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Skip McGrath's 2017 Holiday Sale

eBay or Amazon – Where Can I Make the Most Money?

The eBay & Amazon Seller's News ~ November 28, 2017 ~ Volume 18, Issue No. 17

Tips, Tools, News and Resources for eBay, Amazon and Online Sellers
by: Skip McGrath

In This Issue:

Musings from and about eBay, Amazon and The World Wide Web

  1. eBay or Amazon – Where Can I Make the Most Money?
  2. Making Smart Financial Choices
  3. Is a Financial Meltdown Coming and How Will it Affect Online Sellers?
  4. How to Gain Admittance to Wholesale Trade Shows
  5. Sourcing from Overseas - Importing
  6. New Wholesale Sources for eBay and Amazon Sellers

"Be yourself – everyone else is already taken." ~ Oscar Wilde


Musings

Every year in December, my book sales drop to almost zero. That is why I run my holiday sale where I offer 40% off on all my products. The sale starts today and lasts until midnight on the last day of the year – December 31st. To get the discount, use the coupon code SAV40SKIP on any of my products. After you enter the coupon be sure and click the button that says APPLY or it will not take.

PLEASE NOTE - If you want to buy more than one book you will need to buy them separately because my shopping cart will only discount the last item sold.

UK Readers, my coupons do not work on my UK Site, so instead I’ve reduced my prices there. Follow the link to see the discounted prices.

I know that some of you may have bought books recently, and I am sorry I did not give advance notice of the sale, but had I done that, my sales would have gone to zero for the entire month of November. The same thing goes at the end of the sale. Please do not email me a couple days after the sale asking me to extend it – because I just can’t do that. I am not trying to be greedy or difficult – but I have a business to run, and my wife and I depend on this income. A sale is a sale – and all sales have a start and end date.


As many of you know, one of the niches I work in is gun holsters, and accessories such as rifle slings and TSA approved lockable pistol cases. Well, last week eBay cancelled a listing for Brand name misuse. My violation: I had a listing for a "Colt 1911 Pancake Holster…" Although I understand the policy -I didn't think the policy fit in this case, so I called eBay support, who switched me over to Trust & Safety.

The problem is that buyers shop for gun holsters and slings the same way they shop for cell phone cases. Someone who owns a Colt model 1911 will shop for a holster by typing "Colt 1911 Holster" into the eBay search bar, much the same way someone looking for a specific cell phone case would type iPhone 8 Case.

The Trust & Safety rep I spoke with took the position that since the holster is not made by Colt, I can not have that brand name in my title or description. I seemed to be the only one singled out for this because, when I typed "Colt 1911 Holster" into the search bar, eBay returned 6,973 results. (A search for Glock 17 holster returned over 18,000 results)

Next I tried typing iPhone 8 case, and this time I got over 1.3 Million results. So, if eBay were to follow their policy exactly, they would have to cancel over a million listings for various cell phone accessories and almost all gun holster listings.

eBay trust & safety informed me if I was caught doing this again they would suspend my account. So I ended all my holster listings (about 40) just to be safe.

Now: The rest of the story : I mentioned my experience to Ina Steiner, editor/publisher of eCommerceBytes. She did a blog post that mentioned this experience. Her blog must be read by someone in eBay's executive office because shortly after it posted, I got a phone call from eBay's executive offices. The woman I spoke to (sorry I didn't catch her name) first apologized, and then informed me I could relist the original item, and the 40 or so items I cancelled. I managed to do most of them late on Thanksgiving day so they would be listed on Black Friday.


Bundles and multipacks may be dead . I recently listed a 3-pack of some spices and, of course was asked for a UPC code.

I used a purchased UPC code (bought from an accredited GC1 supplier). But when I launched the listing, Amazon immediately cancelled it. The reason given was my UPC prefix did not match the brand name of the product. I called Amazon and was told this has always been a regulation, and the only way to list the products is to get the manufacturer to create a UPC code for the 3-pack.

