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Everything you need to "go legit" on ebay. Right Here.

Discussion in 'Ebay' started by hitch, Oct 18, 2011.

  1. hitch

    hitch Regular Member

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    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.:whoo:
     
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    Last edited: Oct 18, 2011
  2. Juliette

    Juliette Newbie

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    Great info....thanks!

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

    PitchBlack* Junior Member

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    Very Informative. I am definitely going to change the way i sell now. Ive put up way to long with the paranoia of getting caught selling repilcas. I appreciate you posting supplier websites, this is going to give me a great head start.

    +repped
     
  4. sciter

    sciter Junior Member

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    This, my dear sir, is a very good thread. Read it quickly, going to read it more thorougly tommorow. I am busy today.
     
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  5. bluenose10

    bluenose10 Junior Member

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    Me also banned from eBay ,papal account frozen will read the thread again and follow your advice many thanks.
     
  6. KlaAz0r

    KlaAz0r BANNED BANNED

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

    saxgod Regular Member

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    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.
     
  8. hitch

    hitch Regular Member

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    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.
     
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  9. hitch

    hitch Regular Member

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    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 :D

    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.
     
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    Last edited: Oct 18, 2011
  10. rhino2020

    rhino2020 Junior Member

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    Great Information. Thanks For Sharing.
     
  11. nam6641

    nam6641 Supreme Member

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    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?
     
  12. hitch

    hitch Regular Member

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    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.
     
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  13. rhino2020

    rhino2020 Junior Member

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    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.
     
  14. hitch

    hitch Regular Member

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    I hope you can and stick with it :D
     
  15. babypowder

    babypowder Regular Member

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    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.
     
  16. digibing

    digibing Junior Member

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    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.
     
    Last edited: Oct 19, 2011
  17. hitch

    hitch Regular Member

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    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:D

    "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 :)
     
    Last edited: Oct 19, 2011
  18. hitch

    hitch Regular Member

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    double post :(
     
  19. rhino2020

    rhino2020 Junior Member

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    anyone used urbanclothingwholesaler.com ?
     
  20. babypowder

    babypowder Regular Member

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