So I've been on this board for a while, I initially came here to learn about IM, and what not. I may not be able to give useful advice there as my IM income is a small fraction of my ebay income. But I would like to give back. I see a lot of people going down a road that is not sustainable in the ebay world, I would like to give some useful information that may be able to help send them down a different path to building long term sustainable income.


Background:
I am a 28yo dude, who sold my first item on ebay in 2001, I fell in love then. In 2003 I found out about alibaba and ioffer. Between 2003 and 2006 I did the same thing many of you are doing.. sold bootlegs, got shut down, created new accounts, sold more, got search and desist letters, got items seized, got shut down, started new accounts, sold more stuff , got shut down and made some money. I began to hate it and new there was a better way. In 2005, I went to a trade show in North Carolina wherelearned all about liquidations and wholesales. He turned into my mentor and in late 2006 my ebay business really took off. I was selling aftermarket performance items such as cold air intakes, shocks, mufflers, all that ricer crap which I no longer sell. I have not sold boot legs since 2006 and I don't plan on selling them ever again. There is more sustainable and greater income to be made in the world of liquidations and close outs and online. Plus the older I get, I'm not interested in taking the risks associated.

I know a fair share about ebay and selling, am I an expert? I wouldn't say that but I have encounters a lot of different things and I know how to go from not making a penny online to making a decent amount.

Before proceeding.

1) Getting in this business will take some Money. Take the millions you have earned bootlegging and go this route, often times the margins can be very close or better and you won't be paranoid all of the time.

2) Some companies requre that you have a wholesaler license, a business licensee or a EIN number at the minimum which is easy to get. Google SS-4 form, goto the IRS's website and apply for one, you can get one the same day.

Terminology
Buy Backs
A manufacturer sells 10,000,000 widgets to walmart during holiday season for $4 per item. Cost of goods sold (including both fixed and variable expeses is $2). ($2 profit per item using these number just as examples) The manufacturer makes $20,000,000 on this deal. Walmart sells 8,000,000 during the season however the agreement states that whatever they do not sell, the manufacture will "buy back" the items not sold so the manufacture buys back 2,000,000 items. Or $4,000,000 worth of goods. Did they lose money? No. They made a net of $16,000,000. But now they have 2,000,000 items that they don't want. These get sent to liquidation houses or sold abroad to other countries at MUCH lower prices then the cost to produce. Why? Because they write it off, and they can no longer sell them at even the wholesale price. This is how dollar stores are able to sell toys and trinkets for a dollar. This same $2 will likely be worth about 20cents in the liquidation market.
Closed Out
Closed out items are pretty simple, it's just last years models. The manufacturer or retailer needs to make room for new items to sell so they send all the old stuff they couldn't sell at "clearance" prices to liquidation houses.
Returns
Some companies are good at differentiating items that are marked as damaged goods, others are not. A risk you can take when buying returns is to get something that simply doesn't work. Buying apparel related returns is a little bit safer, for obvious reasons.
Liquidation
If a warehouse or manufacture is having a liquidation sale, this is essentially the same as a close out. They just need to get rid of items to make room for new inventory.
Liquidation House
These are warehouses that store other companies liquidated items and sell them to wholesalers. A company like Macy's or BestBuy will often have exclusive contracts to 1 housing company. Sometimes, the housing is done in house as well.
Overstock
Overstock items can fall into basically all of the above, sometimes they are buy backs, sometimes they are closeouts, sometimes they are returns.


