Making a Profit on eBay

merton.908 · 18-02-08

Hello all. As some of you know, I am one of many eager sellers looking to get their lucky break. However, before I get ahead of myself I've been noticing a daunting trend: It seems as though the margin of profit after bulk purchase, shipping, and taxing on products--is so slim after all the fees--that it is difficult to make a profit without a brick-and-mortar operation.

I know that most people go on forums such as this, or do their wholesaler/distributor homework because they want to be able to buy quantities of an item at lets say, no more than $3000 dollars, and be able to make a $1000 dollar return after resale.

My question is, how are people making a profit selling the same popular low-profit items on eBay as on these forums? An example is videogames. Before I officially get a tax ID, I am affraid of the actual profit margin I can expect from buying in bulk from ANYONE. Any feedback?

zoe85 · 18-02-08

The real money is not in anything branded or branded electricals/games etc.

merton.908 · 18-02-08

While I've heard this before zoe, and I know you are a long-time seller, it still leaves me scratching my head because of the fact that so many people continue to make a business out of these industries. There are also many powersellers that are able to sell a constant supply of these products at even cheaper prices than you can get them wholesale on these forums.

I also noticed on the other topic that you have sold GPS systems before, although you noted that the profit margin was actually negative. Knowing this, why do you or other sellers continue to do so regardless? Thanks for the help!

zoe85 · 18-02-08

There are always going to be people who can obtain stuff cheaper than me or any other seller. I do not disagree there are many people selling branded electronics and making money (debatable how much they actually make!).

Ask any of these 'powersellers' if they can supply a TAX receipt with your purchase? That will explain a lot if they do not supply a valid TAX receipt.

To a newbie it will be a near impossible task to break into this market as it is based on volume and is a numbers game.

It's near impossible to purchase items such as ipods or consoles in Australia from official channels and sell these items at less than RRP and make a sustainable profit. Even if you bought 100,000 units (and providing a distributor was willing to deal with you) the discount would be minimal.

I was in the similar market for 10 years, believe me I know about branded electronics, the volumes you need to sell, volume targets and most importantly volume bonuses. It's a numbers game.

It's not uncommon in a strict dealer/manufacturer controlled environment that sellers will sell at cost, or even below cost just so they can hit their target and secure their bonus. That volume bonus is their profit.

For example me selling you widgets at $10. If you sell 1000 in a month I will give you a ?5000 bonus. You sell 5000 at $7.50 and actually make $2500 (once the bonus is paid.

As for GPS systems. I have never sold a single GPS Device in my life so I am not sure where you got that information!?!?!?

jillian90 · 18-02-08

There are other rewards to large voulme accounts. I have personally had paid-for trip to Hawaii and several to Bermuda, untold three day "get-aways" at ski lodges and such. Some manufacturers will even reward good distributors with leased vehicles. Golf trips, convention suites, all that and more. Just be a good distributor.

TV's, microwaves, other household items (my wife has, and I'm guessing here, a 40 cup coffee pot that gets her invited to all sorts of garden club functions - just be sure and bring that big coffee pot), clothes shoes, travel goodies, you name it. FREE! Buy our stuff, get this. Seel so much this year and "earn" this. Hell, don't sell, just buy this much and earn this.

Rebates. There are many who sell at cost and make their money once a year from a volume rebate.

Whether any eBay powersellers qualify I can't tell you. But it could just be that some of those power sellers are cousins of the largest distributor ship in the country for a particular brand or another. I don't know this to be so. I'm only answering your "how can they?" question. Alot has to do with the management of the brand. Some don't want their stuff on eBay at any price. Others may speak against it, but turn a blind eye.

And there are always fakes in the equation.

There are no easy answers. It's just that things are what they are and you have to make if work for you or move on to other products.

merton.908 · 18-02-08

Its your second reply on that page. Thank you both for the very usefull information!

zoe85 · 18-02-08

Believe it or not the distributor sells many products. Just because someone knows the distributors price, it does not mean they sell them. I also know the cost price of an iPod and would never dream of selling one.

Hurell.K · 18-02-08

True profit comes from your business image i believe.

People want quality and not quantity.

If you can research and find a good gap then put your foot down.

It seems every 1 is competing against each other but the real generated revenue comes from your time and dedication.

Profiler · 18-02-08

A lot of the electronics on eBay are refurbished,higher profit margins on refurbished electronics.

Scott

merton.908 · 18-02-08

Scott, I'm really glad you brought that point up because I've honestly been trying to research how some of these characters are getting their refurbished goods which--like you say--have a higher profit margin. Aside from that however, I am still wondering how these real dealers of full retail versions of these products are consistently offering such cheap deals!

merton