Monday, April 20, 2009

Bulk Up Your eBay Profits

By Chris Malta, CEO and Founder of Worldwide Brands

Wholesale Tip #1

While many people use Drop Shippers successfully on eBay, many more people misuse them, and hurt their profit margins. Drop Shipping (where your wholesale supplier sends products one at a time to your customers for you) is best used for testing product markets without laying out cash in advance. It's a safe way to find out whether or not a product sells before investing more serious time and money in the product market.

However, the profit margins you get from selling Drop Shipped products are always going to be slimmer than the profits you earn from buying products in bulk and shipping them yourself. That's because wholesalers do more work when they ship one product at a time for you, and they are forced to charge you more for the Drop Shipped product.

You're always going to earn better profits when you buy wholesale products in bulk and ship them yourself. However, it can be costly to buy in bulk, because wholesale suppliers often require you to buy large quantities of products at a time. Several years ago, I coined the term "Light Bulk Wholesale", and set out to locate wholesale suppliers who would create special bulk product deals for $500 or less, instead of requiring thousands of dollars in bulk purchases. My company has successfully convinced a very large number of wholesalers to provide this service.

So, testing your product market by using suppliers like these as Drop Shippers first and then buying in Light Bulk quantities from them once you find products that sell is the best way to ease into a product market with very little cash investment, and yield the best profit margins for your eBay business.

Working with Light Bulk wholesale ordering also has the added advantage of better Buyer Feedback, since you control your inventory and don't have to rely on a third-party Drop Shipper to deliver promptly for you. If you've noticed that you have competition that offers lower prices on their auction listings than you can get from your Drop Ship wholesaler, this is what they're doing. They're testing with Drop Shipping first, and then lowering their wholesale costs by buying in Light Bulk or Bulk quantities. You can do the same thing, if you learn how to use Drop Shipping a test mechanism, not a permanent solution.

This article was written and provided by Chris Malta, CEO and Founder of Worldwide Brands. Worldwide Brands is an eBay Certified Solutions Provider providing product sourcing information for eBay sellers. They are the publishers of an extensive directory of legitimate, fully-verified ecommerce wholesalers and manufacturers.

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