Popular Liquidation Sites: (Take out the XXX from http

hXXX://closeoutcentral.com/
This is one of my favorite sites to find some decent closed out inventory to sell.

hXXp://www.wholesalecentral.com/
This site is like close out central but for wholesale.

hXXp://www.liquidation.com/
This site is pretty popular, and one of the first places people land. I have never bought anything here, but it's a good resource.

hXXp://theimasd.com/


Lesser known sites, but sites I have used to purchase inventory:
These sites sometimes have just random crap, but occasionally you will find some solid inventory to sell. For the sakes of time I'm not going to leave a description with these sites, just check them out.

hXXp://www.sav-on-closeouts.com/
hXXp://rodenimports.com/
hXXp://merchandiseusa.com/
hXXp://www.hjcloseouts.com/
hXXp://1dwi.com/
hXXp://countryside.myshopify.com/
hXXp://www.amlinc.com/

So now you're probably saying. Okay, this is good information. But where do those powersellers get name brand designer goods for CHEAP! Guess what, some of the people who you think are selling bootlegs are really selling origionals and they have presented documentation to the VeRO owner to let them continue selling.

The following sites are where they get their stuff:

hxxp://www.bstockauction.com/
This is one of the best sites, they do Macy's and Bloomingdales. I have got a ton of great stuff from this site. You have to be a business to deal here.

hxxp://bstockdvds.com/
Ever wonder how people sell DVD's for 2 bucks and still make profit? You can get DVD's with cases for as little as 2.5cents each, and I'm not joking. I know a local guy who only sells DVD's at flea markets and makes a TON of money. Hell, you can bring DVD's to pawn shops and get a dollar for them!! Granted, you'll have to buy a shit load but it's worth it. This place you can get closed out DVD's from netflix. The site has changed a little in the past year, they have a lot of other good name brand items.

hxxp://midamliq.com/
This is a mid western liquidation house for Costco.

JCPenny's

hxxps://vendor.jcpenney.com/wps/portal/Liquidation


Walmart
hxxp://jacobstrading.com/index.html
This company is a huge liquidation house, it's pretty popular. I've bought a number pf pallets from them in the past. The stuff was decent. They have several terminals across the US.

Bestbuy:
I have never purchased electronics from liquidation houses. I've heard stories about people getting stuck with only broken crap. This is usually the first place newbies go.. just like on ebay, everyone wants to sell consumer electronics. And for that very reason, the margins are not as good.

hxxp://techliquidators.com/index.cfm

Other Consumer Goods (Name brand)
hxxp://gencomarketplace.com
I've purchased a lot from these guys, they have a lot of good deals, and good items to add to your inventory. You bid on pallet or truckload.

Cosmetics:
Note: High end cosmetics, such as MAC , Dior, Chanel, etx will NOT allow their cosmetics into the secondary market. They don't need hoards of people selling goods at 80% of value. So to protect their brand they have all official retailers send their goods back to them. However, you can still get some lower to mid range cosmetics:

hxxp://www.viatrading.com/

They also have other stuff, but that's the only place I've found that has cosmetics. My Wife wanted to start selling MAC stuff, but after a long hard search i found out that will be impossible unless you sell black market junk which is no longer in my business model.

Now What?
Ok, so now that you know what liquidations are and you have websites now what do you do?

1) Sell on eBay (sell bulk lots to move stuff faster)
2) Sell on Craigslist
3) Sell at Garage Sales
4) Sell to pawnshops (in the case of the DVD's lol)
5) If you're really eager start a drop ship business!
6) Get creative.

If you play your cards right, you can literally go from spending 5k on your first set of pallets storing in your garage to housing them in a warehouse within a years time.

I know this is black hat work , and people are looking for "black hat ways" to make money, but the fact of the matter is, when it comes to eBay and retailing there are a ton of ways to make money besides selling crappy CHI Flat irons from China.

I hope this posts helps to inspire at least one person to go this route! Once I went legit, a felt so much better about myself, and a whole lot less paranoid all of the time.

I hope you the best, and use this information wisely! Maybe over the next coming weeks I may post some useful methods that I used or still use.


Handling PMs
First off, thanks everyone who has sent in PM's thanking me for this info. I really do appreciate it, and it inspires me to dig deep about things I don't really thanking about but information that other's could use. However, if you have a specific question, I would prefer if you ask here. That way other people can benefit from your question and my answer (if I can answer it!) as well.

Great info....thanks!

