eBay do this, but it does have more risk and requires more preparation than the Salvage method..
Here is a great website for finding companies that sell this product:
http://www.alibaba.com Please write back with your ideas and I we can talk more.
Sincerely
Tony
Chris Hocquard <eagleproperties@comcast.net> wrote:
Tony,
First of all I appreciate that you are taking the time to help me become
successful on EBay. Second, I would like to start right away. The main
reason I have been taking a look and dabbling in EBay is to make extra money
and to find something that I enjoy doing. I have a score of 35 on my
feedback and obviously would like to do a whole lot more then this. I'm a
full time Real Estate Agent with RE/MAX and would definitely like something
to replace that income especially in times when houses are not moving or
replace it all together.
The number one most interesting thing to me is Sports, Electronics and Real
Estate. The most frustrating things I have found with EBay are that I
really do not like packing products and shipping them out, when I'm hardly
making anything off of them. I almost feel like it's a waist of time. I
need to learn to find better buys so that I can either drop ship or buy and
then ship where I can make much better margins. I have lost some money buy
not knowing how to ship and calculate the proper weight and cost of a
package.
I live in Grand Ledge, Michigan and will follow your program. I'm a
Christian man and rely heavily on good ethics and morals. Please lets start
this program right away so that I can start to enjoy EBay much more and make
a little money without having to package everything myself. Thanks for your
time and God bless. My EBay ID is cjh040897
Chris Hocquard, Realtor/Investor
RE/MAX Real Estate Professionals, Inc.
6607 W. St. Joseph Hwy.
Lansing, MI 48917
(517) 321-8255 Ext. 150
