Joining the hunt for inventory

Check your favorite product category and see what the top selling item is. Better yet, go to your favorite brick and mortar store and make friends with the manager. Store managers will often tell you what’s going to be the new hot item next month. After you’re armed with the information you need, search out that item for the lowest price you can, and then give it a shot on eBay.

Keep these shopping locales in mind when you go on the product hunt:

• Upscale department stores, trendy boutiques, outlet stores, or flagship designer stores are good places to do market research. Check out the newest items — and then head to the clearance area or outlet store and scrutinize the bargain racks for brand-name items.

• Discount club stores such as Sam’s Club and Costco made their mark by selling items in bulk to large families, clubs, and small businesses. In case you haven’t noticed, these stores have upscaled and sell just about anything you could want. And both Sam’s Club and Costco have websites: http://auctions.samsclub.com and www.costco.com.

  Just now I visited the Sam’s Club auction site, https://auctions.samsclub.com/auction/endingsoon/today/. I found a group of items that, when I searched prices on Google, were selling for way below the going price. Locking in items like this could be very profitable. (See Figure 2-1.)

  I made a quick jump to eBay and searched for the Fitbit HR (black, small) in sold items. Take a look at closing prices shown in Figure 2-2. This example represents a pretty sweet profit potential.

  In another book, I talked about a special on the Costco website, www.costco.com, for a new Snow White & the Seven Dwarfs DVD. For $18.49, you could pre-order the Snow White DVD and get a second Disney DVD for free. When there’s an offer like this, you can sell two items on eBay for the price of one. If I had followed my own advice — bought a case of this deal and held some for future sales — I’d be in the money today. It seems that Disney movies are released for a limited time only.

  Now, when checking the Costco site, I find these women’s Bodymagic skirts on sale for $14.99 (with free shipping). On eBay they were selling in multiple listings for as high as $34.99. Figures 2-3 and 2-4 show you how profit can be made. By looking at the completed listings, I could even see which colors and sizes netted the highest profit.

  Stores like Costco have a 90-day return policy. Keep track of your merchandise cycle and return when you need to.

• Dollar stores in your area. Many of the items these places carry are overruns (too many of something that didn’t sell), small runs (too little of something that the big guys weren’t interested in stocking), or out-of-date fad items that need a good home on eBay. I’ve found profitable books, Olympics memorabilia, and pop-culture items at this type of store.

  It’s not unusual for dollar-store warehouses to sell direct to a retailer (that’s you). Find out where the distribution warehouse is for your local dollar store chain and make contact. The 99¢ Only stores, for example, have a wholesale unit called Bargain Wholesale that runs out of their City of Commerce, California offices. Bargain Wholesale also has a website (see Figure 2-5) which is open to anyone with legitimate resale credentials.

• Thrift stores are packed with used — but often good-quality — items. And you can feel good knowing that the money you spend in a nonprofit thrift shop is going to a good cause. Some branches of Goodwill and the Salvation Army receive merchandise from a central warehouse. Ask the manager (whom you’ve befriended) when the truck regularly comes in.

  Goodwill Industries is definitely geared up for the 21st century. You can shop at its online auctions (see Figure 2-6) and get super values on the best of their merchandise. Don’t forget to check the going prices on eBay before you buy. Have fun at www.shopgoodwill.com.

• Garage, tag, moving, and estate sales offer some of the biggest bargains you’ll ever come across. If you watched the Netflix show, GirlBoss, you’ll see that the hero started her online business with this advice from my books. The stuff you find at estate sales is often of a higher quality. Keep an eye out for “moving to a smaller house” sales. These are usually people who have raised children, accumulated a houseful of stuff (collectibles? old toys? designer vintage clothes?), and want to shed it all so that they can move to a condo in Palm Springs.

  When an item is new but has some collectible potential, I suggest you buy in bulk, sell some of the item to repay your investment, and save the balance for later. This strategy has paid off for me a good many times with Disney films, Barbies, and Andy Warhol dinnerware.

