Creating a Working Business Model on eBay – eBay Product Sources

The vast majority of eBay sellers have dysfunctional business models. 


That is right: many people are simply selling junk to get rid of it – and many store owners are simply liquidating outdated merchandise. If you emulate the business practices of people who:


a) Have no interest in earning a profit or


b) Simply getting rid of junk they no longer need, you will never earn a profit yourself.


Selling off your last year’s clothing and other stuffs you don’t want around the house is great if you are not aiming to make real money selling on eBay. 


However, our aim here is to start a successful eBay business, and in order to be successful, you must have a good working model.

This is exactly why it is important to look at working eBay business models that actually have the potential to generate revenue, find sellers who are using these exact models, and then do your best to learn from those sellers, which means copying their techniques wherever possible. Lucky for you, we have done all the research.

 

STOCKING UP PHYSICAL PRODUCT INVENTORY


Let's start with working business models for physical product inventories.


In order to compete successfully with a straight-forward, simple business model on eBay, you have to have excellent prices, an excellent layout, a ‘unique selling proposition,’ and a lots of traffic. 


eBay has tones of traffic, so that is one great point as you do not need to sought for traffic by yourself. 


However, eBay is a highly competitive marketplace, which means you have to find some way to buy your inventory for prices that are considerably lower than those offered in retail stores. 


If you remember, the key to making money on eBay is to sell in mass volume. 


We all know the profit margin of selling on eBay is extremely low, so you have to target mass volume.


Now comes the crunch, how do you aggregate mass inventory for your eBay business, especially when you are just starting up? 


For a good eBay Business Model, this one question will either make, or break your eBay business.


THE EIGHT EBAY STRATEGIES


There are Eight major ways in which you can stock up on mass inventory for your eBay store. 


You can buy your products on Internet auction sites, from a dropshipper, from an auction hall, from a flea market, from a classified ad, from a wholesaler, from a liquidation sale, or from a government repossession sale. 


All of these are avenues through which you can purchase products below retail prices.


In the next section, we will go into detailed on these eight strategies and formulate a working business model on eBay.


 We will look into the Eight main sources of products which you can get in massive (and cheap!) amounts for your eBay business.


Strategy 1: eBay Inventory From Internet Auction Sites


If you remember from the last section, there are Eight major ways in which you can stock up on mass inventory for your eBay store. 


You can buy your products on Internet auction sites, from a dropshipper, from an auction hall, from a flea market, from a classified ad, from a wholesaler, from a liquidation sale, or from a government repossession sale. 


All of these are avenues through which you can purchase products below retail prices. From here you can formulate a good, working business model on eBay.


Let's start with Internet-based auction sites. You will want to consider Overstock, Yahoo, Bidz, Ubid, and even eBay. 


Look specifically for sellers or shops on these auction sites that under-optimize and use ‘no reserve’ listings. 


You will want to keep those store owners on your “watch list,” which will notify you whenever they put out a new auction.

 

You can also go to liquidation.com where large companies are auctioning off large amount of inventory at prices way below what you can sell off on eBay!


SNIPING


One excellent method you can use in conjunction with this type of inventory building is sniping. 


Sniping auctions simply means using an automated system to make pre-set bid amounts at the end of the auction, rather than earlier. 


Not only will this allow you to fly under the radar and purchase items for lower prices, but it will also prevent you from making emotional decisions when you buy. 


Instead, you can pre-set your spending according to a reasonable estimation of the ideal cost at which you should buy.

You can setup a 14-day trial account at the following URL to try the ‘sniping’ method: www.esnipe.com.


Additionally, if you want an excellent tool you can use to track all items in your specific inventory theme currently on auction, as well as new auctions being released within your theme, you can use the tool at the following address for free: http://www.baymonitor.com


In addition to looking for under-optimized, “no reserve” listings, you will also want to look for misspelled, “no reserve” listings. You can use the tool at the following URL to find misspelled auctions within your given theme/niche: http://www.spotdealz.com/spelling.php.


