In This Chapter
Prowling pound shops and cruising car boot sales
Researching going-out-of-business sales, auctions, and resale shops
Finding freebies and selling salvage
Selling by consignment
You’re probably wondering just how you can possibly get enough merchandise to list as many as twenty items a day. But you’re going to have to if you want to keep up with top eBay.co.uk PowerSellers! Maybe you’re thinking that there aren’t possibly enough sources out there to fulfil that kind of volume? Success on eBay isn’t easy. Many hours and a good deal of perspiration – along with loads of inspiration – are necessary to make a good living selling online. You can see your profits soar – if you apply the same amount of effort in acquiring merchandise.
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, cashmere jumpers, too! In the winter, you can get great deals on end-of-line summer sports merchandise. Using this stocking-up tactic is all in the timing.
How are you going to acquire the products you need? We’ve spent hours, days, weeks, okay, even months trying to work out the best ways to stock an eBay.co.uk business. Ultimately, your stocking strategy depends on you, your personality, and the type of merchandise you plan to sell. We’ve tried many of the tactics that we discuss in this chapter, as have other eBay sellerswe know, so here we pass on all the secrets and caveats that each of us discovered along the way.
Sourcing on a Budget
Pound shops come in all shapes and sizes. These places can be filled with tat or treasure, and a practised eye is needed to separate the wheat from the chaff. Try going in to a pound shop with a teenager, and see whether he or she reacts to any of the items for sale. Sometimes only one in five visits works out, but you’ll know when you see the item – and at these prices you can afford to buy loads! Stock at these shops doesn’t stay on the shelf for long; if you pass on an item, it may not be there when you return for it the next day. Maybe another savvy eBay.co.uk seller grabbed the bargain.
Poundstretcher
Probably the most successful ‘budget business’ is Poundstretcher. These shops are now common sights on high streets up and down the country and fly in the face of the theory that people nowadays have more sophisticated tastes and are only interested in branded products. Go to www.poundstretcher. co.uk to find your nearest outlet.
The bulk of the items sold at pound shops are closeouts or special opportunity buys. When a company changes its labels, for example, it might sell all remaining stock with the old labels to pound shops. We’ve found some profitable topics, Olympics memorabilia, and pop culture items at shops like these. The market for budget goods is expanding rapidly, so keep your eyes open for a pound shop opening near you. Otherwise, pull out the phone topic (or bother the 118 operators) and see what you can find.
Pound shop warehouses can sell direct to a retailer (that’s you!). Find out where the distribution warehouse is for your local pound shop chain and make contact. Being nice can go a long way here. Befriend the office or warehouse manager, who may then call you when merchandise that matches your speciality comes in.
The Trader
The Trader is a UK magazine that essentially lists every type of wholesale business you can think of. The Trader provides you with phone numbers and Web sites so you can check out stock or topic a visit. Going straight to a wholesaler may seem daunting, but some allow you to buy small amounts of stock early on – especially if they think you’ll come back again.
Many wholesalers listed in The Trader offer crates of merchandise for a flat fee or sell you ranges of items (say, jeans in every conceivable size). Some wholesalers let you pick and choose your items.
Cash & Carry
Cash & Carry stores take the ‘stack ‘em high sell ‘em cheap’ motto to its natural conclusion. Lots of different Cash & Carry businesses exist, including Peggy Sue, CR, and Bestway, but in general these places are big warehouses full of industrial-size containers of stuff for you to buy and sell on.
Be careful what you buy in Cash & Carry stores. eBay.co.uk restricts the sale of some food and drink items (see Chapter 3) so you don’t want to end up with a job lot of something you’re not allowed to sell!
Car Boot Sales
Car boot sales are a Mecca for bargain hunters because you get great items on the cheap. The trick at these events is to differentiate between things that will sell and things that are cheap tat. But remember: An item that one person thinks is worth £1, another may be prepared to spend £5 on.