You've listed a few sites I haven't used before....I'll give them a try.

This, my dear sir, is a very good thread. Read it quickly, going to read it more thorougly tommorow. I am busy today.

Me also banned from eBay ,papal account frozen will read the thread again and follow your advice many thanks.

I was never really active on ebay, but +1 for this post!

Thx. Ofcourse I'm not in the USA so i cannot work with those houses, but I get the idea and will google for local houses.
Do you also get items at bankrupty auctions ? I know a few sites that do auctions and you can get stuff cheap there too, but it depends on how much other people bid etc.

eBay is a great place to earn a dime. So much money turns over on ebay it's crazy.

If you run your business smart, you can really get big in a short amount of time. You can outsource just about every aspect of the business and scale it up, and I'm not talking about by using some third party drop shipping company.

A lot of people think they need to be super hands on with there items, etc. I have not physically seen or touched any of my items since march of this year. I have well over 2000pcs of inventory at a warehouse that is managing all of my fulfillment.

I have a VA handling all of my Customer service. Now, the only thing I do is scan terapeak to find new niches, deal with suppliers and manage the global logistics associated with international freights. Before, if I traveled I had to stop my operation or take my inventory with me..which really sucks.

But now, I'm able to be any where in the world, literally, and still manage my business. In august I went to Jamaica for 2 weeks, and a member here informed me about Logmein , which is what I used to still manage portions of my business. It's essentially passive income for me now.

eBay has provided a means for me to do so much, I can go on and on as I am just exciting thinking about it. Thats why I want to encourage other people who already know the ins and outs of ebay to try to turn their business into one that they can be proud of.

Originally Posted by saxgod

Thx. Ofcourse I'm not in the USA so i cannot work with those houses, but I get the idea and will google for local houses.
Do you also get items at bankrupty auctions ? I know a few sites that do auctions and you can get stuff cheap there too, but it depends on how much other people bid etc.

I have not gone to any bankruptcy auctions, or storage auctions. Mainly because it's a little bit more involved. Some people like that sort of thing. I prefer just to have a truck pull upto a loading dock, get packed with my items then shipped directly to my warehouse.. the less hands on i have to do the better

However, at any auction, you're destined to find some sweet deals.. however you need to get A LOT of inventory to make money, not just 1 and 2 items here and there.

Another thing that I do:

You can call up local manufactures in a niche like "toys" and tell them that you are a liquidation company , you help companies move distressed inventory. Ask them if they have any that they would like help moving. Out of 100 calls, I usually can get about 3 or 4 companies looking to sell goods at STEEP DISCOUNTS. But you can't usually buy 10 items. OFten you have to buy a lot ranging from $10k worth upto 1,000,000 pieces of items.. I shoot for the deals that I know I can move quickly, or sell to another liquidation broker for a few cents more then i paid. A few cents on 50,000 pcs can be a decent commission...

I recently had a warehouse sell me 56pcs of 8' pool tables for $23 each, retail is $249.00. I had them shipped directly to my warehouse. I'm saving them for this holiday season

You can gets lists from Manta.com, or hoovers. I like hoovers and have a yearly membership.

Great Information. Thanks For Sharing.

What is your average return on a pallet? i.e. You spend $1,500 on a pallet and after you sell it all and after ebay fees, etc... you collect $XXXX?

Originally Posted by nam6641

What is your average return on a pallet? i.e. You spend $1,500 on a pallet and after you sell it all and after ebay fees, etc... you collect $XXXX?

There are a lot of factors that play into this. Specifically the type of merch.

Typically, on a per pallet base, I like to see 30%-50%. Anything more is concidered a big win, anything less is, okay.

Electronics you'll see less for a variety of reasons one because they are expensive to ship (the weight and shipping materials required) and secondly because everyone and their mom is trying to sell consumer electronics.

I DO* however like to import BIG HEAVY items from China that I can get made for pretty cheap. Why? Because nobody else wants to import them, they prefer small little things that's easy to ship. So I can have higher margins on those sorts of goods.