• Liquidation and estate auctions are two types of auctions where you can pick up bargains. Before you go to any auction, double-check payment terms and find out whether you must bring cash or can pay by credit card. Also, before you bid on anything, find out the hammer fee, or buyer’s premium. These fees are a percentage that auction houses add to the winner’s bid; the buyer has the responsibility for paying these fees.

  When a company gets into financial trouble, its debtors (the people to whom the company owes money) obtain a court order to liquidate the company to pay the bills. The liquidated company then sells its stock, fixtures, and even real estate in a liquidation auction. Items sell for just cents on the dollar, and you can easily resell many of these items on eBay. Use Google or Bing and search auctioneers: liquidators. You can also contact local offices to get on mailing lists.

  Estate auctions are the higher level of estate garage sales. Here you can find fine art, antiques, paper ephemera, rare books, and collectibles of all kinds. These auctions are attended mostly by dealers, who know the local going prices for the items they bid on. But because they’re buying to sell in a retail environment, their high bids will generally be the wholesale price for your area. And local dealers are buying what’s hot to resell in your city — not what’s going to sell across the country. That entire market will probably be yours.

• Community newspaper auction listings are an excellent source of merchandise for resale, particularly the listings of liquidations and estate auctions in the classified section, which often has ads that announce local business liquidations. Do not confuse any of these with garage sales or flea-market sales (run by individuals and a great source for one-of-a kind items). Liquidation and estate sales are professionally run, usually by licensed liquidators or auctioneers, and involve merchandise that may be new but is always sold in lots (in a quantity) rather than one item at a time.

  If your local newspaper has a website, use its online search to view the classifieds for major liquidations, estate auctions, or other similar deals. Right there online, you can often find just what you’re looking for locally. I typed in a Google search for Newspaper classified Los Angeles. The Los Angeles Times (and other local papers) showed up. There was a link to garage sales in the Times listing. I clicked it and came to a wealth of sources shown in Figure 2-7.

• Going-out-of-business sales, some of which run week by week, with bigger discounts as time goes by. Don’t be shy about making an offer on a quantity of items.

  Going-out-of-business sales can be a bonanza, but be careful and don’t be misled. Many states require businesses that are putting on a going-out-of-business sale to purchase a special license that identifies the business as really going out of business. Some store ads may read “Going Out for Business” or some similar play on words, so you need to be sure that you’re going to the real thing.

• Flea markets or swap meets in your area may have some bargains you can take advantage of.
• Gift shops at museums, monuments, national parks, and theme parks can provide eBay inventory — but think about where to sell the items. Part of your selling success online is access. People who can’t get to Graceland may pay handsomely for an Elvis mini-guitar with the official logo on the box.

• Freebies are usually samples or promotion pieces that companies give away to introduce a new product, service, or, best of all, a media event. Hang on to these! If you receive handouts (lapel pins, pencils, pamphlets, books, interesting napkins, flashlights, towels, stuffed toys) from a sporting event, premiere, or historic event — or even a collectible freebie from a fast-food restaurant — they could be your ticket to some eBay sales. For example, when Return of the Jedi was re-released in 1997, the first 100 people to enter each theater got a Special Edition Luke Skywalker figure. These figures are still highly prized by collectors — and when the next part of the Star Wars saga was released, the prices on this figure went up yet again.

  When you go to the cosmetic counter and buy a way-too-expensive item, ask for tester-sized samples. Name-brand cosmetic and perfume samples of high-priced items sell well on eBay. Also, look for gift with purchase deals. If it’s a specialty item, you can usually sell it on its own to someone who’d like to try a sample, rather than plunge headlong into a large purchase. Less-special items can be grouped together as lots. Be sure to put the brand names in the title.

One of my mottoes is “Buy off-season, sell on-season.” You can get great bargains on winter merchandise in the heat of summer. January’s a great time to stock up on Christmas decorations, and the value of those trendy vintage aluminum trees doubles in November and December. Cashmere sweaters, too! In the winter, you can get great deals on closeout summer sports merchandise. It’s all in the timing.