Finding a car boot sale in your area is probably easy – they happen all over the place! Many car boot sales are advertised in your newspaper, online, and in brochures published by local clubs and societies. After you find one, make sure you turn up early to hoover up the best items. Also, be sure to take plenty of small change because traders are often reluctant to break £20 (or larger) notes.
When an item catches your eye, haggle over the price. Bargaining is expected at car boot sales, and while some people drive a hard bargain, they won’t turn you away just because your opening offer was too low.
Costco
is a big Costco fan: One day she was wheeling her cart around Costco and right in front of her was a huge display with women jumping and grabbing at the merchandise. She glanced above to read the sign: Fendi Baugette Handbags $199.99. and her daughter elbowed their way (in not too
ladylike fashion) through the crowd and saw the regularly $450 priced purses, stacked like they were bin bags. In those days, the Baugette was new and sold on eBay for around $350. Needless to say, they bought all that their credit cards could handle.
In the first edition of this topic, talked about a special on the Costco Web site (you can find the UK version by logging on to www.costco.co.uk), 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.co.uk for the price of one. If she had bought a case of this deal and held some for future sales, she’d be in the money today. It seems that Disney movies are released for a limited time only. Now, that original DVD set sells on eBay for around $40.
When an item is new but has some collectability, we suggest you buy in bulk, sell some of the item off to make up your investment, and save the balance for later. This has paid off for us a good many times with Disney films, Barbies, and Andy Warhol dinnerware.
Garage Sales
While these are a bigger deal in the US than in the UK, garage sales nevertheless provide fertile ground for bargain hunters. Buy your local newspaper or check its classified ads online (just search on Google for the name of your local newspaper), and print maps of the sale locations from StreetMap or Yahoo! If you know the neighbourhoods, make a route from one sale to the next that makes sense.
Neighbours often take advantage of an advertised sale and put out some stuff of their own. Bring a friend; you can cover more ground faster if two of you are attacking the sales.
A few tips on shopping at garage sales:
Fancier neighbourhoods have better stuff than poor or middle class ones. We know that sounds unfair, but rich people’s cast offs are better than ours.
Look for sales that say ‘Early Birds Welcome’ and make them the first on your list so you can get them out of the way. Some sales start as early as 7 am, so get up early if you want the best bargains!
Keep an eye out for ‘moving to a smaller house’ sales. These sales are usually held by people who have brought up their children, accumulated
a houseful of stuff (collectables? old toys? designer vintage clothes?), and want to shed it all so that they can retire to a bungalow in Bournemouth.
Any toys people are selling while downsizing are usually good ones.
Sales that feature ‘kids’ items and toys’ are generally held by young couples (with young children) who are trying to raise money or are moving. More often than not, these people are keeping the good stuff and are simply shedding the excess.
Going-Out-of-Business Sales
Going-out-of-business sales can be a bonanza, but be careful and don’t be misled. Find out whether the business is really going out of business and not just trying to tempt more customers. Some shop ads may read ‘Going Out for Business’ or some similar play on words, so make sure that you’re going to the real thing. When a retailer is liquidating its stock, you get the best buys. A retailer often runs the sale week by week, offering bigger discounts as time goes by. If a company is really going out of business, don’t be afraid to make a manager an offer on a larger quantity of items.
A chain of children’s wear went out of business a while ago. This chain also carried a smattering of popular dolls. A seller we know made an offer for all the remaining dolls and subsequently purchased them at a great price. Throughout the following year, this seller then sold the dolls on eBay.co.uk for three to four times what she had paid.
Auctions
Two types of auctions where you can pick up bargains are liquidation and estate auctions. (We also discuss charity auctions, where you may be able to find bargains while donating to a good cause.) You can find perfectly saleable and profitable items in all types of auctions, but each type has its idiosyncrasies.
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 bids; the buyer has the responsibility of paying these fees.
Have you seen this spam headline before?
‘Make Hundred$ of thou$ands in profits by reselling items from Government auctions!’ Yes, we’ve received this spam too. You send someone money, and they let you in on the big ‘secret’.
