Topic: Member Workshop: You Don’t Want to Sell That – Finding Products You CAN Succeed with on eBay
Host: worldwidebrandsinc Date: Thursday 04/10 Time: 12:00 p.m. to 1:00 p.m. Pacific time Location: Workshop Board
Description: Cell phones, MP3 players, consumer electronics, designer apparel and handbags… it seems like every eBay seller wants to carry these products. But almost without exception – they can’t. Join product sourcing expert Colette Marshall, of WorldwideBrands.com, as she explains WHY you can’t sell certain products – and why you don’t want to. In this informative workshop, you’ll find out what kinds of products you can expect to sell profitably and the best methods for finding them.
My name is Colette Marshall. I am the Marketing Director of eBay Certified Solution Provider WorldwideBrands.com. We are a fully-staffed Product Sourcing Research company that has dedicated the past eight years to finding and qualifying genuine wholesale suppliers who are willing to work with home-based online retailers.
Our job is to do the very time-consuming research it takes to find genuine wholesalers who are willing to work with eBay Sellers, so that you can spend your valuable time where it’s needed most; running your eBay business, instead of searching for suppliers and trying to weed out all the middlemen and scammers posing as real wholesalers.
Today I’m going to talk about the “hot” products that it seems like every eBay seller wants to find a source for – the iPods, the XBox 360s and PS3s, the Dior and Chanel handbags, etc. I’m going to explain WHY it’s not in your best interest to try to build your business around these products, and I’ll explain the reasons why wholesalers will not work with online sellers for these types of products. And then – the good news – I’m going to show you the kinds of products that you CAN expect to build a truly profitable eBay business around, and that you CAN find reliable wholesale sources for, who will work with you.
You Don’t Want to Sell That – Finding Products You CAN Succeed with on eBay
One of the most common questions we get at WorldwideBrands.com is Where can I find a wholesale supplier who will drop ship iPods for me? or Where can I find a wholesale source for MP3 players… designer shoes… fancy cell phones…and other “hot” surface products?
There are two main reasons that eBay sellers are dead set on selling these items: 1. The first reason is that they are excited about these products. They are gaming enthusiasts or music enthusiasts or fashion experts, and they want to sell products that they feel passionate about.
2. The second reason is that they believe that, because these products are in such high demand, they will easily make money selling them.
However, as a seller, it’s important that you take into account several factors that impact your ability to successfully sell these products on eBay.
The first is that, while the demand for these products is certainly very high, the supply level is also very high. When you consider a product, you have to look at the competition you are up against, and realistically determine whether or not you can compete. The competition for these items on eBay, on the Internet, and in general, is fierce.
The retailers that carry these products tend to be big chain stores like Wal-Mart and Best Buy. These big players can afford to order in massive volumes, for which they receive additional discounts beyond their wholesale costs. They also receive rebates from the wholesalers, which further lower their acquisition costs. Even if you could afford to place the huge minimum orders required to buy these products, you still wouldn’t be getting those extra discounts and rebates and would not be able to compete with the chain stores’ prices. And in many cases, you would be competing directly with the product manufacturers, who sell their own products online.
The bottom line is that, even if you could obtain these goods, you wouldn’t want to – because you couldn’t expect to effectively compete with them.
Another factor that e-tailers often don’t recognize is that, in order to legally sell many of these “hot” items, you must become a licensed reseller. The requirements to become an authorized reseller are stringent; the training is intense; and the order minimums are both astronomical and ongoing.
For instance, to sell iPods, you must become an authorized Apple reseller. Even then, you won’t be allowed to sell Apple products on the Internet – only in a physical retail store. For a list of resellers who are authorized to sell Apple products online, go to WhereToBuy.Apple.com/Catalog.html. This should give you an idea of just how few companies Apple will allow to resell their goods online, not to mention an idea of the buying power of those companies that you’d be competing against.
We often get asked about cell phones, and the answer is the same. To sell cell phones and contracts, you must become authorized by each of the individual cell phone companies. You must complete extensive training to become knowledgeable about the various phones, plans, options, etc. Even with the training, some of the phone companies’ rules still require their resellers to have brick-and-mortar stores. And remember, you’re also competing against the cell phone companies themselves, who are selling their own products online and marketing their own sales websites.
Some of these large manufacturers (Sony, for instance) have licensing and territorial agreements that they must enforce. These agreements prevent anyone who isn’t a licensed reseller from selling these products on the Internet.
The next question we often get is, WHY don’t the suppliers want all these additional distribution channels for their products?
