How do these people even profit?

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top-shelf
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12 Jul 10 03:53:02 am
I have recently taken to bidding on bulk items using the eBay platform because of some of the ridiculously cheap deals that can be found.

For example I am currently bidding on 10x sterling silver chains. It seems like shipping alone would make the cost of this item from Hong Kong more expensive, but shipping is offered free of charge.

How can somebody turn a profit like this? Is it that they are taking a risk by posting it for that price and expect more people to bid on it? These people have very good seller ratings so I don't think it's a scam, and who would scam someone for 6 cents.

To me it just doesn't seem logical, maybe someone on here could help me grasp the concept.

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fudjj
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12 Jul 10 05:30:51 am
As you suggest, it could well be a marketing strategy to bring some bidders into the market and drive up price, of course it could well just be stock they are trying to liquidate quickly for any price.

The easiest way to tell would be to look at their past sales, if they always sell in bulk and if they kick off at a very low start up price. If they do, then history may well have taught them that the strategy they are currently using is the most effective at generating a good price.

My advice, work out what you want to pay for it and then sit back. You don't want to get involved in a bidding war, that only serves to cost you more and make the seller more.

Hold your cards close to your chest, you really don't want other interested bidders knowing you're there neither. Know your price, then I always suggest that if it hasn't reached the maximum you would be happy paying within the last 10 seconds, then get ready to pull the trigger.

If you get outbid at the death, then someone was simply prepared to pay more for them than you, but by not getting into a bidding war early and driving up the price, you're always in with a chance of getting them for a good price, just so long as no one else runs the price up on you lol


Mark (fudjj)

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top-shelf
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12 Jul 10 06:08:04 am
Very helpful post, thank you. Looking at their history taught me what I needed to know. I am very new to buying lots off of eBay and you guys have helped me through all my rough patches.

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fudjj
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12 Jul 10 09:24:01 pm
No problems at all TS, always good to know that our advice is helpful ;)


Mark (fudjj)

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asalazar
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15 Jul 10 11:59:13 pm
i am also a newbie to salehoo. i have had an account for a while its just ebay is hard to sell on. and i did the newbie thing and tried to compete with the big boys as u said in another post. and failed. so my question is what are items that will sell that wont have alot of fees? and i cant find wholesalers for the life of me.

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fudjj
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16 Jul 10 01:20:07 am
i am also a newbie to salehoo. i have had an account for a while its just ebay is hard to sell on. and i did the newbie thing and tried to compete with the big boys as u said in another post. and failed. so my question is what are items that will sell that wont have alot of fees? and i cant find wholesalers for the life of me.


Yes, eBay can be a very rough playground when you are up against the big kids. As to what product to sell, well that's something that everyone wants to know, but the answer isn't always that easy.

Each market is different, seasonal factors come into play with a lot of products, economic factors as well. It takes a lot of research and usually some degree of trial and error to sometimes get a foot hold. It really is a process, you should start by researching your products to find the product genre where you think you would like to try.

After you have that all nutted out, then look for supply avenues. If you can match a viable product with a cost effective supply source, then you have a solid chance on a site like eBay.

I see so many times where people are looking for a wholesale source without even knowing what on earth they are going to sell. Trust me, that's seriously back to front and it is a road to complete frustration in most cases.

A standard market S.W.O.T. analysis should be done by everyone going into any business, but especially this business.

S: Your Trading STRENGHTS against your competitors
W: Your Trading WEAKNESSES against your competitors
O: OPPORTUNITIES you can clearly identify in the market
T: What and where are the major THREATS are and will be coming from

Now the idea here is to develop your business plan to a point where your strengths out weigh your weaknesses, and you have as many strategies in play to cover any weaknesses you can identify. You need to be able to clearly identify both current and future opportunities and have a clear understanding of the threats you will face, and develop key strategies to cover those threats.

The bad news is that not everyone will be able to do that, and if they can't then they should honestly seriously consider a different carrier path. The good news is if you can tick all the right boxes with that type of analysis, then you have a very solid foundation to build a business on. Get all that sorted, along with some product research behind you, and then chase down supply avenues.

: )


Mark (fudjj)

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tblack41
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23 Mar 11 11:44:10 am
Good post by fudjj and I'm going to add to that since he got into some marketing lingo with the SWOT analysis.

As far as selecting what product to sell, I recommend to all newbies grasping a solid understanding of another term called the "PRODUCT LIFE CYCLE."

I'm going to do my best on explaining this and , fudjj or any other Salehoo staff please add to this.

The Product Life Cycle (PLC) consists of four stages: 1) Introduction of product, 2) Growth of product, 3) Maturation Stage, and 4) the Decline stage of the product.

I suggest anyone not familiar with this to Google it and read more!

Figuring out where your prospective product is on the PLC will help you determine if it's worth taking on.

In this business it's very easy to get ahold of products that are in the fourth stage (decline) at a very low price. For example, the other day I was browsing Via Trade sourcing for products and came across a lot of like 100 Nike arm-band Ipod holders. You could get them for something like 70 cents per unit, which I think is very alluring for newbies. However, I'd label that as a product at the end of the PLC....you can get it cheap, but you're going to have to sell it cheap, and you might have a hard time selling them in a reasonable amount of time.

Now I don't have a lot of room to stock inventory therefore I must turn my products over somewhat quickly. This is why I mainly sell store returned items. Most of them are in the "growth" or "maturity" stage of the PLC, meaning that they're still being advertised, still being sold in stores, and still wanted by the consumer.

I'm not knocking products that are at the end of the PLC, there's lots of thrift stores that specialize in that kind of stuff. If I had more room, I'd probably get products at the end of the PLC.

Now take a look at the flip side of the PLC, the introduction stage. If you can get your hands on those kinds of items you need to be aware that people generally may not be aware yet of the new item launching. However, it's pretty hard to get those kind of items at low cost. Take for example the Apple Ipad, a product I view as coming out of the introduction (because everyone knows about it) and going full-blown into the growth stage. If you get your hands on a pallet of those, you'd probably be lucky to turn a very small profit.

That's all for now. I hope that shines some light on things here. I'll be interested what some real pros like fudjj has to say in regards to the PLC and product selection.


"If you don't love it, leave it. USA #1!"

-Ricky Stanzi, 2010 Orange Bowl Post-Game Interview
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tblack41
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23 Mar 11 11:59:31 am
One more thing I want to add....

Not all product life cycles are the same amount of time. Some products like the Nike Ipod arm-bands that I mentioned probably have a short PLC, but the actual Ipod will have a very long PLC.

So you're comparing product X and product Y, be aware the PLC of X may be a year, but the PLC of Y might be 10 years. And there a zillion different factors that go into that.


"If you don't love it, leave it. USA #1!"

-Ricky Stanzi, 2010 Orange Bowl Post-Game Interview

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