And the secret is: You can find out about many government auctions at these sites:
www.governmentauctionsuk.co.
uk:.This site provides news and information about government auctions around the UK. It specialises in auctions featuring items from local councils. You can sign up to receive a newsletter that gives you the dates of the auctions.
www.ganews.co.uk: An online resource of news and guides helping you to approach government auctions the right way. Subscribers also receive a regular newsletter.
www.government-auctions.co.uk:
This site bills itself as the ‘most comprehensive auctions resource in the UK’ and tells you where to find auctions involving goods seized by Her Majesty’s Revenue and
Customs (HMRC), the Police, bailiffs, and the Courts.
www.edisposals.com/: The website of the Disposal Services Agency, which gets rid of equipment for the Ministry of Defence. Don’t worry, you can’t buy anything that goes bang here, but there are interesting vehicles and gadgets – even ships!
www.bumblebeeauctions.co.uk:
This official site of UK Police property disposal features live auctions of items including watches, electrical equipment, toys, and jewellery.
www.dvla-som.co.uk/home/en/ Auction: At prestigious locations around the UK, the DVLA holds around seven auctions a year featuring the more distinctive and appealing car number plates.
For other sites, search online for government auction, seized property, tax sales and confiscated property. Remember, if you’re asked for payment to get the information, the site is probably not official.
Liquidation auctions
When a company gets into serious 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 buildings and land. Items can sell for next to nothing, and you can easily resell many of them on eBay.co.uk. A special kind of auctioneer handles these auctions. Get on the mailing lists of auctioneers so you always know when something good comes up for sale.
Charity auctions
We’re sure you’ve been to your share of silent auctions for charity. A school or an organisation gets everyone from major corporations to the local gift shop to donate items. The items are then auctioned off to the highest bidder, sometimes in a silent bidding format.
You can find many a great item at charity auctions. Aside from new merchandise, collectors may feel good about donating some collection overflow to a charity. Our friend purchased the keystone of her Star Trek action figure collection at a charity auction: The very rare tri-fold Borg (one of perhaps only 50 in existence). This figure has sold as high as £500 on eBay.co.uk, and our friend paid just £35, all while donating to a charity.
At charity shops, such as Oxfam and the Red Cross, you sometimes uncover treasure while other times you find only junk. Befriend the manager who sees the merchandise as it comes in, knows just what you’re looking for (because you said so in a friendly conversation), and can call you before the items hit the shelves. This type of relationship can save you from making fruitless trips.
Freebies
Freebies come in all shapes and sizes and – best of all – they’re free, of course. Freebies are usually samples or promotion pieces that companies give away to introduce a new product, service, or media event. Even carefully trimmed ads from magazines can fetch high prices from collectors.
When you go to the cosmetic counter and buy a way-too-expensive item, ask for tester-sized samples. Cosmetic and perfume samples of high-priced brands sell very well on eBay.co.uk. Also, look for gift with purchase deals. If the free gift is a speciality 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. Make sure you put the brand names in the title.
Fast food giveaways, especially models connected with films or popular cartoons, can be as popular as old corgi toys. The bigger the film, the more collectable the related toy, so start buying up those Happy Meals and Bargain Buckets!
When Return of the Jedi was re-released in the US in 1997, the first 100 people to enter each cinema got a Special Edition Luke Skywalker figure. These figures are still highly prized by collectors, especially since the latest Star Wars trilogy was released.
In 1995, Paramount network premiered a new show, Star Trek Voyager. In selected markets, Paramount sent a promotional microwave popcorn packet as a Sunday newspaper insert. These packets are still selling well (when you can find them), although the value rises and falls according to current interest in Star Trek.
Before you pass by a freebie, reconsider its possible future resale value.
Salvage: Liquidation Items, Unclaimed Freight, and Returns
Salvage merchandise is retail merchandise that has been returned, exchanged, or shelf-pulled (see below) for some reason. Generally, this merchandise is sold as-is and where-is and may be in new condition. To buy this merchandise, you must be prepared to pay the shipping to your location.
