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