Fortunately, I have a good relationship with this particular manufacturer. When I asked them to do this, they sent me a dozen unused UPC codes with their company prefix that I was able to use to create my bundles and multipacks. Had this happened with a different manufacturer, I doubt they would do the same thing -I suspect that over 90% of manufacturers would not.

I can see this becoming a concerning issue with sellers. Just one more good reason to create and sell private label products.


State Sales Tax Nexus - I know a lot of you are worried about this -but don't be for now. This issue is the subject of several court battles, and there are several bills floating around Congress that could affect the state laws on this. I always offer the admonition that I am not an attorney, or licensed tax professional. With that in mind, my advice is to hold off doing anything right now. I think this issue may become more clear in the new year. But, if a tax professional tells you differently, then you might want to listen to them.


This week I got an email from eBay that said:

Immediate action required. Remove policy and/or security violations from your listings.

We're writing to let you know, that as of November 2017, some of your listings are in violation of eBay policies and require immediate update.

Twenty-two of your listings contain(s) non-secure HTTP content. Starting in October 2017, Google Chrome - the browser used by almost half of all eBay buyers - will begin displaying the message "Not Secure" in the address bar when users visit standard HTTP pages or HTTPS pages that include non-secure HTTP content. We encourage you to immediately remove this content.

When I looked at the listings eBay flagged, one contained an image hosted on my website on a secure https page. All of the others were listings where the main photo was from my Amazon listing (I use Joelister to create my eBay listings and fulfill them when they sell).

I have all the images on my hard drive and could change them -but it really isn't worth the effort given the level of my eBay sales -so it was easier to end the listings which is what I did.

I am not missing much. Of the items eBay flagged - I looked, and I have only had 3 sales over the past 2 months, whereas all of these items sell fairly steadily on Amazon.

So, as I said: It is easier to just kill the listings.

A few years ago, my eBay fees used to average over $3,500 a month. Lately they have been under $300 month. Since fees equate to sales, that is a very telling number.

Ina Steiner featured an item in the eCommerceBytes Blog that had my post and lots of comments


Why Feedback and seller metrics are important : Look at the listings below (These are two sellers offering the identical item). We all know that Amazon awards the buy box to the lowest price seller. That is generally true -but not always. Amazon looks at several factors, and one of the most important is your account metrics. Look at the sellers listed below (I have blanked out part of their names).

Click here for a larger image

The first one at $78.95 is $12.78 cheaper than the second seller at $91.73 (plus $7.80 tax). Yet the seller at $91.73 has the buy box. Why is that? The cheaper seller has a feedback rating of 90%, while the more expensive seller has a 99% rating. Another factor that Amazon looks at (but doesn't show) is policy warnings and violations. I strongly suspect that could be an issue here also.

Also notice the second seller is selling through FBA and therefore eligible for Prime. The lesson here is to use FBA and take steps to protect your account metrics.


I am running this again because Stamps.com just renewed their offer.

Simplify Your USPS Shipping with  Stamps.com

  • Get up to 39% discounted rates on Priority Mail
  • Import orders from eBay, Amazon and more
  • Save up to 40% on package insurance
  • Hide the postage amount on your shipping labels (Stealth postage)
  • Ship worldwide with USPS First Class International

Click on the box on the page that says, Special Offer $100 Value to get a special deal for my readers.


Christmas Selling Alert - If you use FBA, be sure and get all your merchandise into Amazon by December 4th. Don't forget - January is usually a pretty good month (due to returns & gift card shopping). Start shipping goods to FBA, by December 18th to get to FBA in time for New Year's Day Weekend selling.

If you sell on eBay, or Merchant Fulfill on Amazon, offer free shipping from November 24th to December 18, and offer expedited shipping through December 20th. That will increase your sales.

For you eBay and Amazon MF sellers: This year the post office has said they will not deliver on Christmas Eve, but UPS will -although there will be an extra charge.


Some Keywords you may not have thought of: This time of year, think about using the words stocking stuffer on products that apply. Here is a screenshot from Merchant Words, the Amazon keyword tool that I use:

Click here for a larger image

Actually those numbers are pretty low since Merchant Words is looking at the past 60-days. By this time next month, the search volume for those terms will increase about 200%. (A few other popular terms include stocking stuffers for kids, stocking stuffers for dogs and cheap stocking stuffers.