THE KEY TO MAKING THIS ALL WORK IS TO WEAVE TOGETHER A REGULAR, PREDICTABLE SYSTEM FOR


a) Finding items and sources that line up with your theme and price structure;


b) Tracking those items;


c) Purchasing those items when they fit your pricing requirements; and


d) Listing and re-packaging those items as quickly as possible.


Now that we have covered Internet-based auction inventory creation thoroughly, let's move on to dropshipping, which is another popular method for stocking inventories.


Strategy 2: Using Dropshippers to Build Your eBay Inventory


So what is a dropshipping service? 


A dropshipping service generally allows resellers to purchase goods below retail price, so they can then resell them at retail price and make a profit. 


One of the major advantages of using a dropshipping service is that they will actually package and deliver all of the items for you, cutting down on the amount of work you have to do. 


They will also deal with customer service and returns for you in many cases, also cutting down on the amount of work you have to do. 


So think about it, all you do is sell a product which is NOT in your inventory, and your dropshipper will deliver the product directly to your buyer, with your company stamp on it! 


Your buyer will never know that the product has been dropshipped.


STARTING AN EBAY BUSINESS WITHOUT A CENT


The main power of dropshipping is that you get to start an eBay business with a massive inventory (any amount and anything you desire), and all that without paying a cent! 


Dropshipping is truly the best and most effective way of starting a successful eBay business without a physical inventory at hand.


Disadvantages of Dropshipping


There are, however, a number of negatives to using a dropshipper. 


The first is obvious: for a small price, any eBayer can access any dropshipper, which means you are guaranteed to have stiff competition with everyone who is using the same dropshipping catalog, as they will have an almost identical inventory with identical prices. 


Like said, competition on eBay is still in almost every product niche.


Another problem with using a dropshipper is that you sacrifice control over your business to a certain degree. 


While this actually saves you time and money, it prevents you from setting all of your store policies and from stopping things before they go wrong or correcting them when they do go wrong. 


So it really depends on what you are selling. 

If what you are selling is going to be highly subjective, then dropshipping is not the way to go. However, if you are selling pre-packaged items such as electronic goods, clothing, etc, then dropshipping is a great way to start off.


The last problem with dropshipping services is that many of them require you to pay some sort of fee in order to access their lists. In almost all cases, you are better off avoiding these dropshippers and finding a different services that will allow you to use it for free. 


There are countless dropshipping firms out there claiming to be wholesale dropshippers, which in fact, they are merely middle persons between the REAL wholesalers and you. 


It is difficult getting real wholesale dropshippers. 


We have searched the internet over for years trying our best to get the best dropshippers and there are only a handful of them.


RECOMMENDED DROPSHIPPERS


One relatively large dropshipper is Vistawholesale, which you can find at the following URL: http://vistawholesale.zoovy.com. Another dropshipping service is Quality Books, which, as the name suggest, deals strictly with books. You can learn more at the following URL: http://www.qualitybooks.com/dropshipping.htm.


WHOLESALE DROPSHIPPERS


By far one of the largest wholesale dropshippers is at http://www.myconsumermarketplace.com/ Even better here is that when you sign up with this site, what you get is the actual listings of the product. 


Complete with product picture and descriptions! 


Nothing is easier than to just copy paste the entire product description into your eBay listings. 


You get products at real wholesale prices too. For example, a Motorolla Limited Edition Razr V3 slim is only going for below USD 200 when in retail it is almost USD 500! 


We do urge you to check out this wholesale site.


Before you make the final decision to work with a dropshipper, you will want to actually order an item for yourself or as a present for someone else using the system. With most dropshippers, you can purchase items for around $1, so this wont be costly. 


Making the purchase will give you a rough idea of what the packaging looks like, how fast items ship, and how the ordering process works.


Since a dropshipper is technically a “middleman” service, the prices wont be quite as low as they would be from a normal wholesaler. 


This means that in order to be successful with a dropshipper, you will have to maintain a higher sales volume.


If you're not thrilled with any of these models yet, the next one is completely different.


Strategy 3: Stocking Your Inventory from Brick-and-Mortar Auction Houses


If you live right next to an auction house, this might be an excellent way for you to stock your inventory; however, as with any market medium, you should be careful before buying. 