To work within their budget, online sellers often need to start out sourcing products in light bulk quantities, or having their products drop-shipped from the wholesaler’s warehouse, one product at a time. There is nothing wrong with this arrangement – it is ideal for an eBay retailer, and especially for a new eBay retailer. It gives them a way to test products to see what will sell well, without investing heavily into any one product. It gives them a way to offer a deep selection within a product niche, because they don’t have to maintain inventory for their entire selection. And it allows them to gain experience for little-to-no risk, and lets them grow their business at their own rate.
So it’s only natural that many e-tailers and eBay sellers want to make arrangements to purchase these “hot” items in small, affordable quantities or have them drop-shipped to their individual customer’s homes. They figure that, if enough small sellers want to buy these products in small quantities, it should add up to some serious business for the wholesalers. So they assume that wholesalers would be willing to sell them these products in small quantities that they can handle in their online businesses. From their perspective, it makes sense – after all why wouldn’t a wholesaler want all these extra distribution channels for their products?
In order to answer that, and to understand why wholesalers of these products will not work with small, independent retailers, you have to start by understanding the supply chain, as it applies to these “hot” products. You start out with the manufacturers of these “hot” goods. They are responsible for making the product – and that is their only interest. They are NOT interested in selling those products in small quantities to hundreds and thousands of retailers all across the country in small amounts. They are not set up to handle that kind of distribution.
That’s where wholesalers come into the picture. The manufacturer authorizes a small handful of wholesale suppliers and sells products to them in enormous quantities. The wholesaler then breaks those containers up into smaller volumes and resells them to their retailers.
When you’re talking about wholesalers of “hot” products like iPods, gaming consoles, etc., those wholesalers’ main distribution channels are huge chain stores. Their retailers have to order hundreds of thousands of dollars – and that’s just to start an account, with no net terms. So even though they’re selling to retailers, they’re still selling in massive quantities – and that’s how they make their money. The higher the quantities they sell in, the higher their profits.
Additionally, those wholesalers are under contractual obligation to buy and receive more products from the manufacturers within a certain time frame. That means they have to keep those goods moving, to make room in their warehouses for more incoming products. And THAT means that they must require their retailers not only to purchase huge opening orders, but also to re-order huge quantities at set intervals. Because they have to keep their own inventory moving, they won’t accept retail accounts that can’t guarantee moving those enormous volumes every so many days.
Even though many, many online sellers want to carry these products in their auctions and stores, the product supply chain is simply not structured in a way that can accommodate that. It is neither profitable, nor desirable, for these large wholesalers to sell these “hot” items in small, affordable quantities to thousands of little Internet retailers. It would cost them far more than it would be worth for them to offer these products in light bulk, or drop ship them, one at a time from their factories. They are not set up to do business in that fashion, and for them, it is not a profitable proposition.
There are other reasons that wholesalers and manufacturers sometimes don’t want their products being sold online.
You may find that, regardless of where you source their products, some manufacturers simply do not want their goods to be sold on eBay.
If their products sell for less on eBay than what their physical retailers can afford to sell them for, the physical retailers will no longer be able compete and will stop carrying their products. The physical retailers are their wholesalers’ main accounts. If they lose those accounts, the wholesalers will stop ordering, and the manufacturers will go out of business. They don’t want this to happen.
Another reason that manufacturers don’t want their products on eBay has to do with brand-name recognition. Some manufacturers, especially those who make designer apparel, handbags, and shoes, actually stipulate guidelines to the wholesalers regarding what retailers can carry their merchandise. Some even specify which districts within a city their products may be sold in. Often, their wholesalers are only allowed to sell their goods to brick-and-mortar retail stores in high-end areas of town. This is part of controlling their products’ “Exclusive” image.
In the same way, many manufacturers like to control the marketing around their products – including Internet marketing. They work with the authorized resellers on how they should promote their products, to keep the branding message consistent.
Another reason some manufacturers, particularly those who make designer clothes and shoes, don’t like to see their goods on eBay is that they’re worried about counterfeit products. They’re especially concerned about imported products, due to the high number of counterfeit and gray-market products available from overseas. Setting astronomically high minimum orders actually helps these manufacturers and wholesalers to protect the integrity of their product lines.
Many eBay sellers who want to sell designer merchandise or name-brand items have had run-ins with VeRO. You may wonder what VeRO’s role is, in all this…
eBay’s VeRO program (which stands for Verified Rights of Owners) was developed to help combat the high number of counterfeit products being sold on eBay. The program essentially gives the manufacturers and trademark owners of these products the right to decide whether or not their products can be sold on eBay. Many eBay sellers have had their auctions shut down for accidentally violating VeRO terms.