Another term that works well (again, only if it applies) is Made in USA. This term is not as large as stocking stuffer, but it does pretty well all year round.

Click here for a larger image

So, if a product you are selling is made in the USA, be sure to add this to your keyword field. Here is an example: One of the products I sell is smoked salmon dog treats that are made in Alaska. I was selling about 3 packs per week. As soon as I added Made in USA to one of my product bullets and the keyword field, my sales doubled.

These Merchant Words examples are related to Amazon, but I find the same terms that work on Amazon, also work very well on eBay.


Toy Sellers - In the last issue, I wrote about brand restrictions. This is a major issue for toy sellers, especially those of you who practice RA and OA. Many of the top (read best-selling) brands of toys are restricted. These include:

  • Cloud B
  • Cozmo
  • Discovery Kids - not all, just double check
  • Disney Frozen
  • Fischer-Price
  • GUND
  • Hatchimals
  • Hasbro
  • Learning Resources
  • Lego - Most products, but not all
  • Lego Star Wars
  • Ravensburger
  • Snoopy (Sno Cone Machine)
  • Star Wars Action Figures

I have had good luck selling restricted products as Used-Like New. I mention in my conditions that the retail box is in excellent shape and then I price it just a bit below the new item's price.


Lets get started with our articles:

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1. eBay or Amazon – Where Can I Make the Most Money?

I mentioned in my last issue, that Amazon has been consistently outperforming eBay for the past six years. But there are many factors to consider when comparing the two sites, and making a decision where you want to sell. Although I prefer Amazon for my business model -it may not work for yours. Let's examine some of the differences:

Amazon

  • Amazon is consistently the most trusted shopping site on the internet
  • New consumer products usually sell better on Amazon than they do on eBay, although some eBay sellers of these goods do very well
  • Amazon tends to attract impulse buyers, whereas eBay tends to attract bargain hunters
  • Amazon offers Fulfillment by Amazon (FBA) whereby you ship your goods to Amazon in bulk (usually a case or two at a time), and when your product sells, Amazon collects the money, packs and ships it to the customer and handles returns
  • If a seller Merchant Fulfills (MF), the seller has to ship the item before the buyer pays Amazon, package and ship the item, handle customer service and handle returns (much like eBay)
  • Amazon requires permission to sell in certain categories
  • If you use FBA, the fees can often be quite high (Commission + storage, handling, etc.)
  • Amazon offers the Prime Membership program ($99 year) where buyers can get free two-day shipping that is not charged to the seller
  • Amazon competes with its sellers
  • Selling policies tend to be stable on Amazon, but when they change it is usually done with very little notice (although eBay has also been doing this lately)
  • Amazon's fees are slightly higher than eBay/PayPal
  • When Amazon collects payment from a buyer -they take the credit card risk
  • Amazon does not charge listing fees
  • Seller support is quick and easy to access on Amazon

eBay

  • eBay has been around longer than Amazon
  • While new consumer goods sell better on Amazon, used and vintage products tend to do better on eBay (although this is changing, as Amazon is trying to attract more used product sellers).
  • Even when you add in PayPal charges, total eBay fees tend to be 2 or 3 percent lower than Amazon. And, on eBay if you achieve Top Rated Seller Status, you can get substantial fee discounts
  • eBay does not sell anything. Your only competition is other sellers
  • eBay places limits on new and small sellers. These include Account limits, Category limits and item limits on the number of items (or dollar amount) sold per month. You can find more details about eBay Limits here.
  • When something sells on eBay, a seller has to: communicate with the buyer, collect the money (including taking the credit card risk), package and ship the item, post feedback and handle returns.
  • eBay offers the eBay Store feature whereby you can save on fees and drive customer traffic direct to your eBay Store (Amazon is just starting to do this, but eBay's store feature is much more sophisticated)
  • eBay has seller storefronts where you can separate products by category or niche
  • eBay charges listing fees (3,5, 7 & 10-day auctions and 30-day FP and Store fees) Amazon does not charge listing fees
  • eBay offers a promotional email service whereby you can build mailing lists, and email your buyers (by category or product niche) about sales, special offers and promotions
  • eBay actively reaches out to name brands to sell directly on the platform (Amazon is doing something similar -but not as direct as eBay)
  • Although new products do sell on eBay, the platform works better for used, vintage and lower-cost art, antiques and collectibles
  • The buyer/seller experience on eBay is more personal, whereas when you sell something on Amazon, the buyer often thinks they are buying from Amazon -not an actual person
  • eBay support is OK when you finally get to someone, but eBay makes the process somewhat difficult to access

