eBay Watch: Strategies for Wholesale Sourcing By Vangie Beal
March 26, 2008
A quick browse through the ECommerce-Guide forums shows that wholesale sourcing and drop shipping is an issue that many new online sellers and merchants are trying to figure out. Where to buy and what to sell are some of the most discussed questions. Following the latest ASD/AMD Wholesale Trade Show held in Las Vegas, we spoke with Skip McGrath, eBay Power Seller and author of seven books about eBay and Web marketing, about his recently released semi-annual wholesale sourcing issue of The eBay Seller's News.
After attending one of the largest wholesale trade shows in the country, McGrath said there is no shortage of very low-cost items (cheap junk in other words), as these vendors filled about two-thirds of the show with this category of product. For those who sell higher-value items, as McGrath does himself, it is still a show worth attending. However, you have to have the patience to find these vendors on the floor.
McGrath described the show as "an amazing experience and new people are always hit by a shock-and-awe feeling when they go in and see the massive amounts of products and booths. The ASD/AMD Wholesale Trade Show actually covered three convention centers, with one center taking up two floors. It's booth after booth, and floor after floor of product."
So, how does one go about taking advantage of the resources offered? McGrath offered us some tips on how to get the most out of tradeshows, as well as other strategies for wholesale sourcing.
One of the biggest mistakes inexperienced sellers can make, he said, is going with what they think is a drop ship company, or wholesaler, only to find out the business is actually functioning as a middleman. Many of these companies will buy from the wholesaler, add their mark-up and also charge you a drop shipping fee.
McGrath cautions eBay sellers to steer clear of these companies. "To make the most money, as a seller you have to ensure you are working with the manufacturer, the manufacturer's master distributor or the wholesale or drop shippers' reps. Otherwise you are getting the same product at a higher cost."
Meeting Face-to-Face Nets Discounts, Deals
For the most part, McGrath says that tradeshows are crucial to developing your own eBay business. While searching online can be a great resource for finding wholesalers, there are significant advantages to attending industry events. At a tradeshow, not only can you see the products firsthand, but many wholesalers just do not have an online presence.
Additionally, sellers looking for deals can take advantage of special discounts if they purchase at the show, such as a percentage off the order or free shipping. At times, you'll also find wholesalers at these events are willing to lower their total minimum order. Event that a wholesaler may require a $200-dollar minimum order, for instance, it will often let you buy a couple of cases of product to try, or others may even lower that minimum order amount if you place an order at the tradeshow.
McGrath also gave presentations at the Wholesale Sourcing Summit, where he discussed the pros and cons of selling low versus high priced items on eBay. McGrath recommends sellers look for those niche products that have a larger retail value. "In the end," McGrath said, "higher end items equate to less time selling and more money for sellers." He said from the 2,000 booths at the tradeshow that he perused, he collected materials from about 40 wholesalers in total. "I might try around 20 of these guys but chances are only two or three will be worthwhile."
For those wanting to dive into wholesale sourcing, Skip McGrath's "The Wholesale Buying System" can be found on his Web site, and offers a complete course in buying wholesale. It explains the industry, how to import, how to find sources and more. It also includes a lifetime membership to an exclusive Web site with direct links to over 60,000 wholesale sources. McGrath's newsletter, which you can join for free, includes a wholesale sourcing section in each edition.
Sellers and merchants can also catch McGrath at eBay live in Chicago June 17-18, where he will be giving a presentation on wholesale sourcing.
Getting Started: eBay Wholesale Sources If you are unable to attend a tradeshow to pick up your own wholesale sourcing contacts and product, here are five wholesalers you can check out online, courtesy of McGrath:
eXtreme Toy Zone: This importer, distributor, and wholesaler offers a nice line of toys from dinosaurs to pop-star dolls. They also carry a large line of remote control (RC) toys.
Sidelines International: This site is a retail site, but you can contact the wholesale division if you're looking for a line on Zippo lighters and products, Victorinox Swiss Army Knives and other products.
Kole Imports: A broad supplier offering a huge selection of more low-priced products like auto accessories, tools, hair care, seasonal items and more.
Helmets Inc.: An extensive selection of DOT approved motorcycle and bike helmets as well as novelty helmets.
Cutting Edge Products: Offers wholesale and dropship programs for security products like alarms, stun guns and other unusual products related to safety and security.
Vangie Beal is a seasoned eBay seller, frequent contributor to ECommerce-Guide.com and managing editor of Webopedia.com.
Do you have a comment or question about this article or other e-commerce topics in general? Speak out in the SmallBusinessComputing.com E-Commerce Forum. Join the discussion today!
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