Electronics is actually the most fiercely competitive category on eBay. The electronics industry has always run on very low margins from wholesalers to end users and marketplaces like eBay have only tightened the margins even further. You'll find that most electronics sell at the wholesale price or below wholesale on eBay. That's how intense the competition is.
If you do wish to stick with the electronics industry, then here is what we suggest -
Buy in large quantities. Drop shipping is a great way to start a business but in the long run, you may need to buy a significant proportion of your inventory in bulk to ensure that you get maximum profit margins on each item that you sell. You can either use liquidation suppliers to get bulk lots at prices well below wholesale or purchase from wholesalers in very large quantities to drive the wholesale price down. Then youâ€™ll stand a fighting chance of competing with the big boys.
Increase your feedback and get powerseller status BEFORE entering the electronics market. This will give you more visibility in the search.
Sell on your own website. It levels the playing field somewhat, and means that you donâ€™t have to compete on price alone. Customers donâ€™t tend to be so bargain-oriented as your typical eBay buyer and will probably value professional customer service and fast shipping more than taking a chance on a dirt-cheap eBay auction. However, youâ€™ve still got to be competitive against the likes of WalMart, meaning that buying in large quantities or liquidation will continue to be necessary.
Add third-party extras and up-sells to your orders. These will help you bump up your margins to a much more acceptable level. If the buyer thinks they are getting a great deal on the main item, then they'd probably be willing to pay a bit more overall to get the extras. For example, you might sell an iPod package that includes accessories with higher profit margins such as speakers, skins and car chargers.
Better still - consider selling accessories for electronics rather than electronics themselves. Power cords, mobile phone and iPod accessories, computer components, radio and communications equipment and accessories, or even refurbished electronics can produce healthy margins and donâ€™t require the fat wallet which consoles, iPods and phones demand. Accessories are very popular, have less competition, cost less to ship and have much greater margins.
Hope that helps.