Infact, as we speak I should be wiring money to china for XXXXX. This item is a "Heavy Item" I ordered 100pcs, after freight the cost is $87. I have not got them yet, customs feed and clearance will be another $1000 or so so that brings the goods upto $97. It will cost about $20 to ship to the end user, so that is $117. I can sell these items all day long on ebay for $199+ and all day long on CL for $300-350.

That's the different between heavy items and small items..

Sorry, I went on a rant. But to answer you question about pallets, typically you want to see around %30. If you buy for $1000, you profit $300.

Well hitch has inspired me to quit the replica game. I will bleed out my replicas slowly and use that money to go legit from then on.

I hope you can and stick with it

Yes, please. EVERYONE leave replica business. There is no money in it -- too risky Also, not having to ever touch the product is nice, but outsourcing too much cuts into your profit. Using overseas VA at 2$/hr helps though . Also, Log Me In Ignition is the best, used to use Orb or something like that back in the day before it. Glad to see you got everything going well. Doesn't take much really. Just need to find a niche, and understand that 30% ROI in the three weeks it takes to liquidate it is way better than many investments available. Won't all get 7-1+ returns like you would with reps.

Good post overall, glad to see you doing well.

Thanks OP for some good info. Just like somebody else is, I am also in Europe. This means that most of this stuff, despite the low US dollar, is just not realistic to bring over. Anybody have any decent European sources for wholesale goods?

So as not to appear as a guy that takes and do not give, here is one of my fav sources: sturm-miltec.de . These guys can fix you up with military surplus by bulk. Actually visited their warehouse once. An old East-German sugar factory right next to a river. When the old eastern European armies stood down, these guys bought all their stuff and had it brought over by boat. So if you ever need army stuff, ranging from Makarov holsters to mobile field kitchens, this is the place to go.

Originally Posted by babypowder

Also, not having to ever touch the product is nice, but outsourcing too much cuts into your profit. Using overseas VA at 2$/hr helps though .

It depends on who you look at this, cutting into your profit. If you want to do everything yourself, you will limit your time, and the amount you can do. If you outsource, you can spend more time sourcing more products shipping more items out to the end user. 1 Person can not ship the same volume of items as 2 people, 3 people or an entire automated warehouse.

Yes, your profit per item decreases, but your volumes increase thus you make more money

"I'd rather have one percent of the efforts of 100 people than 100 percent of my own efforts." - J Paul Geddy

I agree, VA's are great. I'm using one for another business as we speak

double post

anyone used urbanclothingwholesaler.com ?

Originally Posted by rhino2020

Well hitch has inspired me to quit the replica game. I will bleed out my replicas slowly and use that money to go legit from then on.

Originally Posted by rhino2020

anyone used urbanclothingwholesaler.com ?

does not compute, lol. never used them though so no imput on them. good luck either way.

I figured out they was reps after I did some more browsing. I tried that bstock website for dvds and there s hardly anything on there.

Originally Posted by rhino2020

I figured out they was reps after I did some more browsing. I tried that bstock website for dvds and there s hardly anything on there.

You have to understand that companies don't always liquidate on a daily basis. Usually it's quarterly or seasonal, especially apparel.

And Netflix is not going to liquidate items all the time, otherwise they would have no stock!

Wow man...serious stuff. Thanks a bunch! I started selling on ebay 1 month ago and made just $400 and almost gave up...Now I read this and know where to go from now...If I ever make it big on ebay, I'll owe you!

so what kind of $$ numbers are you upto?

Thx

I'll give it a week:

Well hitch has inspired me to quit the replica game. I will bleed out my replicas slowly and use that money to go legit from then on.

Solid information. Thanks for your input!

Great post, thanks for sharing!

Originally Posted by stressfree

so what kind of $$ numbers are you upto?

Thx

I'm not one to brag, however I will say that my lifestyle is completely free. I'm able to do what I want when I want.

