Part 3
Learn how to buy products at the lowest possible price for resale.
Will you make a profit if you sell at a loss? Of course not! Part 3 will show you how to find wholesalers and drop-shippers that offer products for a low cost. You should never offer anything that will sell for less than a 25% mark-up.
Better than wholesale?
How about free? Find out how to get your products free. I prefer a good drop-shipper myself because you can sell the same products over and over again. However you will have a lot of fun when you get the details and find out how to get lots of free products.Some people say that "you make your money buying and sales can take care of themselves." Though I think that is exaggerated, there is a lot of truth in it.
You should already have worked out the best categories of
products to sell online using the
methods in Part 1 , and done some test
marketing and market research for
products
that sell on the internet in part 2.
If you use an auction for selling you have to consider the possibility that you might have to re-advertise three times before you get a sale for your products, and take the auction fees into consideration.
Many sellers won't sell a product for less than a 50% mark-up and I am inclined to agree with them. So add three times the eBay fees to the wholesale price, and the PayPal fees, then add a 50% markup to get your target selling price. If nobody else is getting that price, you still haven't found a good wholesale price. Realise that sometimes it is impossible to get a good price.
Middle men
Be aware that many so-called "wholesalers" are just middle men skimming off the profits between the wholesaler and the retailer. The closer you can get to the manufacturer, the more profitable it will be.
Make your own products
The supreme example is to write your own eBook, because as you saw in part 2, each sale is 100% profit (apart from the auction fees and PayPal fees)
If you find a handcraft that is in profitably high demand (I emphasise "profitably" because many handcraft products sell for too little. For instance tapestry pictures sell for the same price as a kit to make tapestry pictures. That means that you are working for nothing.) you could make your own products.
Bear in mind the cost of transport. If you find a warehouse full of horribly weathered wooden planks that you can get for the trouble of carting them away, and make them into outdoor furniture weighing 5 hundredweight for the table alone, you can't send it through the post! Make sure that the purchaser realises how much transport will cost.
Find a local manufacturer
Imagine the ideal. You finish choosing your products using the methods in parts 1 and 2, then you realise that you know a local craftsman who isn't selling as much as he/she would like, but doesn't want to learn how to use the internet. You can have a chat and see if you can negotiate a good drop-shipping price, and then sell all the products that the craftsman can manage to produce.
A systematic search for wholesalers
That last idea bothers me, because it relies too much on luck. You have to be lucky enough to happen to know a manufacturer.
I bought a video that shows how to do a search for good wholesalers or manufacturers that will drop-ship for you. It uses search methods that would never have occurred to me. I won't steal his thunder by telling you his secrets, but Karol (Mr Karol Gajda) shows you how to find a wholesaler in about ten seconds for a hot seller on eBay.
There are ten "secret" keywords that the top auction sellers use to find their products, and they are listed in the video. Karol demonstrates a common mistake that prevents most people finding any quality wholesalers.
I am really glad that I found Karol's web page. Click here for more details.
Be alert for problems
If you have products selling madly on the internet you might relax and forget your checking. Then one day you are brought up short. Your drop-shipper has stopped offering a product that you are selling. Your drop-shipper sent you a recent catalogue, but you didn't notice that your products were no longer on the list.
You are going to have to do some expensive public relations work with your customers. Use Karol's ideas to find another source. If you can't get the exact products get a substitute. Send the substitute with a letter saying that there will be no charge, because you made a mistake. Yes, it will cost you money, but it will build up your reputation. Your reputation is even more valuable online than it is offline.
