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Become a Product-Sourcing Pro

All out of product sourcing ideas? Check these options out.

When your business has outgrown job lots, retailer overstock and liquidated merchandise, where do you go to find factory-fresh products with broader customer appeal?

Trade shows, wholesale merchandise marts, drop-shippers, manufacturers and manufacturers' reps are the links between eBay sellers and the goods that raise established businesses to the level of virtual retailer. While these sources will raise your out-of-pocket expenses, you gain access to a greater variety of products that help you stand out in a fiercely competitive market.

At first glance, drop-shipping seems like the easiest approach. Drop-shippers do the wholesale shopping themselves, store the goods and ship them at your request to your customers. Some even provide the product descriptions and photos for your eBay listings. But the service is expensive and may leave you with little, if any, profit after the sale.

You might get a better deal when the drop-shipper is also the manufacturer. "There are thousands of manufacturers who will drop-ship for you," says Skip McGrath, an eBay collectibles dealer in Anacortes, Washington, who self-publishes books and e-newsletters from his website. McGrath suggests starting your search for these manufacturers using business databases such as the Thomas Register Directory. Thomas' listing of U.S. companies is available online at www.thomasnet.com.

If you don't find a drop-shipping manufacturer, it's better to avoid this method of supplying your business on eBay. "There's not enough profit margin," says Marsha Collier, author of eBay Business All-in-One Desk Reference for Dummies. Instead, consider making these suppliers just one part of your sourcing strategy. For instance, if a customer asks for something related to your product line that you don't carry, a drop-shipper offers a convenient option. This helps keep your customers happy and enhances the flexibility of your business.

Traveling to trade shows and wholesale merchandise marts also cuts into your profits, but the payoff in new contacts with manufacturers and wholesalers makes them well worth it. If traveling is out of the question, Collier suggests checking your local Yellow Pages for listings of wholesale and retail sources for the types of products you want to sell.

Some eBay sellers eliminate middlemen like wholesalers and drop-shippers and buy directly from the manufacturers. The fact that many manufacturers are overseas can make this difficult for businesses on a budget, but a few resources have cropped up to close the gap between continents. These include www.globalsources.com and www.importexporthelp.com, each of which links U.S. buyers with manufacturers in East Asia.

Before taking this step, though, you'll probably need a little cross-cultural training. "Get a sense of the business etiquette," says Sun W. Kim, 30, founder of TekGems Inc. (eBay User ID: TekGems) in San Francisco. "You'll have a much smoother relationship."

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