I decided to go back to school, I'm currently working on my MBA. It's something I have always wanted to do. The total cost of the MBA program is around $80k , however thanks to eBay I don't have to worry about taking out student loans.

I've travelled around the world, I have a ton of high end RC planes, I own a number of cars, I own a house in florida and a house in NC, i got married this summer, had a rolls royce and some other crazy stuff, people always tell me it was the best wedding they've been to.

Again, I'm not saying this to brag, I'm just letting you know that it is possible to make A LOT of money. In short, I have already cleared a 6 figure income for this year.

I made an ebay course that i never released to the public, only to a private list, i was going to release it but got busy with school and another start up business..

But here is the promotional video:
http://www.youtube.com/watch?v=4iRFJ5mHvS4And keep in mind

oh no....was this the sole purpose of this thread to sell your course? LOL

Nope.

If you notice, the course was made almost a year ago. I honestly don't have too much interest and time in "selling the course" that's why it's been sitting around.

You will not see it being sold anytime soon.

Hello Hitch, You hit a bulls eye with this post. I have been there, I almost got banned for life, so I left it alone. You give me hope again, to do it the right way. I thought I was the only one, Ebay called me notorious, I would love to go back legit. Thank You...

any site that looks like it was built in 1992 doesnt look legit to me, lol. Plus im probably on ebays most wanted list anyway

^^ Then you'll miss out on a lot of money. The fact of the matter is, most of these liquidators have more then enough offline contacts not to have to worry about online people bugging them about deals.. And frankly, a lot of the guys are an older crowd who don't like the internet.. they'd much rather a phone call from someone.

It's just the nature of the business. I agree though, a lot of the sites look sketchy.. but just do your research, the site might look sketchy but it's been around for years lol unlike these guru IMers who have awesome sites which are only registered for 1 year

do you import from china or completely wholesale from the USA?

Is Terapeak a must for ebay?

Thanks for the resources hitch. Got any old copies of the course laying around?

Originally Posted by Dresden14

any site that looks like it was built in 1992 doesnt look legit to me, lol. Plus im probably on ebays most wanted list anyway

Yeah, a lot of them are dated looking. You could probably start a whole business marketing web design to these types of businesses.

Originally Posted by stressfree

do you import from china or completely wholesale from the USA?

Is Terapeak a must for ebay?

First off: YES, you MUST have terapeak if you wan to be successful, it's so easy to find profitable markets. Maybe I'll make an exclusive video on how you can use terapeak.

I do both, these days, a majority of my sales come from China. Why because I can order in huge lots, customized items for cheap.

Buying from liquidated sources is a GREAT way to make money, but sometimes it can be kinda random and you will always be making new listings..i hate that part about it.

With importing, i just import the same items over and over and over again, one of my ninches i've been using the same listing for almost 2 years now lol

You can say "just pay someone to make the listing for you" , but if you are buying in huge lots of liquidated random items you'll have to have several people doing it, and you can't outsource this to china. Why? Because they have to be at or near the goods, so they can go through everything, categorize it, pictures, and make the listings.

I'm not saying this to discourage anyone from selling liquidated lots, you can still get good deals, and sometimes items are worth it.. in the case of the pool tables example i gave above.

However, for my business model I like to import items by the container load, at least a 20ft container at minimum. By doing that your fixed cost are reduced.

This is great information, but if you had accounts suspended, how did you get back on "legit"? Ive played the ebay stealth game after having several accts suspended but its a hassle to have 10 different accounts and keep volume low on each to stay under the radar

Originally Posted by scarlisa

This is great information, but if you had accounts suspended, how did you get back on "legit"? Ive played the ebay stealth game after having several accts suspended but its a hassle to have 10 different accounts and keep volume low on each to stay under the radar

So fortunatley I started going legit before ebay got very strict on their seller rules. And I was able to build up several accounts, to where now they don't care about. It's funny though, most of my ebay accounts are stealth accounts. In 2003 I (stupidly) ID Verified an account, needless to say that account is suspended indefinitely. Since my SSN is linked to that account I had to make stealth accounts.