Available all over the country, the liquidation business has been a well-kept secret for years. As long as you have space to store salvage merchandise and a way to sell it, you can acquire it for as low as 10p in the pound. When we say you need storage space, we mean lots of space. To buy this type of merchandise at bottom-of-the-barrel prices, you must be willing to accept lorry-loads of merchandise at a time. If you have access to the more than 10,000 square feet of warehouse that you need to unpack and process this amount of merchandise, you’re in business.
Several types of salvage merchandise are available:
Unclaimed freight: When a trucking company delivers merchandise, a manifest (a document containing the contents of the shipment) accompanies the freight. If, for some reason, a portion of the shipment arrives incomplete, contains the wrong items, or is damaged, the entireshipment may be refused by the merchant. The trucking company is now stuck with as much as a lorry-load of freight. The original seller may not want to pay the freight charges to return the merchandise to his or her warehouse (or accept blame for an incorrect shipment), and so the freight becomes the trucker’s problem. The trucking companies arrive at agreements with liquidators to buy this freight in the various areas that the liquidators serve. This way, truckers are never far from a location where they can dump, er, drop off merchandise.
Returns: Did you know that after you buy something and decide that you don’t want it and return it to the shop or mail-order company, it is not usually sold as new again? The merchandise is often sent to a liquidator who agrees in advance to pay a flat percentage for goods. The liquidator must move the merchandise to someone else. All major retailers liquidate returns, and much of this merchandise ends up on eBay.co.uk.
If you’re handy at repairing electronics or computers, you can do very well with a specialised lot. You may easily be able to revitalise damaged merchandise, often using parts from two unsaleable items to come up with one that you can sell in like-new working condition.
Liquidations: Similar to the liquidation auctions that we mention in a previous section on auctions, these liquidators buy liquidation merchandise by the lorry-load and sell it in smaller lots. The merchandise comes from financially stressed or bankrupt companies that need to raise cash quickly.
Seasonal overstocks: Remember our motto, ‘Buy off-season, sell on-season’? At the end of the season, a shop may find its shelves overloaded with seasonal merchandise (such as bikinis in August) that it must get rid of to make room for the autumn and winter stock. These brand-new items become salvage merchandise because they’re seasonal overstocks.
Shelf-pulls: Have you ever passed up one item in the shop for the one behind it in the display because its box was in better condition? Sometimes the plastic bubblewrap or the package is dented, and you’d rather have a pristine one. That box you just passed up may be destined to become a shelf-pull. The item inside may be in perfect condition, but it’s cosmetically unsaleable in the retail store environment.
We scoured the Internet and found loads of liquidators. The following are some sites that stood out and offered a wide variety of deals:
Drop shipping to your customers
Some middlemen, wholesalers, and liquidators specialise in selling to online auctioneers through a drop-ship service. Some crafty eBay. co.uk sellers make lots of money selling lists of drop-shipping sources to eBay sellers – we hope not to you. Dealing with a drop shipper means that you don’t ever have to take possession of (or pay for) the merchandise. You’re given a photo and, after you sell the item, you give the vendor the address of the buyer. They charge your credit card for the item plus shipping, and they ship the item to your customer for you.
This way of doing business costs you more and lowers your profits. If you’re in business, your goal is to make as much money as you can.
Because the drop shipper is in business too, they’ll mark up the merchandise they sell to you (and the shipping cost) so they can make their profit.
Be careful when using a drop shipper. Ask for references. See whether loads of sellers are selling the same merchandise on eBay – and not getting any bites. Also, what happens if the drop shipper runs out of an item that you’ve just sold? You can’t just say ‘oops’ to your buyer without getting some nasty feedback. Your online reputation is at stake. If you find a solid source and believe in the product, order a quantity and have it shipped to your door. Don’t pay for someone else’s mark-up for the privilege of shipping to your customers.
