How do they do it??

Full Member
scp63
Posts: 3
Joined: 16 Jun 09
Karma: 
11 Aug 09 01:01:31 am
Hi, i am fairly new to Salehoo. I am also fairly new to selling on ebay. I recently got my tax id and sales certificate and want to try my hand at selling on ebay (hopefully other places as i learn). I have read several of the posts here already and i am a member.

I have even gotten some really good tips from the forums and feel like there is a lot of knowlegeable people that have been doing this for a while. I also know i have a lot of learning and hard work ahead of me. What i do not understand is how do some of the sellers do it.

Let me explain, i have bought a few lots of various merchandise from liquidation.com and have sold items like ipods and MP3 players. I have also bought new and refurbished items from another place i found right here on salehoo.

I am not really making any profit though in fact i am sure im losing money. I am being challanged to come up with creative ways to sell things, but it makes it difficult. For example i bought a Lot with some AMD processors from liquidation.com that were listed as returns. As it turned out when i received them they all had bent pins. Most of them i have been able to straighten the pins on, about 3 of them had broken pins (in my opinion they all should have been auctioned as salvage and not returns).

The problem i see is not many people would want to buy something like that (even though i have tested the ones i straightened and they work fine) for fear of them being damaged, and if they did i am sure they would expect to pay next to nothing for them. So do i sell for a loss, or do i build a complete system now which requires more time and money.

I consider myself a very honest person and would not even think of trying to cheat or mislead someone. This is just one situation i have run into. I also have come across items at my wholesale suppliers site that i have considered buying for resale on ebay to realize my cost would be say 35.00 and discover that somebody else is selling them for around 20.00 plus free shipping. This is the part i do not understand how they are able to sell and make any profit, or are they getting such a good deal from their supplier. It is not just one item, i have found several items like this.

I figured before i started selling this was not going to be easy, nor did i expect it to. Its just that i find it discouraging at times when you think you have found something you might make a little bit of profit to realize some one else is selling way cheaper than you can buy for, or that items you bought in auction for resale are damaged.

So, how do they do it, and what am i not doing right. I am not asking for anyone selling and making a profit to give me their secret recipee i am just seeking maybe a little bit of guidance, or if it is not to much to ask, maybe someone with the experience and wisdom to maybe offer a little bit of counseling to help get me going in a good and positive direction, thanks.

Site Admin
fudjj
Posts: 5907
Joined: 27 Jul 07
Karma: 
11 Aug 09 03:26:40 am
Hi scp63,

You have to always remember that ebay is not a retail market place, it is a wholesale market place, and the biggest one in the world on top.

One of the biggest mistakes I see people make when trying to sell on ebay is to look for a wholesale supplier. Of course ebay is already full of wholesale suppliers, so trying to find one that you can buy from and then try and sell at a profit back on ebay often makes very little sense.

Yes, there are some products that aren't sold at true wholesale, but the simple fact is that most are, and most certainly most of the popular products are, and if they aren't, then it's only a matter of time before they are.

If you do happen to find a product that is not at wholesale price, then you have an opportunity, however you would most likely have to source in a volume that would give you the best possible wholesale price to give you margin.

You can't just buy one or two things at true wholesale price, that's just a myth. Look at a company like Walmart, just imagine what quantity they buy in and what sort of wholesale discount they would be getting for buying in that volume.

Now compare some of their products to the same found on ebay, chances are that the prices on ebay will be even cheaper, so that might give you an idea of how much volume that seller is buying in to be able to sell at that price.

As I said, ebay is the worlds biggest wholesale marketplace, and that means it has some big companies selling products on there, not just newton nobodies.

Regarding liquidation.com, if you are going to buy surplus merchandise from an auction, you really have to know the value of what you are buying so you can adjust your bidding to meet the market expectations.

Straight away you are bidding on returns stock, so that means you are bidding on stock that a customer has had cause to return. Now that should be telling you that you are going to get a percentage that are not going to be usable. What size percentage that actually is, well that is something only researching several loads can tell you in reality.

If you are finding it hard to sell the products on ebay at profit, that indicates to me that you are paying too much for them to start with. Of course it could just be that the demand for the product is low as well, but that is the type of research you are going to have to do to identify a product with potential.

If you want to deal in liquidated stock I would suggest looking at actual liquidators, not a site like liquidation.com. If you buy from a liquidator, you will buying at a set price, so it will allow you to research an accurate pricing model, and from there you will know what potential the products have.

If you want to keep buying this type of stock at auction, then you really do need to have a baseline price that you are prepared to pay per load, or your pricing is going to be all over the place.

I hope that cleared a few issues up for you.

Cheers


Mark (fudjj)

Community Manager
SaleHoo.com

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Full Member
eddleman
Posts: 2
Joined: 10 Jul 06
Karma: 
13 Aug 09 01:01:56 am
I have been buying from Liquidation for a year now and have had a lot of success. I find that about 70% of the stuff I get is in very good working order, if not close to being new. I won't give away anything here, but some of the sellers are far superior to others. One tip - don't buy extended warranty returns, this is stuff that people have owned for some time and have generally returned because it no longer functions. But I have gotten lots that were complete junk. I would suggest you check out Amazon's Marketplace, higher selling prices are available there, you just have to deal with a 'different' type of customer.

My Question for the community manager - Wal-Mart and Best Buy were very large sellers on Liquidation.com until the middle of this summer, now they are basically gone. Where are they liquidating now?

Thanks

Site Admin
fudjj
Posts: 5907
Joined: 27 Jul 07
Karma: 
13 Aug 09 01:23:02 am
Hi Eddleman,

I think you'll find it's a combination of both less stock being liquidated at the moment and companies selling direct to liquidators themselves.

With the downturn in customer confidence, retail figures have taken a serious dive in the US. This means that turnover is down and stores are not only ordering less stock, but are holding stock longer.

This had made the competition between liquidation companies a lot tighter as loads are drying up. I know a certain range that we were buying in a dozen pallets at a time of from a big department store chain as actually doubled in price.

If we don't pay it, our competition will!

Another factor that will also be effecting the surplus market is that this is usually a slower time for clothing loads anyway, things really slow down now for the next few months.

So, it's a solid combination of things in my opinion.


Mark (fudjj)

Community Manager
SaleHoo.com

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