URL: http://www.entrepreneur.com/ebusiness/ebaycenter/sourcingproducts/article84180.html

Location, location, location is the first lesson retailers learn. But in the virtual world of eBay, the make-or-break factor for success is your product.

For most eBay sellers, product sources are a tightly held secret, a sign of how challenging it can be to secure a stable supply of inventory with wide appeal to buyers. But the following guidelines will help get you moving in the right direction.

The opportunities for finding product can be as close as your attic or as far away as a manufacturer in Asia. For the beginner, local sources offer the best opportunity for manageable inventories as well as a test of what best matches your selling skills and consumer interest. Local sources include garage sales, thrift shops, flea markets, going-out-of-business sales, estate sales, storage site auctions, even junkyards and pawnshops.

Develop relationships with local independent retailers who need to sell slow-moving merchandise and will sometimes sell at a huge discount. Or start right from your computer by visiting sites such as www.tuesdaymorning.com, which sells brand-name and designer closeouts; http://auctions.samsclub.com for closeout specials; www.ustreas.gov/auctions; and www.biglotswholesale.com.

Many new eBay sellers get inspiration from hobbies or existing side businesses. Tahl Benit, 28 (eBay User ID: customcomputerseller), has been building computers for fun since high school, and eventually began selling them by word of mouth. Within a few months of starting Multilink Custom Computers Ltd. on eBay last June, Benit saw sales rise to between $15,000 and $60,000 a week.

Benit's specialty is building gaming and office computers using high-performance AMD processors. As his eBay sales rose, existing suppliers couldn't always keep up with growing demand, and he began looking for deals on computer supply sites such as www.avnet.com, www.mwave.com, www.newegg.com, www.zipzoomfly.com and eBay's wholesale lots. "If I'm purchasing 50 hard drives, eBay is by far the best place to go," he says. "Anywhere else, I would pay $100 apiece, but on eBay, I might pay $1,000 for all 50." He also qualified to become an AMD reseller to expand his product mix. Benit, a one-man shop working from a two-bedroom apartment in Columbus, Ohio, says he manages his expanding inventory with an automated eBay listing service from Aplus.Net in San Diego, as well as with QuickBooks.

Finding a niche, like Benit's high-end computers, can help shape a successful sourcing strategy. It worked for Platinum PowerSeller Sarah Davis (eBay User ID: fashionphile) in San Antonio, Texas. Davis started selling high-end women's apparel from consignment shops and local chain retailers including Neiman Marcus and Nordstrom before focusing on leather goods from Louis Vuitton. "As I narrowed my niche, my sales improved," says Davis, 33, who has sales of over $25,000 a month. Loyal repeat customers also helped the business grow, and when Davis expanded her inventory to consignment, those customers became another source of reliable supply.

The beauty of selling pricey brands like Louis Vuitton, Davis says, is that items ending up in a consignment shop are still priced beyond the means of the average consignment shopper. That leaves more opportunities for Davis, who still visits San Antonio consignment stores for a good deal. "I can buy something for $800," she says, "and still make a couple hundred dollars selling it on eBay."