Be careful before signing up for a newsletter on some of these sites – your spam woes may grow to massive proportions. To preserve your privacy, sign up for a free Yahoo! or Hotmail account and use it for these types of promotional offers.
A proportion of liquidation items, unclaimed freight, and returns may not be saleable for the reasons that we discuss in the rest of this section. Although you can acquire many gems that stand to bring you profit, you may also be left with a varying percentage of useless items. Read on carefully.
Items by the pallet
Some suppliers take the risk and purchase salvaged merchandise by the lorry-load. These suppliers then break up each lorry-load and sell the merchandise to you a pallet at a time. You can probably find some local liquidators who offer this service, or you can go online to find one. The rub in this scenario is: finding the right person to buy from.
As in any business, you can find both good-guy liquidators and bad-guy liquidators. The world is full of e-mail scammers and multi-level marketers who are in business to take your money. No one trying to sell you merchandise can possibly guarantee that you’ll make money, so beware of liquidators who offer this kind of promise – we don’t care who they are or what they say. Carefully research whomever you choose to buy from. Use an Internet search engine and search for the words salvage, liquidation, and pallet merchandise.
Some liquidation sellers sell their merchandise in the same condition that it ships in to their location, so what you get is a lucky dip. You may lose money on some items while making your money back on others. Other sellers who charge a bit more will remove less desirable merchandise from the pallets. Some may even make up deluxe pallets with better quality merchandise. These loads cost more, but if they’re filled with the type of merchandise that you’re interested in selling, you’ll probably write better descriptions and subsequently do a better job selling them.
Getting a pallet of merchandise shipped to you can be very expensive, so finding a source for your liquidation merchandise that’s close to your base of operations is a good idea. Notice that many liquidation sites have several warehouses, which translates to lower shipping costs for the buyer. (They can then also accept merchandise from places close to the various warehouses.) You may see FOB (freight on board) and a city name listed, which means that when you buy the merchandise, you own it in the city listed. You’re responsible for whatever it costs to ship the merchandise to your door. Search around; you may have to go through many sources before you find the right supplier of liquidation merchandise for you.
When you find a source from which you want to buy merchandise by the pallet, check out a few things before spending your hard-earned cash:
Do they sell mostly to flea marketers (you may not want that kind of merchandise because you’re looking for quality at a low price) or close-out shops (more retail-orientated)?
Did you get a reply within 24 hours after calling or e-mailing?
Does anyone you speak to appear to care about what you want to sell?
Are the available lots within your budget?
Are the lots general or have they been sorted to include only the type of merchandise that you want to sell?
How long has this liquidator been in business and where does its merchandise come from?
Does the source guarantee that you will make money or that you can make money by buying the right merchandise? Remember: No one can guarantee that you’ll make money.
Does the supplier offer on its Web site references that you can contact to find out some usable information on this seller’s items and the percentage of unsaleable goods in a box or pallet?
Is a hard sell involved? Or is it a matter-of-fact deal?
Before you are dazzled by a low price on a lot and click the Buy It Now button, check the shipping cost. Many so-called wholesalers lure you in with bargain-basement prices, only to charge you three times the normal shipping costs. Do your homework before you buy!
Job lots
Manufacturers often have to get rid of merchandise, too. Perhaps a particular manufacturer made five million nodding-head dogs and then sold only four million to retailers. This manufacturer has to quickly unload this merchandise (known as job lots) so that it can have the cash to invest in next season’s array of items. Job lots often consist of hundreds or thousands of a single item. Make sure you enjoy what you’re selling because you’ll be looking at the stuff for a while.
Remember supply and demand – don’t ever flood the eBay.co.uk market. Doing so makes your item valueless.
Many Web sites specialise in job lots, but you have to visit them often because the deals are constantly changing. One worth checking out is Misco, shown in Figure 6-1. Visit this site at www.misco.co.uk.
Figure 6-1:
www. misco.co. uk has regularly updated lots of liquidation merchandise.
