In 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 it's certainly a labor-intensive model. You're always on the search for something new to sell, and you're always re-inventing the wheel.
That's why many sellers prefer selling large quantities 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 you'll always know what your shipping costs will be. Being a bulk reseller might lack variety, but it makes up for that variety in consistency.
Selling in Bulk Means Buying in Bulk
When you want to sell large quantities of a single item, you have to buy large quantities of a single item. This requires buying in bulk, so you can have enough inventory to last for several weeks’ or months’ worth of auctions.
Where, pray tell, do you purchase bulk quantities of merchandise? There are plenty of options, if you know where to look.
First, know that most bulk items offered are not first-run goods. Yes, most of it is new (not used) merchandise, but it’s often last year’s model, factory seconds, store returns, and the like. That’s why it’s available in bulk and at good prices; it’s "leftover" merchandise waiting for someone to take it off the supplier’s hands.
This means that you want to shop for bulk merchandise at wholesalers who specialize in closeout and liquidated items, or at thrift stores or dollar stores that offer large lots of items for sale. You can find lots of these closeout suppliers on the Web, including Liquidation.com (http://www.liquidation.com), My Web Wholesaler (http://www.mywebwholesaler.com), and Surplus.net (http://www.surplus.net). What all these suppliers have in common is that they don’t 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 of Tommy Hilfiger clothing for $10.50 apiece ($1,050 total), 96 units of Sean John jeans for $19.70 a pair ($1,892 total), and 300 units of adult clothing from Macy’s and Bloomingdales for $6.75 apiece ($2,025 total). (Figures 3.1 and 3.2 show some typical listings as well as detail about one of the lots offered.)
As you can see, most of this bulk merchandise consists of brand-name items that were ordered by a given department store but didn’t sell; instead, the store returned the items to the supplier. Instead of destroying the returned merchandise, 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 you have no choice as to what exact items are included in the assortment.
That said, you get what you get at really good prices. It’s cheaper for the supplier to sell 1,000 of an item to a single buyer than it is to sell one each to 1,000 buyers. So you buy your 100 or 1,000 units of a particular item (in various sizes and colors, of course) and obtain your inventory at literally pennies to the dollar. Your hope is that you can take this closeout merchandise and sell it for higher prices on eBay—and thus profit handsomely.
Figure 3.1 Bulk items for sale at My Web Wholesaler.
Figure 3.2 Sample merchandise from a typical department store assortment.
The downside of buying in bulk is that you have to buy in bulk. You’re not just buying a dozen jeans—you’re taking a dozen dozen, or more. Even if you get the merchandise extra-cheap, that’s still a large check you have to write. And, even more challenging, you have to find someplace to store all that merchandise until you sell it. That’s if you can sell it, of course.