If you know certain items will be up for auction in the coming week, spend some time researching product prices on eBay to determine what a realistic, competitive rate for those items would be. 


However, in most cases, eBay sellers are not within convenient range of auction houses, and this fact makes purchasing from brick and mortar auction houses not viable.


Additionally, create and work within a specific buying framework. As it is already, purchasing from auctions will make selling a bit trickier, as you wont always have a uniform inventory. 


You wont be able to predict how well new items will sell and you'll constantly have to change your templates.


Using brick-and-mortar auction houses can be a viable method for creating an inventory; however, it is important that you find a consistent way in which you can do it. 


You may want to look for all auction houses in your area, monitor what will be on auction in the coming days, and then travel to auction houses whenever they offer something in your specific niche. 


Auction houses are especially good when you are in a niche market. 


For example, if you are in a market selling specifically one type of item which is not in the mainstream of products, then it is a good idea to get your inventory from auction houses. 


As you know, most people do not live near auction houses and if you can get your items from an auction house, then it is almost definitely that you will have less competition when selling your niche product on eBay.


Strategy 4: Stocking Your Inventory Using Flea Markets


If you live in a place that gets cold in the winter, this wont be a viable all-year strategy, as flea markets will close during the winter months. 


If you live in the tropics or are only interested in selling seasonally, this can be a viable model for your business. 


This method is banging on the seasonal demands on eBay.


The first thing to look for, of course, is a list of flea markets in your area. 


You may want to look in the advertisement section or classifieds in a local newspaper – and also newspapers in surrounding towns. 


Flea markets are a great place to get second hand goods. 

Second hand items sells very well on eBay (in the second hand items category). 


eBay buyers like second hand items mainly due to the big reduction in price.

 

And since you are getting these items from a flea market, it is almost definitely that you can purchase these items at a price lower than you can see on eBay. 


Keep in mind however, this method requires physical inventory and inventory checks.

Your goal at flea markets should be to create relatively uniform inventories from used products. 


Much like auctions, you will have a hard time doing this; however, you may be able to pick up a number of products at cheap prices with little effort.


This specific strategy works best if you're selling antiques.

 

This is because antiques do not have to be uniform or in perfect condition, which means you could buy a completely different inventory every time you go shopping. 


Another advantage is that people PREFER older antiques, as they are perceived as more valuable.

This leads us to yet another way to purchase second-hand goods at cheap prices: classified ads.


Strategy 5: How to Stock Your Inventory Using Classified Ads


There are two ways in which you can use classified ads to stock your inventory. 


The first way is simple: collect all local newspapers, search for items you might be able to use, circle those classified ads, and contact all of the owners with inquiries.


The other method is a twist on this same method. 


Rather than looking through the classified ads (or in addition to), create your own ads that say you are willing to purchase second-hand items at a reasonable price – or to take them off of people's hands if they do not want them. 


Not to mention you get them at very cheap prices!


This method is probably the most risky and unstable method of stocking your inventory; however, if you insist on using it as your business model, you definitely can turn it into something workable that will generate revenue. 


However, this method works great for items which are hard to find, mainly this method applies to very specific pieces of items such as an antique grand piano, first edition books and such.


Your next option is the staple for all uniform, stable eBay businesses: wholesale sellers.


Strategy 6: Stocking Your eBay Inventory Using Wholesale Sellers


Before you begin this method, it is important to accept that, for the most part, wholesale sellers are not actually advertising over the Internet. 


If you want to purchase actual wholesale goods, you will have to do it in one of two ways: search for manufacturers over the Internet or search for wholesalers off of the Internet.


If you know who manufactures your product, you can go straight to that brand's website and look at their contact information. 


Call or email them and ask them for their minimum wholesale order size. 

If it's too large to be workable for your business, ask them if they can direct you to wholesale sources. 


While these “wholesalers” will charge a slight mark-up, the products you purchase will come at a sufficient discount to be worth it.


Now, if you'd rather not do this, you can contact the closest store that sells the specific brands you are looking to purchase. 