Wholesale Merchandise by the Case
If you want to buy direct from a manufacturer, you can. Unfortunately, manufacturers often have a monetary minimum for the amount of your order, 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 some independent retailers who buy in quantity and who perhaps will let you in on some quantity buys with manufacturers.
Sometimes the liquidators that we discuss in the preceding section get cases of perfectly saleable goods in their loads. Pallets break up into many cases, and liquidators will often sell these cases individually on eBay.co.uk. What a great way to acquire goods for your eBay business.
Resale Items on eBay.co.uk
We’ll keep this eBay.co.uk buying technique short and sweet: Use the magic search engine! But be careful; many a get-rich-quick schemer uses boldface keywords in their auctions to attract your attention. 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 come back and buy from you again. Search eBay.co.uk auction titles for the following keywords: resale, resell, “case of”, “case quantity”, “lot of”, “pallet of” (see Figure 6-2), closeout, and surplus. Be sure to use the quotes anywhere that we include them here because doing so forces the search engine to find the words in the exact order you write them inside the quotes. Alternatively, you can just go to the Wholesale & Job Lots section on eBay.co.uk at wholesale.ebay.co.uk (see Figure 6-3).
Figure 6-2:
Results of “case of” search.
Figure 6-3:
The Wholesale & Job Lots page on eBay.co.uk.
eBay.co.uk has set up wholesale subcategories for almost every type of item. You can find the wholesale items in the category list on the left-hand side of the page after performing a search, or just go to the eBay home page, scroll down the list of categories, and click Wholesale & Job Lots. Doing so takes you to the Wholesale hub page, as shown in Figure 6-3. Just click the category of your choice to find some great deals.
Consignment Selling
Consignment sales are the up-and-coming way for you to help newcomers by selling their items on eBay.co.uk. Lots of sellers do consignment sales, and several retail locations base their business on this. You take property of the item from the owner and sell it on eBay. You’re responsible for taking photos and marketing the auction on eBay – for a fee. In addition to the money you earn selling on consignment, you also get excellent experience for future auctions of your own merchandise.
To set up your business for consignment sales, follow a few guidelines:
1. Design a consignment agreement (a contract), and send it to the owners of the merchandise before they send you their items. Doing so ensures that all policies are set up in advance and that no questions will arise after the transaction has begun.
Becoming an eBay.co.uk Trading Assistant
After you have 50 feedbacks under your belt on eBay.co.uk (and have sold at least four items in the past 30 days), you can become a registered eBay.co.uk Trading Assistant. Check out tradingassistant.ebay.co.uk/ws/ eBayISAPI.dll?TradingAssistant& page=main
eBay.co.uk publishes a directory of consignment sellers that you can search by telephone area code, postcode, or country. Check out whom in your area is a registered Trading Assistant. Read these consignment sellers’ terms and fees. Consignment sellers charge varied amounts based on their geographic location (some areas can bear higher fees than others).
2. Have the owners sign and send the agreement to you (the consignor) along with the item.
3. Research the item based on past sales so that you can give the owners an estimated price range of what the item may sell for on eBay.
4. Photograph the item carefully (see Chapter 11 for some hints) and write a thoughtful, selling description.
5. Handle all e-mail inquiries as though the item were your own; after all, your fee is generally based on a percentage of the final sale.
What do you charge for all your work? We can’t give you a stock answer for that question. Many sellers charge a flat fee for photographing, listing, and shipping that ranges from £5-£10, plus as much as a 30 per cent commission on the final auction total (to absorb eBay fees). Other sellers base their fees solely on the final sale amount and charge on a sliding scale, beginning at 50 per cent of the total sale, less eBay and payment service fees. You need to decide how much you think you can make on an item.
Traditional auction houses handle consignment sales in a similar fashion.
When you reach the next level of your eBay enterprise and are looking to spend some serious money on your merchandise, check out eBay Timesaving Techniques . That topic delves into the type of wholesale-buying secrets normally reserved for the big-time retailers.
