Who is this workshop for?

This workshop is for beginning eBay sellers who are interested in starting a business on eBay and for eBay hobbyists who want to turn their hobby into a consistent income.

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When you are just starting out as an eBay seller with an eye towards building a business, the best place to start sourcing your products is your home.

A recent study revealed that the average home owner has $3000 - $5000 of unused merchandise around the house at any given time.

And this is a perfect source for your initial stock of inventory!

Why do this instead of purchasing inventory?

Well, for the very beginning seller, you first need to determine if selling on eBay is right for you. Do you like the process of listing, shipping, providing customer service?

You’ll want to do a test run of your new business venture and in this stage of your business, there’s no need to spend money on inventory when you don’t have to.

Plus, you’ll get some immediate cash flow. A MUST for every young business.

Interestingly, a lot of new sellers want to skip this step and jump right into sourcing products wholesale.

But you need to try out the selling process first and start making some money in the process!

Then you’ll be in a position to reinvest those profits down the road into some wholesale purchases.

You also want to start honing your selling skills with inventory that allows you to make mistakes.

It’s a lot easier to swallow selling that unused gift from Aunt Myrna for a bit less than it’s worth because of a listing that’s not yet up to par than it is a brand new wholesale item that you’ve just invested $100 in.

Immediate Sourcing

Once you’ve sold everything you can from around the house, it’s time to do some immediate product sourcing.

Immediate product sourcing is purchasing inventory on the spot that you can then turn around and sell right away for more cash flow.

Examples of places to do immediate product sourcing would be:

- Yard sales
- Thrift stores
- Estate sales
- Craig’s List
- Kijiji (eBay’s Online Classifieds)
- Your local newspaper
- Friends and family
- Retail store clearance sales
- Retail store coupon sales
- Retail store closeouts
- Online store closeouts

All of these immediate product sourcing options give you the opportunity to supply your eBay business with more inventory, while still minimizing your upfront investment and maximizing your back-end profits.

Informed Buying


Right about now you’re probably asking “Ok, how do I know if there’s anyone interested in buying the product I’m about to source.”

Here’s where informed buying comes in. In order to determine if there is a market i.e., a buyer for your product, you must do your research on eBay to see if there are like products currently in demand.

The fastest, most effective way to do this is by using a research tool (you’ll find good recommendations for research tools in the eBay Solutions Directory at Link

Or you can comb through the eBay Completed Items listings to see if there is a demand for the product you are thinking about selling.

Keep in mind that time is money though! And you’ll make a lot more headway using a research tool that can give you immediate market demand reports than you will looking through the Completed Items page.

Pros and Cons


Before we continue, let me say that every product sourcing option has pros and cons. And I’m going to cover the pros and cons of each product sourcing option as we go through them.

Drop Shipping

The subject of drop shipping is one that is shrouded in confusion and mystery. Drop shipping has been touted as the answer to all your product sourcing needs and is also portrayed as the root of all product sourcing evils.

The truth is – drop shipping is neither of those.

It’s simply one method of product sourcing that you should keep at your disposal in your product sourcing toolkit.

Drop shipping can be excellent for beginning sellers because you don’t have to buy inventory in bulk upfront, thereby limiting your inventory investment and risk exposure to buying a product that won’t sell.

But drop shipping also has its problems. With drop shipping, your profit margins will be smaller.

Why?

Because you are paying someone else for warehousing and shipping the product. They need to get paid for that service.

You end up with a smaller profit margin on the product.

Drop shipping also takes the control out of your hands. If your drop shipper ships slowly or ships the item poorly packaged, you’ll take the hit for bad customer service.

And with the new importance of the DSRs (Detailed Seller Ratings) you’ll want to pay more attention than ever to the quality of drop shipping company that you use.

However, drop shipping can be an excellent way to:

- Test market new products before investing in a large inventory purchase
- Sell heavy or bulky products that you cannot store at home
- Sell products on an occasional basis that you don’t want to stock full time
- Compliment other methods of product sourcing

Drop shipping tip #1: ALWAYS test out your drop shipper before relying on them to supply your customers. Place an order with them and see how they do. Don’t make your customer the guinea pig for that first drop shipping order.

Drop shipping tip#2: Beware of drop shippers courting online sellers with prices that are too good to be true. Drop shippers do not sell name brand products like Sony, Prada, Coach etc at 10% of retail value. When you see those websites, no matter how appealing, don’t do it.

Drop shipping tip #3: Any supplier can be a drop shipper. Any supplier has the option to drop ship if they want to. All you have to do is ask. You may get a lot of “no’s” but that one “yes” could be just the drop shipper you need!

Liquidation

Liquidation or closeout companies sell merchandise that did not sell in the primary market. Liquidation or closeout inventory can be comprised of seasonal merchandise, discontinued merchandise, customer returns, salvage (damaged) merchandise, and overstock.

The benefit to selling this kind of merchandise is base cost. Liquidation merchandise often sells for pennies on the dollar. With the right type of liquidation products you can make a nice profit.

The drawbacks are:

- Liquidation merchandise is usually sold in pallets as large as 7 feet long/wide by 7 feet high. They are delivered by big 18 wheeler trucks.

Unless you have room to store this kind of merchandise and take delivery via 18 wheeler, you are not ready for liquidation.

- A percentage of liquidation merchandise will not be sellable. Literally, it will be junk that you will need to dispose of. However, because your per unit price on liquidation merchandise is low, you can still make a good profit on the remaining merchandise.

- Liquidation merchandise is time consuming to sort through. With hundreds of pieces that need to be sorted and checked, processing liquidation merchandise can be very time consuming.

- As with drop shipping, there are a lot of liquidators who court eBay sellers with the lure of big money and fast profits. You must always thoroughly check out a liquidation company before doing business with them. Once you pay, you will not get your money back!

Note: When you find a good liquidator you can pick up a few pallets through out the year and run some awesome clearance sales of your own!

Liquidation is not for the faint of heart or those looking to make a fast easy profit. Keep this in mind when you make the decision to buy that pallet.

Some liquidators will sell products in smaller Lots. This is a good way to try out a liquidator.