The Bulk Reseller

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Transcript of The Bulk Reseller

  • 1. C HAP TE R 3 The Bulk Reseller I n the preceding chapter we examined one type of eBay business, the second-hand reseller, who resells used merchandise acquired at garage sales, flea markets, and similar places. Reselling lots of onesies and twosies can be profitable, but its certainly a labor-intensive model. Youre always on the search for something new to sell, and youre always re- inventing the wheel.Thats why many sellers prefer selling large quanti- ties of a single item to selling small quantities of multiple items. Instead of buying one shirt to resell, you buy 100 or 1,000 shirtsand thus sell 100 or 1,000 units of the same item. In many ways, this is a more efficient business model, as you can build your business around a single type of item. You can take one photograph and reuse it in hundreds of item listings, you have to stock only one type of box, and youll always know what your shipping costs will be. Being a bulk reseller might lack variety, but it makes up for that variety in consistency.

2. 38 Making a Living from Your eBay BusinessSelling in Bulk Means Buying in Bulk note Learn more aboutbuying closeout and liquidated merchandise in ChapterWhen you want to sell large quantities of14, Buying and Managing Youra single item, you have to buy large Inventory.quantities of a single item. This requiresbuying in bulk, so you can have enough inventory to last for several weeks ormonths worth of auctions.Where, pray tell, do you purchase bulk quantities of merchandise? There areplenty of options, if you know where to look.First, know that most bulk items offered are not first-run goods. Yes, most of itis new (not used) merchandise, but its often last years model, factory seconds,store returns, and the like. Thats why its available in bulk and at good prices;its leftover merchandise waiting for someone to take it off the suppliershands.This means that you want to shop for bulk merchandise at wholesalers whospecialize in closeout and liquidated items, or at thrift stores or dollar storesthat offer large lots of items for sale. You can find lots of these closeout suppli-ers on the Web, including (, My WebWholesaler (, and ( all these suppliers have in common is that they dont sell single items;everything they offer is in bulk quantities.A recent visit to the My Web Wholsaler site found such items as 100 units ofTommy Hilfiger clothing for $10.50 apiece ($1,050 total), 96 units of SeanJohn jeans for $19.70 a pair ($1,892 total), and 300 units of adult clothingfrom Macys and Bloomingdales for $6.75 apiece ($2,025 total). (Figures 3.1and 3.2 show some typical listings as well as detail about one of the lotsoffered.)As you can see, most of this bulk merchandise consists of brand-name itemsthat were ordered by a given department store but didnt sell; instead, thestore returned the items to the supplier. Instead of destroying the returnedmerchandise, the supplier offers it at fire sale prices in the liquidation market.The only catch, of course, is that you have to take a large quantity, and youhave no choice as to what exact items are included in the assortment.That said, you get what you get at really good prices. Its cheaper for the sup-plier to sell 1,000 of an item to a single buyer than it is to sell one each to1,000 buyers. So you buy your 100 or 1,000 units of a particular item (in vari-ous sizes and colors, of course) and obtain your inventory at literally penniesto the dollar. Your hope is that you can take this closeout merchandise andsell it for higher prices on eBayand thus profit handsomely. 3. CHAPTER 3The Bulk Reseller 39 FIGURE 3.1 Bulk items for sale at My Web Wholesaler. FIGURE 3.2 Sample mer- chandise from a typical depart- ment store assortment. The downside of buying in bulk is that you have to buy in bulk. Youre not just buying a dozen jeansyoure taking a dozen dozen, or more. Even if you get the merchandise extra-cheap, thats still a large check you have to write. And, even more challenging, you have to find someplace to store all that mer- chandise until you sell it. Thats if you can sell it, of course.Specializeor Vary Your Inventory? When you buy in bulk, you have some choices to make. Obviously, if you buy 1,000 pairs of baby shoes, youre going to be selling baby shoes for some time. But what do you do when your inventory runs out? Do you order more baby shoes or move onto something else? For that matter, do you sell baby shoes exclusively or order additional lots of some other type of merchandise to sell 4. 