The guidelines that the VeRO program enforces are handed down from the manufacturers and wholesalers. The manufacturers don’t have the manpower or time to check out every individual auction selling their products on eBay, to see if the items listed are real or fake. So many have simply requested that eBay wipe all auctions of their products off its site, and eBay has to comply with that request.
The following link will take you to a partial list of copyright, trademark, and other intellectual property rights owners who report through the VeRO program. The owners listed there are those who have chosen to maintain About Me pages, in order to offer sellers information about their products and legal positions. Rights owners who have not chosen to maintain About Me pages are not included on this list. For questions regarding policies or products, you should contact the rights owners directly.
You may think, If I can’t build my business around this type of product line, then what can I sell?
Many eBay sellers get frustrated when they realize they can’t build a business around their “hot” product-of-choice, and give up all together on the idea of selling on eBay. But there are millions and millions of quality wholesale products that you can sell very profitably on eBay.
If you really have your heart set on selling these “hot” items, then you might look into selling related items. For instance, you can’t build a sustainable eBay business selling Wii’s or iPods, but maybe your eBay store can specialize in the different kinds of accessories that go with those products.
Whatever you sell, the key is to do your research and make sure that you’re getting into a product market where you have room to successfully compete. You have to look at the market, identify gaps in the supply chain, and find your own niche market.
If you research a market and find that a certain type of product has great potential, it’s important not to get too attached to any one brand name. Don’t become discouraged if you find that can’t sell the name-brand version of a product – consider similar products that aren’t name-brand. There are many well-made, off-brand products, and many buyers who are more interested in the quality and price of a product than the brand name attached.
For instance, let’s say do your research and discover that women’s lingerie would be a good category to sell in. You’re not going to find a wholesale source for Victoria’s Secret lingerie because Victoria’s Secret doesn’t have a wholesale division. They only sell through their catalogs and website and their own physical retail stores. So unless you want to become open a brick-and-mortar store and become a franchisee, you’re not going to be able to carry Victoria’s Secret merchandise as your main product line. But that doesn’t mean that you can’t find excellent-quality wholesale sources for that category of items, and sell unique, different women’s lingerie.
Along those same lines, you probably can’t afford to open a retail account with a Graco or EvenFlo products’ wholesaler. But that doesn’t mean you can’t find a niche in baby products.
Your niche market doesn’t necessarily have to be a centered around a Particular Product either. You may find a lifestyle- or value-centric market where the demand outweighs the supply, and fill that void. You might choose “Healthy Babies” as a niche, and build your store and product line around that theme. Or you might choose “Pampered Pets” and bring in products that will appeal to people who think of their pets as their children. The point is that you have a targeted market that you can sell to again and again, and enough room in your product market to compete and still make a profit.
If you want to generate a sustainable income stream with your eBay sales, then it can’t be about selling products you love; it has to be about selling products that sell. You don’t have to be an enthusiast or expert to sell a product line. Whether it’s unique bird fountains for your garden, marine cleaning products, or outdoor furniture, you can become an expert in any category where you find that the supply hasn’t caught up with the demand.
Even though you can’t build a business selling certain products online, that’s no reason to give up on having an eBay business – because for every product that you can’t sell on eBay, there are millions more that you not only can sell, but that you can do very well with.
Our full time staff of WorldwideBrands.com is dedicated to finding the wholesale suppliers that you can use all the methods of product sourcing with, including wholesalers who will drop-ship products for you or sell to you in small, “light” bulk quantities, as well as authorized liquidation wholesalers. We publish all the results of over 8 years of research in our wholesale database. There is a free preview available on our site, if you’d like to explore what’s available within our wholesale database.
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Discounters have given the market a little boost with their numbers today. With our current economy people want a good deal more than ever. What does Worldwide have to offer us to pass on to the cosumer looking ahesd to the rest of the year which will turn heads and stimulate sales? Thank you
I would like to start selling on E-bay regularly and make some extra income. However right now I don't have money to start buying products wholesale. Can you give me some ideas? Thanks.
Worldwide Brands provides you quality research on qualified wholesalers that can help you expand your product offerings. As you look into the upcoming holidays and seasons, one thing that you want to take a look at is your product offerings.
Ask yourself: am I providing multiple options of the product for all levels of consumer (for example: low budget consumer versus high budget consumer). Am I offering other accessories or additional products that the consumer may not know that they need?
Looking at your product inventory and expanding on it will help stimulate those sales across all your auctions.