Looking for resale items on eBay

Another place to find items to sell is on eBay itself. Look only for good-quality merchandise to resell. Remember that the only way to make a living on eBay is to sell quality items to happy customers so that they’ll come back and buy from you again.

Be sure to search eBay auction titles for the following:

• Keywords: wholesale, resale, resell, closeout, surplus
• Key phrases: case of, wholesale lots, case quantity, “lot of, “pallet of” (see Figure 2-8)

Also be sure you check out the wholesale categories on eBay. After noticing how many sellers were buying from other sellers, eBay set up wholesale subcategories for almost every type of item. You can find the wholesale items in most categories. Go to the eBay home page and click Shop by Category. Then click See All Categories at the bottom of the pop-up window that appears. Search the page for instances of Wholesale, then select the favorite category in which you sell, and find the Wholesale Lots subcategory. Just click that link to get to the deals. If you’re looking for the category featured in Figure 2-9, you can also go to www.ebay.com/b/Clothing-Shoes-Accessories-Wholesale-Lots/41964/bn_1852124.

Setting up to buy

Purchasing wholesale merchandise may require that you have your state’s resale license, which identifies you as being in the business. Be sure that you have one before you try to purchase merchandise directly from another business. Also, when you have a resale number and purchase merchandise from another business — known as a business-to-business (B2B) transaction — you probably won’t be charged sales tax when you purchase your stock because you’ll be paying sales tax when you sell the items. Go to Book 9, Chapter 1 to find out how to get that magic resale number.

When you have your resale number, you can go anywhere you want to buy merchandise. If you want to buy direct from a manufacturer, you can. Unfortunately, many manufacturers have a minimum order amount, which may be more than you want to spend (and you’d get more of a particular item than you’d ever want at once). To remedy that, see whether you can find independent retailers who buy in quantity — and who will (perhaps) let you in on some quantity buys with manufacturers. I often buy in with a couple of local shops when they purchase their orders.

To gain access to legitimate wholesale sources, you must be a licensed business in your city or county. You also usually have to have a resale permit and tax ID number from your state. (See Book 9, Chapter 1 for details.)

Finding merchandise locally

Always remember that the cost of shipping the merchandise to you adds a great deal of expense. The higher your expense, the lower your return may be. The more you buy locally to resell, the more profit you can make.

The first place most potential retailers go is to the local wholesale district. These are immediate merchandise sources, within driving distance of your home.

Regional merchandise marts

Your next stop — should you be lucky enough to live in a major metropolitan area — is to find out whether there’s a merchandise or fashion mart near you. These are giant complexes that hold as many as several thousand lines of merchandise in one area.

Merchandise marts are hubs for wholesale buyers, distributors, manufacturers, and independent sales representatives. They have showrooms within the property for manufacturers or their representatives to display their current merchandise. Under one roof, you may find both fashion and gift merchandise for your eBay business.

See Table 2-1 for a representative sprinkling of the many marts across the country. This is not a comprehensive list, just one to get your mind moving; I have a much more thorough list in the Tools area of my website www.coolebaytools.com. You can contact the individual marts for tenant lists and more information. If you’re a legitimate business, the marts will be more than happy to teach you the ropes and get you started.

When you go to each mart’s website, you’ll find hundreds of links to wholesale sources. Many marts also send you a directory of the manufacturers represented in the mart.

Wholesale trade shows

By checking out the links to the marts listed in Table 2-1, you’ll also end up with links to the thousands of wholesale trade shows that go on across the country each year. Trade shows are commonly held in convention centers, hotels, and local merchandise marts.

A super source for finding gift shows is the greatrep.com website, shown in Figure 2-10. Here you find a list of all the major gift shows — with clickable links to contact information for the show coordinators. For more on GreatRep.com, see the “Buying Online for Resale” section later in this chapter.

When visiting a show or a mart, view all merchandise before you place an order. Bring a notebook with you to make copious notes of items you find interesting and where you find them.

These trade shows are gargantuan bourses of hundreds of wholesale vendors all lined up and ready to take your orders. The vendors have samples of the merchandise in the lines they carry and are delighted to answer all your questions about their products, credit applications, and minimum orders. These shows are designed to move products to retailers like you!

