Here is some advice that anyone who has been trading for a while will agree with. Stay away from things like iPods, consoles anything mainstream that EVERYONE is already doing.
There is far too much competition and the markets have already been cornered.
Look for specialty items. Just look for things that you think would sell that no one else is doing or you can do cheaper. Ask your friends about what they want or have. I get alot of inspiration from just talking to my freinds and seeing what they are into and then researching it.
You are right, there are alot of people selling items on eBay. That also means there are alot of people who could potentially be selling wholesale on eBay.
I have found a couple of people who I just contacted and found out they sell wholesale and for a far cheaper price.
Definately look to ebay for wholesalers. Keep at it, it does take time and yes... it does take money.