40 Making a Living from Your eBay Businesssimultaneously? In other words, do you specialize in one type of bulk item, ordo you vary your inventory?Specializing in a given type of item has appeal, in that you can tailor youroperation to that product category. Theres a downside, however; youre stuckif the category fizzles out. It may be better, in the long run, to move in andout of various types of merchandisebaby shoes this month, sunglasses thenext, DVD players the month after. Although, to be fair, every time youchange categories, youre essentially starting up a new type of business. Yourea shoe seller this month, a sunglasses merchant the next, and an electronicsretailer the month following.Even if you wanted to specialize in a specific category, that might not alwaysbe possible. Thats because youre limited to buying what bulk inventory isavailable at any given time. Yes, My Web Wholesaler might have a great dealon Tommy Hilfiger clothing this week, but when its gone, its gone. Go backto order more, and there probably wont be any left. Youre at the mercy ofwhatever closeout or liquidated merchandise is available at any given time.You may still be able to play within a general category (womens clothing, forexample), but you probably wont be able to specialize in a particular type orbrand.Running a Bulk Reseller BusinessLets say that this business model sounds good to you. Whats life like whenyou choose to be a bulk reseller? Making the BuyProbably the most important part of bulk reselling is making the initial prod-uct purchase. That means scouring the liquidation and closeout websites,looking for the best buys, and then ponying up to place an order. Some eBaysellers watch the sites for weeks on end, waiting for that one load of merchan-dise that has the best potential. You definitely shouldnt make a buy at thefirst site you visit. Shop around, like a serious consumer, and be savvy aboutwhat you finally buy.Of course, making the buy means writing a big checkor, more likely, mak-ing a big charge to your credit card. Most of these websites accept credit cardpayments, some accept checks (although business checks are more acceptedthan personal checks), and some will even let you open an account of credit,providing you meet their business requirements. In any case, youll probablybe laying out $1,000 or more in a single purchasewhich you wont get backuntil you sell all that merchandise. 5. CHAPTER 3 The Bulk Reseller 41When youre making your purchase, pay attention to shipping charges. Someliquidation sites offer free or discounted shipping for large orders, but mostdont. Youll definitely want to factor in the shipping to your orders total cost.And that shipping cost could be hefty, since youre receiving a lot of merchan-dise. Here, size makes a difference. A lot of 1,000 socks isnt that big a ship-ment, physically, while a lot of just 100 television sets can cost a ton to ship.Make sure you get an estimate of shipping costs up front, before you finalizethe order. Storing and Managing the InventoryAfter you place the order, you wait around for the merchandise to arrive. Thisis a good time to plan out exactly where youre going to store those 1,000 fry-ing pans or 100 electric motor scooters. Thats one of the challenges of buyingin bulkwarehousing in bulk. Move the car out of the garage, clean out thebasement, talk to Aunt Edna about taking over her spare room. You may evenneed to rent a storage bin or other warehouse space.Receiving the merchandise could also be a challenge. Depending on what youorder, you might be surprised to find a huge semi truck pull up outside yourfront door. The merchandise could be packed in multiple manageable boxes,or it could be loaded into a single large pallet. And that truck may or may nothave a lift in the backwhich means you could be faced with manhandling ahuge crate off a truck platform five feet off the ground. Avoid surprises byfinding out how the item will be shipped before you order.When you finally warehouse the inventory, youll need to do so in a way thatorganizes the individual items and makes it relatively easy to pick and packfrom the lot. You dont want to store everything in a huge stack. Put the size32 reds in one place, the size 34 blues in another, and so on. Then make amap or guide to all the bits and pieces of your inventory, so youll knowimmediately where to go when you get an order.Speaking of getting organized, youll also need to create some sort of inven-tory management system. Youll want to know at any given time how manysmall, medium, and large items you have, and in what colors. After all, youdont want to take an order for an item thatyouve sold out of. Managing your inven-tory can be as simple as creating a bigExcel spreadsheet, or as complex as writ- noteIf you want tempo- rary storage spaceat your own home, consider rent-ing your own database program. Manying a container from PODSeBayers strike a middle ground by using ( Different sizesan auction management tool that are available, and you need onlyincludes an inventory it for as long as you need it.However you do it, its important. 6. 42 Making a Living from Your eBay BusinessManaging the Auction ProcessOnce your inventory is stored and cata-noteLearn more about inventory manage-loged, its time to start sellin