If you want to make money selling on ebay, you should look at finding yourself a wholesaler in the field you are selling in. A wholesaler is the ‘bridge’ between the manufacturer and the retailer. Quite often the manufacturer doesn’t want to deal with individual retailers because of they may only sell hundreds of their product, whereas the wholesaler can sell thousands. Because of this, they only mark up their prices probably around 15%.
Wholesalers have only recently found the power of the internet, with more and more are shifting from having just an online prescence to having a full e-commerce site. And that’s good news for the retailer.
Due to the nature of the wholesaler, they won’t deal with end consumers, and only deal with ‘traders’, but that doesn’t mean they won’t deal with you. Provided you are going to be buying in bulk, in general the wholesaler will sell to you. Being a trader simply means you’re not going to keep the products you buy. If you’re selling on ebay as a hobby that still means you’re a trader. You don’t need to set up a company, the same way you don’t need to when you sell at car boot sales.
So now you know what a wholesaler is, how do you go about finding one. Buy a wholesaler list from ebay, right? Wrong! Those lists may contain thousands of companies, but accurate are they? In my experience, not very. Out of interest I bought a list, and 90% of the wholesalers listed aren’t in the country you’re interested in. Very few had websites, and some just had mobile phone numbers as the contact, which were not in service. Don’t waste your money. They are out of date as soon as they are put on the cd, or in the PDF.
You have a couple of options. The simplest is to pick up the Yellow Pages (or visit Yell.com). You’ll be suprised how many there are on your doorstep. Just pay them a visit explaining that you’re starting to sell online. Some do require letterheads etc, but many don’t. All it takes is a visit to find out.
The other way is to visit a trader directory website. There are a few on the net, but most of them require you to pay to see the wholesalers listed. I think this is backwards. It’s like asking you to pay every month for the use of the Yellow Pages. The right way to do it is to have free access, but if any payment is required, it should be from the advertiser. There is another benefit to the advertiser/wholesaler too, and that’s their page ranking. Search engines look at how many other sites are linking to their site, and more specifically, sites that are related (by theme/topic etc) to each other. Having similar sites linking will improve the page ranking of those sites, which will make them appear higher in search engines. But I digress.
When you find a wholesaler, visit his site. If he’s in the UK, he needs to have a contact name, address and number on their site (as required by section 4 of the Business Names Act, 1985). If they are a registered company, their company number needs to be visible also. You can use this to check how long the company has been in business and their registered address. Give them a call and have a chat. If they’re legit then they’ll welcome the call and quite happily answer any questions.
Check the terms and conditions. Because they sell in bulk, there may be a minimum order quantity for individual items, or a minumum order value. This can be as little as £50 or as much as £1000.
You may need to register to see the wholesale prices. This shouldn’t pose a problem. Once you’ve got the prices, compare them to similar items on ebay to see what kinds of profit you can make. I’ve found prices for the same item can vary quite dramatically between wholesalers. This is because wholesalers get discounts from the manufacturer depending on the amount they can sell. The more they sell, the bigger the discount.
Build up a good relationship with them if possible. Some online wholesalers are very friendly and offer what feels like a personal service. If you are regular, they may provide an even higher level of service.