Few trade shows are more exciting than the Consumer Electronics Show (CES), sponsored by the Consumer Electronics Association. If you buy breakthrough technologies to sell online, this show is a must! You’ll find the latest in everything high-tech, including digital imaging, electronic gaming, home electronics, car audio, home theater, and satellite systems. You’ll see what’s new — but more important, you’ll see what will be passé in a hurry — great merchandise to sell (in a timely way, of course) on eBay.

CES draws more than 100,000 buyers each year, and the vendors are there to sell their goods to you. Visit the CES website at http://www.ces.tech to get an idea of the excitement that the show generates.

See whether the item is selling on eBay before you make your purchase. Bring your tablet or laptop and conduct online research, either on the spot or later in the day for next-day purchases. Getting a good deal is one thing — selling it on eBay is another.

Craigslist

If you haven’t visited Craigslist in a while, you’re missing quite a bit. You’ll find anything and everything listed in the free local classifieds, and you never know when there will be something worthwhile to resell. This site is always worth at least a once-a-week visit (to find a local version near you, visit www.craigslist.org). Much of the stuff on the site is listed by people who are too afraid (or maybe just technophobic) to sell on eBay. Focus on your category of interest and go to town. I did exactly that and found the item shown in Figure 2-11, a Cartier Love bracelet selling for $150. This item sells on eBay for up to $3,000!

Before buying an item like the one pictured in Figure 2-11, definitely check the authenticity. Buyer beware — it’s most likely a fake.

B2B wholesale clearinghouses

Legitimate online sites for retailers are rare. Many of the business to business (B2B) merchants and wholesale directories reflect nothing but flea-market goods and highly marked-up drop-shipping items. Don’t be disappointed. That doesn’t mean you can’t find a deal on some great merchandise. The benefit of the Internet is that you have access to many sources. The challenge is to find the good, solid, reliable sources of information, like the following:

• MadeInUSA.com: One of the best ways to find an item to sell is to find that item in your everyday life. If you have the manufacturer’s name but no contact information, go to the company website at www.madeinusa.com (see Figure 2-12), which has a huge database of manufacturer contact info.
• GreatRep.com: At www.greatrep.com, you find a website directory (refer to Figure 2-10) where buyers (that’s you) can hook up with manufacturer’s representatives that carry lines of merchandise in the wholesale giftware, home furnishings, and furniture industries. It’s fantastic! After you register (and provide your state resale license), you have access to listings of thousands of manufacturers. In the listings you may find out how much they require for a minimum order, and you can also request a catalog.

Buying directly from online wholesalers

Following are a few sources that have some unusual merchandise. I’ve bought from almost all of them:

• Liquidation.com: If you like auctions (and I know you do), check out www.liquidation.com. This is a massive all-auction website that has incredible deals on all types of merchandise. One of the things that I love about this site is that most individual auctions provide a link to the manifest — a list of every piece of merchandise in the lot. If you click the View Manifest link at the top of the auction page, you see a piece-by-piece list of the items included in the lot you’re bidding on. Find more on buying liquidation merchandise in Book 4, Chapter 4.

  It’s best to buy from vendors closer to your geographic area because after you add the shipping fee, you might be paying too much for your lot. Liquidation.com can refine your searches to your location in the country, and it has a shipping calculator to help you know ahead of time how much your shipping may be.

• Oriental Trading Company: The Oriental Trading Company has been in business for a long time. I used to buy from their catalog for school and charity affairs. This site offers everything from crafts to costumes to party goods — and all priced perfectly for resale on eBay. Use your practiced eye (and completed search) to ferret out the unique items that will sell. Visit them at www.orientaltrading.com.
• Big Lots Wholesale: If you’re familiar with the Big Lots stores scattered around the country, you have an idea of what you can buy at www.biglotswholesale.com. A quick click to their website showed me that they were loaded with great deals on everything from health and beauty items to toys to lawn and garden tools. A seller’s tax ID number is required to get pricing on this site.