Ask them if they offer wholesale accounts – and, if so, how large an order would have to be to qualify for a wholesale discount.


If you do decide that buying from a offline wholesaler is best, than it is wise to find out from the wholesaler if they ARE actually the manufacturer of the product. Make sure that your wholesaler has a Brick-And-Mortar facility that does the actual building or assembly of the parts you desire.


MACHINE SALES – EBAY WORKS TOO!


One of the best (but difficult) way of earning big money on eBay is to auction off simple machines or fabricated items such as clean room equipment and such. 


This method is especially good for trading companies or freelance sales agents which are in contact with manufacturing plants. 


Why is this a lucrative method? 


Because you can easily contact manufacturers from the East such as China, Malaysia and Singapore for the very same items for a fraction of the price! 


As of writing now, China may be still too undeveloped and culturally to different to do business with, however, manufacturing plants in Singapore and Malaysia are excellent as these two countries are the main manufacturing houses of the east. 


One excellent source of machine parts and stainless steel fabricated parts can be gotten from http://www.mylotechnologies.com. 


This plant actually produces customized machines for Multinational Companies and they can be treated like dropshippers. This means that you do not have a pay a single cent before the product is sold. (see Dropshipping).


Unlike electronic products which hardly give any profit, equipment and machine sales often generate hundreds, if not thousands of dollars in profit in a single sale. 


All you do is advertise the product (pictures and description all in place), sell the product, and keep the difference. 


If you are serious and want to earn six figure dollars on eBay, this is one of the great way of getting there.

If both of these methods are not to your liking, you can always purchase a wholesaler list online. 


There are actually a number of them floating around on eBay for almost any imaginable item. 


But do remember to ask the owner to make sure they are producing their own products and not merely a middle person between the wholesaler and you!


And this brings us to our seventh business model: purchasing from liquidation sales.


Stocking Your eBay Inventory from Liquidation Sales


While this is an excellent method for creating a seed inventory, it is not quite as good for maintaining a regular inventory, as liquidation sales are relatively unpredictable events, which means you will have no chance of building a uniform inventory from liquidation items. 


This is because liquidation items come in bulk and they are not uniformed. 


You can buy them by the crate, and in each crate you will receive a host of varied items within a theme. 


Think Branded T-shirts, and you will get a crate of 500 pieces of branded shirts ranging in size and brands. 


One of the best liquidation companies are liquidation.com.


With this being said, it is always a good idea to have access to some source that announces liquidation sales, especially if they are in your area. 


These cheap items can be excellent complements and upsale items for what you already have in your inventory.


The last source for building your inventory is similar to liquidation sales: government auction sales.


Strategy 8: Stock Your eBay Inventory with Government Auction Products


Much like a closeout sale or auction for a normal business, the government normally holds government auctions to liquidate items that must be replaced or to liquidate items that have been confiscated by Federal Marshals.


You can participate by locating these different auction outlets. I personally suggest two government auction sites. 


You can find the first at the following URL: http://www.bid4assets.com/. 

This site lists Federal Marshall auctions; Federal, state, and local government auctions; foreclosed real estate auctions; and seized property auctions. 

While this site has become relatively popular, it is completely free to use – and actually offers some excellent deals.


Another source I suggest is the following: http://www.govliquidation.com. 

This site is absolutely massive. Rather than featuring foreclosed properties and seized items, it features all of the items the Federal, state, and local governments are attempting to liquidate. 


The list ranges from bulldozers to pet rocks by the pallet. 

To make things even better, the interface is somewhat hard to use, which deters a considerable amount of bidding competition. 


However, when dealing with government auction houses, do make sure you read and properly adhere to the terms and conditions listed.


While both of these sites sometimes refer you to live auctions, in many cases, they allow you to simply bid online for products, including even real estate.


And there you have it – the eight ways in which you can stock your inventory for a conventional, straight-forward eBay business model.


REMEMBER!


There are still three important components that must be present in order to have a success eBay business with a conventional model: a clean, high-quality template, a “unique selling proposition,” and traffic. 


Since templates has already been covered in our last section, we will move on to the unique selling proposition, which is quite important on eBay.

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