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How to Get the Goods

Need a steady stream of inventory? Hit the web to make connections and build relationships.
September 1, 2007
URL: http://www.entrepreneur.com/article/183882

It's easy to sell on eBay, but growing a business on eBay is a bit more complicated. It takes strategy.

Many eBay sellers continue for years selling the occasional find from a garage sale or thrift shop, but when you're ready to sell at the higher volume that creates Power-Sellers, it's time to look for a reliable, affordable and, most important, steady supply of salable goods.

While you're not likely to get anywhere by calling Apple and trying to order iPods at wholesale, the marketplace does offer a plethora of supplier choices for a growing business on eBay. The search for inventory often begins online with internet searches that can identify wholesalers, closeout dealers, job lot traders and liquidators.

Steve Barry (eBay User ID: 2kool4skool-music), of Carlsbad, California, started on eBay selling guitars and keyboards acquired for his work as a studio musician. After leaving the music business, starting a full-fledged business online seemed like the perfect segue. Barry, 33, has successfully used a variety of suppliers, from drop-shippers to trade show contacts to individual sellers, applying his in-depth product knowledge at every step to build his business to between $60,000 and $200,000 in sales a month.

Keeping in mind the many other entrepreneurs conducting similar searches, Barry often bypasses the first 50 pages or so of search returns when he looks for products on the internet. "A lot of people are selling stuff, but sometimes it's not easy to find them," he says. This method increases his chances because other searchers usually give up by page 50.

Digital and print magazines that print directories of domestic and overseas wholesalers offer another way for budding eBay entrepreneurs to connect with suppliers. One company, The Closeout News, lets buyers request specific products by posting free want ads on its website. Some sellers go directly to the manufacturers themselves, which offers them to grow to another level of opportunity--and potentially, more risk. But it made sense for David Stankunas, 26, (eBay User ID: daveeyboy) of Los Angeles.

An avid poker player, Stankunas noticed how the TV champions received poker bracelets as a reward. He wanted to do the same for his own informal poker gatherings but couldn't find the bracelets anywhere. So he worked with a jeweler, developed a prototype and found manufacturers in China and Vietnam to make them for him. "I knew there was a market for this," Stankunas says.

The process took time, and Stankunas started by using the internet and search terms such as "overseas," "manufacturers," "jewelry" and "China." He painstakingly sifted through the results, began writing e-mails to establish contact and waited to hear back. He decided to only work with companies that responded within 24 hours and demonstrated a working grasp of business English. "When you're dealing with overseas [manufacturers], there's some risk involved," he says. "Check references as best you can, start out small, and see how the relationship develops."

As Stankunas builds his business, it's been worth the effort and risk to contract directly with manufacturers, because his sales margins are higher--projected sales for 2007 are between $100,000 and $150,000. "I've been fortunate," he says. "I put in the hours, did the research, and it's paid off."