Now I have several great standing accounts. I can make a stealth account and just link it to one of my good standing account which are top rated powersellers and BAM the new stealth account has unlimied listings. However, if I list in a category such as consumer electornics, funds may get held for seveal days.. but I rarely list in consumer electronics, just not my thing. Only if I'm trying to sell a personal item, but usually i'll just list that on CL.

For paypal, my SSN is linked to a paypal account that in 2005 had a negative $3k balance. I sold a bunch of stuff, and the supplier didn't send me all of my items. I so people requested their money back leaving my PP account with a negative balance. Paypal sent that to collections NCO Financials, the odd thing was it never appeared on my credit report, needless to say that never got paid.

NOW for paypal, I use my Dad's SSN (he is aware) this year it will be strange as now paypal is going to send him a tax form claiming the amount i maid. I file a schedule C (self employed) every year, so this will be interesting, paypal is telling the IRS my dad is making the money, yet I am claiming it.. seems like a quick way to get audited.. but if I do, I have all the documents to prove it so I'm not entirely worried about it.


Anyway, in short I started making accounts prior to these crazy rules and limitations on new sellers. In today's world, it will take a little longer.

so what do oyu make profit? $100k or $999,000?

I'd be hoping for $250k+ as $100k isn't that impressive.

But good information. And as Rhino is facing "cell tossig time " LOL I am thinking everyone is dumping replicas right now..

What I'd like to know from those who are into buying lots of stock for thousands of dollars at a time is how did you get the start up capital? Grind it out from small sales volumes until you had the dosh to play with the big boys?

Originally Posted by stressfree

I'd be hoping for $250k+ as $100k isn't that impressive.

I'm impressed by people who make a sustainable $60k from home with a cool system.. life is not always about how much money you make. My income won't affect you, so by you knowing how much I make is irrelevant. Don't focus on the how much , focus on the how to.

Originally Posted by Biggles

What I'd like to know from those who are into buying lots of stock for thousands of dollars at a time is how did you get the start up capital? Grind it out from small sales volumes until you had the dosh to play with the big boys?

Once you have a solid* business plan, you can get a personal loan.. check out prosper.com

I would not suggest getting a loan until you have a good plan of action.

I also used other methods to build my bank roll.. I'll share them shortly

I'm so thankful of coming here on your thread. I was actually searching for some "refresher" ebay business course.

+1 rep for the valuable information you shared plus the tips! I'm following this thread.

Originally Posted by hitch

NOW for paypal, I use my Dad's SSN (he is aware) this year it will be strange as now paypal is going to send him a tax form claiming the amount i maid. I file a schedule C (self employed) every year, so this will be interesting, paypal is telling the IRS my dad is making the money, yet I am claiming it.. seems like a quick way to get audited.. but if I do, I have all the documents to prove it so I'm not entirely worried about it.

Thanks for the great info as far as taxes what about setting up an LLC, I have 2 LLC's and use the TIN number instead of a Social both have separate P.O. Box addresses and phone numbers.

Just a thought

The issue is paypal is going to send my dad a form stating that they are going to claim X amount, my dad did not make the money.. it just happens to be his paypal. My EIN is going to be filing the schedule C.

I'll probably just have to ask a tax attorney to see what they say.

Originally Posted by hitch

The issue is paypal is going to send my dad a form stating that they are going to claim X amount, my dad did not make the money.. it just happens to be his paypal. My EIN is going to be filing the schedule C.

I'll probably just have to ask a tax attorney to see what they say.

it'd probably be easiest to turn your entity into a partnership (with your dad), you both file schedule Ks where the disbursement is wholly to you. I'm not sure it's a weird situation. Speak with your accountant, plenty of ways around double taxation and legal filings. There are literally 10 different ways to do it, just all depends on your current tax liability with other entities.