Best Practices for eBay Inventory Sourcing
In preparation for selling items on eBay, the first step is finding inventory that you can source for a lower price than you can sell them for. The most essential part of the process is having access to the right suppliers. Your partnership with them can help ensure you keep bringing in money while your items sell quickly.
The basic idea behind eBay inventory sourcing is that you locate sources that can provide products in categories that sell quickly. While it’s possible to choose a niche market, beginners selling on eBay often do better choosing a tried and true category that is proven to offer the ability to turn a profit. eBay acts as a retail reseller so becoming profitable often relies on finding several high-quality products that you can list regularly.
Steps Involved in eBay Inventory Sourcing
It can be tempting to jump into eBay with both feet without doing any research, but it isn’t the best idea. Strategic product research and sourcing will go a long way toward creating a successful eBay business. It can help you optimize your operations, increase your profits, and come out on top of the competitors on the website.
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Making Profit
As someone who sells on eBay, your main priority is having products that people buy. This means that you need to be selling the products that eBay customers are looking for. When you source in-demand items (or items that will become in demand soon), you’ll have an easy way to create customer interest in your products. This provides you with an audience that you can target in your eBay selling efforts.
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Increasing Profit
Unfortunately, even if there is a demand for a product you sourced, that doesn’t always mean you will make a profit. High shipping costs, low margins, and fading trends can all contribute to an overstocked storage space and a bank account that isn’t growing in size. When you research potential products and how much profit they can reliably create, you make a sound business decision instead of relying on emotion.
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Considering the Competition
When you go through the product sourcing process for items to sell on eBay, you also have the chance to learn more about how much competition you are up against. While seeing no competition might initially seem like a good thing since it could indicate a gap in the market, it can also suggest that a product doesn’t sell even when listed. On the other hand, large amounts of competition might mean there is a large demand for an item or that it’s nearly impossible to target the consumers who desire the product.
4
Operations Optimization
Research done in the early stages of creating an eBay business is an important part of optimizing and planning your path ahead. This is the time to consider all of the essential aspects of selling on eBay, including how much space you need for storage, how easily the product can be sourced, how much it costs to ship to customers, and what kind of packaging you will need.
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Common eBay Product Sourcing Options
There are dozens of options on where to source the products you sell on eBay, but some are more common than others. Sellers who are new to business on eBay will often want to choose one of the proven sources to start. It’s always possible to branch out in new directions in the future. Below are a few of the ways you can begin sourcing your inventory for eBay.
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Retail Arbitrage
Sellers who want a simple sourcing solution often find success with retail arbitrage. This is a process where you buy items at a discount in brick-and-mortar or online stores and then list them on eBay to make a profit. This is a low-risk option for making money on eBay. Doing well with arbitrage typically involves selecting a niche of products, particularly if you already know a great deal about them. This type of sourcing can be done at various retail locations including discount stores, consignment events, secondhand stores, and traditional retail establishments. Make sure you save all of your receipts to prove where the items were purchased in case a manufacturer claims you didn't purchase the products through an authorized source.
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Dropshipping
For eBay sellers who have little storage space, dropshipping is a method of sourcing products without finding room for it. It is an easy way to get started and requires minimal operating costs. The process of dropshipping involves finding a supplier in a product niche and listing their items on eBay. When a customer makes a purchase, you alert the seller and pay for the item. The supplier is then tasked with using a shipping company to send the product out to your customer.
In addition to needing less space, this method means sellers don’t need to pay for items until a customer orders them. However, you will make less profit since you work with a third-party supplier. Shipping isn’t something involved on your end, but returns and customer service are your responsibility. If you choose this method, make sure you select a legitimate supplier.
Also, options exist to automate dropshipping. When a buyer on eBay purchases your product, the order can be routed directly to a dropshipper and the tracking information can be automatically sent back to the channel after shipment.
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Wholesale
Sellers who have lots of space and can manage many items can source products to sell on eBay from a wholesale manufacturer. A wholesaler is someone who has purchased a huge number of products at a discount price from the company that manufactured the items.
Here’s an example: A seller wants to sell packs of sports cards that sell for $5 retail. Without a wholesaler, negotiation with the manufacturer might bring the price down to around $4 per card pack. However, a wholesaler might have hundreds of thousands of card packs and sell them at $2.50 a pack, which gives you a much higher profit.
There’s no guarantee that the items you purchase will sell, but if you did your product research, you have a good idea about whether or not they will. When choosing wholesale for eBay inventory, it’s important to be sure the products are of great quality, because that can vary.
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Private and White Label
White labeling is when a company sells a generic product to a specific brand that labels the item with its own name. Many store brands utilize white-label items from the top manufacturers and can sell them for a less expensive price than their brand products. eBay sellers can do the same thing on this platform with a bit of work.
Private labeling is similar but instead of buying generic items from a manufacturer, you work directly with a manufacturer to build a generic product specifically made for your brand.
There are many options for eBay inventory sourcing and it’s an important first step to get products in your sales funnel. The proper research can gain you a supplier or offer information on the best sources for items you want to sell. Once you have sourced inventory, you can move on to learning about eBay inventory storage.
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