Choosing your products can be the hardest or the easiest chore you have. In any business, the product is the core of the business. I believe in diversifying myself so that I never have to rely on one thing. This can be an excellent strategy since some things are cyclical on eBay. For example; one week I sold a cabinet and it received moderate hits and a small number of bids. The item ended up closing without the reserve being made. I relisted the item a couple of weeks later and had a lot more action and eventually sold it. Why? Because the same people are not on Ebay every week.
Tools
If you decide you want to carry tools on eBay here a few things you should know. Do your research. Find out who is selling what and for how much. I use the completed items search on eBay to find out how much items actually sold for. Next realize there are certain sellers that do all their business on eBay and buy their tools in large quantities. Unless you can buy large quantities and beat their prices, you might just frustrate yourself. The best way is to find something that is not for sale on eBay. If you know anything about business, you certainly have heard this before. So how do you do it?
I think the best way is to find something you like or that you enjoy working
with. Then start looking to find out if it’s something that will sell well online. Keep in mind; a lot of the really good ideas are already taken, but ideas evolve. To buy tools, you have to find someone who will sell them to you for a price good enough that you can increase it to make a profit. This is the classic economic dilemma of most businesses today. So how do you do it? Here are some different ways that can inspire your own ideas.
- Become a distributor for a certain manufacturer or brand name you like.
- Buy wholesale from wholesale distributors.
- Buy distressed goods or closeout goods from closeout companies.
- Tap into regional sources indicative to your area.
- Import goods from another country.
- Buy items through classifieds in your local area.
Let’s look at each of these items in detail.
Distributorship
This is a great idea. It does take some legwork however. I found the best way is to contact the company by email (the quickest response) and inquire of becoming a distributor of their goods. I keep a blank letter filled out in my computer and plug in the names of the companies. The only roadblock you can run into is that larger companies have a minimum ordering quantity. Sometimes the number is a big one like 5000 units or a value such as $10,000. This can be no problem if you have the cash, but can hinder you if you’re strapped. It can be a great opportunity if you have some money to invest and you should treat it as an investment. There are some great tools out there that are sold in brick and mortar stores but not online. Keep in mind the size of tools your buying and shipping information. Just because you can buy a tool or other item for a great price you still have to figure in the price of getting it to you! This particular method takes more time to set up and it is wise to develop this distributorship idea while you have other things going online.
Regional Sources
I live in steel country. There are a many parts, tooling, and manufacturing companies in this area. If I am inventing a part that’s metal or plastic, finding a local company that can help make my part is a good start. Mills are good sources for wood at discount prices. I access aluminum companies that are local to make certain jig materials that I use in my shop. Most companies have very flexible quantities and you can usually buy items by the piece. Look for opportunities that are indigenous to your area. My town also is host to Antiques. There are more antique shops than you can shake a stick at here. Each one has their specialty items and they can tell you what hot sellers are. Knowing what is hot in an area is important. While visiting a consignment shop I asked the women why they had so many pieces of wood furniture with dark stain and “fruit” graphic art. She said that they sold really well in this area. (Personally I found it repulsive).
Also look at opportunities your geographic area can provide. Areas saturated with industry can give you a local advantage of picking goods up for resale. The cost of shipping things motor freight can be extremely high, thus making this unappealing. I once found a tremendous opportunity on some wood that I wanted to have for my table set operation. The wood was precut into the sizes and dimensions that would save me considerable amounts of time. I could also market some of the wood as a separate item. However the wood was located in Montana and the shipping cost prohibited me from bringing it in. It just did not make good sense.
Importing
See the entire page on the site. Good stuff!
Classified Ad Items
Personally I think this is a great way to make a little extra money selling online. I love looking through the paper and finding something I know I can sell online for a profit. I do it all the time. It’s a great way to feel out a product line that you might be interested in creating yourself.
- The main disadvantage of this idea is that it is not a good way to build inventory. Good enough deals that can give you a decent profit don’t come along that often.
- Smaller towns usually have better deals. A lot of times people that have not embraced the online potential of selling don’t know they can reach a larger target audience online. Or they may just not care to put any additional effort into it.
- If you stay with the idea that it is more for fun or additional money, you will have more luck with it. Relying on it for a steady source of income is not recommended.
Original Items
Custom woodworking and crafting is a great outlet and very popular online. Try and stay away from traditional woodworking items such as breadboards, spice cabinets, and shelves, they are bound to do poorly. However if you find out what is a little more popular you can change that. For instance, take an entertainment center or old hutch and focus on finishing that item into today’s hot colors or finish styles. Those are items people see on Home and Garden TV or read in magazines and want to purchase. Keeping in style will definitely help sales.
I recently designed a simple table that is fun to build and easy to manufacture. What makes someone buy mine verses the “cheapy” at K-Mart? First of all consider the finish. I take the opportunity to experiment with faux finishes or antique finishes that people cannot find in the store. Painted finishes right now are the hot commodity. Perhaps you have already made something already that can be tweaked and adjusted for sale. Think through the design, can you manufacture them easy enough? Do you have the tools need? Do you have the time to make them in quantities enough to make it worthwhile? Remember when making items, the first (prototype) is always the hardest and takes the longest.