If that doesn't answer your question, please can you clarify it.
If I have some product in mind to sell, what is the best way to contact the manufactuer to purcase their close outs without spending days playing phone tag?
We also have an ebook about understanding the methods of product sourcing. Sxess, you'll be interested in starting out with dropshipping because that allows you to build a relationship with the supplier and pay for the product as you go. You do need to realize thought that the profit margins are smaller with dropshipping but it's a great way to get started.
The quantify of your product selection really depends on your market. For example, if you're selling pet products their's a wide array of products that you can include in your eBay Store. But if you're selling, unique handmade crystal jewelry boxes then there's not as large an array.
You just need to test your market. Whey you find products that don't work, you replace with a different product idea. Eventually you will find that you have a good number of products that are selling very well and keeping you very busy.
Is your company affiliated with any market research firms that would help your subscribers try to narrow down the successful markets? Trial and error can be very time consuming and costly to any new business.
We categorize wholesalers by the categories similar to eBay's categories. We also have a market research tool as part of the membership that helps you identify unique markets.
Thanks Colette. I'm looking for a manufacturer of wood boxes. So I think your saying that I should find the item on eBay, look at the category and then I'll find the same category on your site and potential suppliers, is that right? I had found a manufacturer in China, worked through the manufacture of a test box, but then they said the minimum order was for a container full, about 100 units, which would have taken me two years to sell. So that deal fell through, I'm trying to find a local supplier who is willing to sell me about 120 every six months. I think this is what you mean by looking for suppliers with smaller quantity commitments, even if they won't drop ship for you. I assume your wholesale suppliers aren't all drop shippers only? Brian A
Our full time staff of WorldwideBrands.com is dedicated to finding the wholesale suppliers that you can use all the methods of product sourcing with, including wholesalers who will drop-ship products for you or sell to you in small, “light” bulk quantities, as well as authorized liquidation wholesalers. We publish all the results of over 8 years of research in our wholesale database. There is a free preview available on our site, if you’d like to explore what’s available within our wholesale database. We are a product sourcing research company. We handle finding the suppliers for you and verifying that they are legitimates suppliers ready and willing to work with online retailers.
Hi Colette, I have a product that sells very well; women's hair combs. So if I were to add products that compliment this product, would WorldWide Brands help me source out wholesalers in this arena. Not sure what the products would be, but is doing that a plan I should pursue. Any thoughts and advice is appreciated. Donna
You bring up a great example of a common misconception. Thank you.
First, you did the correct action by placing a test order before starting the process of importing. It is normal when importing to have to buy in container loads. Manufacturers and Wholesalers are interested in selling in large bulk quantities especially when they're importing overseas.
Second, It sounds like what you're interested in is light bulk wholesale. This is where you can order in wholesale quantities of less than $500. Yes, we do research suppliers in all areas of wholesale including dropshipping, light bulk, liquidation, large volume, and importing.
Third, If you would like to see how the membership is laid out, there is a free preview on our site. Yes, you can search over 9000 suppliers by either category or keywords for a variety of niches.
Please note: For the best profit margins you always want to have the direct relationship with the supplier. That is why we provide you with the contact information so that you can set up your account directly with the wholesaler and you build the relationship directly with the wholesaler to grow your business.
Colette, actually I estimate the 120 boxes will cost me about $40 each so $4800, and they weigh about 30 pounds, I'm not sure if that is light bulk or not? But your answers were helpful. When I search for suppliers and manufacturers can I limit to USA based manufacturing? I want to support our American workers. Thanks
Yes, through our membership you have the ability to searh our extensive database for a variety of products in that niche. You can also send requests to our researchers and they will research those niches for suppliers and qualify them.
But you bring up a great point, you not only want to find multiple suppliers for a great selling product idea, but once you find a niche that is working well for you want to expand your product line ideas.
For example: think about what other accessories your customers might like. What about storage containers or easy carrying boxes that you can provide for a comb? Are you offering a variety of options from low cost to very expensive? As you get closer to the holiday seasons, how can you relate your product to the seasons? (i.e. red combs around valentines with hearts on it) What does your customer need that they may not realize - like cleaner for their comb?
These types of questions will help you decide on how to expand your product selection.
Remember, product sourcing is a continual process not a one time event.
That would not be considered light bulk. The minimum order would need to total $500 to qualify as light bulk. What you're talking about is importing a higher quantity? Light bulk is where you generally will order wholesale from a national supplier who will allow you to order in smaller quantities instead of large minimum quantities.
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