By now you probably already have an idea on what you want to carry. I will give you a couple of examples of my thought process when I try and decide to carry an item online.
Example 1
Let’s work through a practical example. Instead of saying a “widget” I will pick a power tool to sell on eBay. I will use the example of a router table to illustrate the process.
- First I decide that I like to build router tables and know the features that I like.
- Second I do the research and find out that there are number of other companies that sell router tables, so I decide that it would probably not do me very well to be just another guy with router tables. However in this example we will pretend there is not a lot of people selling them and move forward.
- Next I break down the components and find out I need a 1 ½” thick top made of MDF. Then I need a miter track, a fence, a dust port, a table insert and the tools to make all of them. The Top (MDF) needs to be laminated so I need some laminate skills and some special tools (router, flush trim bit, laminate roller, laminate cutter, contact cement and most important a laminate source).
- I find sources for all these parts to assemble my router table. Chances are I have to buy them in larger quantities to make the job worthwhile. So instead of making 5, I really need to make 50 to take advantage of the price break on buying my parts. Some parts you may have to actually buy retail if you can’t find a good source for them. Remember, if you don’t have all the parts, you’re done before you have started.
So here is the breakdown:
| Item | Price |
| MDF | $25.00/Sheet, makes 3 |
| Laminate | $33.00/Sheet, makes 3 |
| Insert | $20.00 |
| Miter | $14.00 |
| Dust Port | $5.00 |
| Fence | $5.00 (you construct) |
| Fence metal | $7.00 |
| Bit Guard | $12.00 (plastic) |
| Leg Kit | $8.00 (you make) |
| Total | $78 per unit |
The Total is $129 but is really less since your MDF makes three so you re-figure for three units and that comes to $78.00 per unit. Now these are not the exact prices you may find, but it gives you a starting point on how to figure this out. (See the Formula page for more details.)
Now you look at the cost of $78 and then find out you could buy a router tabletop for $99 retail. To get your costs down to compete effectively and make a decent return, you have to get the cost of all your parts lower. Now you’re talking about investing more money to get a better price on your parts. I plug everything into my formula sheet. Not only does it tell me how much it will cost me to build the item but how much money I am going to make per unit and how many units I would have to sell a month to make it worth my while.
Starting to get the picture?
Example 2
I, like many other guys, like sports. Ok I love sports. I use to work in a sporting goods department and probably know a little more than the average sports enthusiast. I understand that sporting goods are great sellers on eBay. In fact they are very good.
- So I think through this one with some of the lessons I have learned. I know I can’t possibly carry all sporting goods because they would be too broad of a product spectrum, so I need to specialize (niche).
- So I pick fishing. (I like it and I know it) So fishing supplies interests me and I start my research.
- The next thing I do is find out what sells well on eBay and go from there.
- Let’s say its artificial lures. Now I have to find someone who makes them and figure out how to get them. I go to the Internet and look up lure companies and contact them about being either a distributor or buying their goods wholesale. I find out that their minimum order is $5000 (which is $5000 more than I have), so I eliminate that one, but just for now (think later down the road).
- I need a smaller source, someone who is willing to work with me. So I go to the local bait shops and talk with all the owners who are looking to improve business a bit. After a while I find one who is willing to give me a discount if I buy in bulk. I don’t have to buy thousands, but it’s a start. I also stumble on a small kit that allows you to learn how to mold your own fishing lures! So I think that through and try it out.
- Sure enough I need to test my creation, so I have to go fishing (this is getting better and better). After a while of testing, I find something that actually works and I can make…Bullseye!! Combine that with the items you get from a local shop and you have enough for awebsite AFTER you start on eBay.
- After you build up some capital you can think about the larger companies with the minimum orders. Now you also think about importing some Chinese fishing lures since you read an article that they are getting good at making them (see importing section).
This is just two small examples of how to get things started. I will share with you another of my philosophies that I did not include in the beginning.
Never let price get in the way of figuring something out. Sit down and decide if you can do it, then figure out how to make it happen.
I really hate it when people look at my idea and then announce it can’t be done before really investigating it. I really believe you can do anything you put your mind to. At first I used to let the negativity discourage me. Now I use it as a tool to fuel my desire to make it happen. I believe a mind change makes all the difference in the world here. I remember seeing a movie about Billy the Kid, I can’t actually remember the title but the scene is clear in my mind. At one point Billy and his band of outlaws are holed up in a house surrounded by the law. Then as they are peeking out the windows the Calvary rides in. Billy turns to one of his outlaw friends and says, “I like these odds.” One would probably think they are doomed but he thought more positively, even though he was a criminal.
Positive thinking and determination make the difference in choosing your products. There is a lot to be said for tenacity.
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