I am sure I missed a few points, but I believe the ones I have listed are the most important. The title of this article referred to where can I make the most money? So let's look at that.

The answer to that depends on your resources and your business model.

If your finances are limited, or you plan to specialize in used, vintage and lower-cost art, antiques and collectibles, then eBay may be the best place. But, if you have at least several hundred dollars to invest in new (wholesale) merchandise, then I suggest you look to Amazon.

Even if you start with eBay, I suggest you move to Amazon eventually. I say this for two reasons:

  1. 1. Amazon outsells eBay by a huge margin and even with their slightly higher fees, you will make far more money with the increased traffic and volume. Here is an example:

    I have a fast-selling product on Amazon that sells about 20 units per week with a net margin (after fees) of $7.29 per item (Total for the week = $145.80 net). This same item sells about 2 per week on eBay, but because of less competition and lower fees, my net is higher at $9.45 per item. However, on eBay my net is only $18.90 per week versus the $145.80 I net on Amazon. So even though I make $2.16 more on eBay on each item -I still make more money overall on Amazon (this example assumes shipping cost is a wash, which in fact it is pretty close)

  2. I am a strong believer in multi-channel selling because you don't want to have all your eggs in one basket. With both eBay and Amazon, it is fairly easy to make an honest mistake that results in getting your account suspended temporarily or permanently, so it's good to have a back-up sales channel.

It is mostly for this second reason that I recommend you not drop eBay for Amazon, but use both channels.

If you are going the route of selling used or vintage items, or Made in USA new items, you may also want to look at Etsy.com as your back-up sales channel.

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2. Making Smart Financial Choices

In the last issue I wrote an article about improving your personal cash flow by cutting expenses and finding ways to make some extra money. This article takes that one step further by looking at some of the financial choices we make:

The most common financial choice most people make starting at a young age, is to use debt to get the things you cannot afford. This means, the first choice we should all make is to get completely and permanently out of debt.

Let's look at a few numbers first and then some ways to go about doing this.

According to the US Federal Reserve, consumer household debt in the 2nd quarter of 2017, rose to $12.79 trillion, far above its peak in the third quarter of 2008 (The beginning of the recession). Student loans account for 10.6 percent of that total, up from 3.3 percent in 2003, while housing's share, though still great, has fallen back to 2003 levels. Credit card debt made up $1.2 trillion of that total, about $40,000 per person ($19,000 per household). As for student loans, just over 11% of all student loans are more than 90-days delinquent.

There is an old saying I believe in: "If you owe debt, then debt owns you." As someone who was a big spender and went deeply into debt when I was young (and through my early 40's), I can tell you that statement is true. One day I woke up and realized I had zero savings, and over 75% of my take-home pay was being spent to service debt (yet, had I wanted a new credit card it would have been very easy to get one).

That was the day my wife and I looked at each other and said "No more!" We vowed to get completely out of debt (including our mortgage), and started working on it that day. It took us about 7-years but we did it (including the mortgage).

Of course, not knowing any better, we did the usual things such as refinancing our mortgage and using the extra money to pay off our higher interest rate debt. That worked in our case because we had the discipline not to use the extra cash flow, but most people don't do this and end up using the extra cash flow and going deeper into debt.

I mentioned in the last issue that instead of looking at interest rates, pay off your debts with the lowest balance first. Then, add that payment amount to you next lowest debt and so on. This is a faster way to get out of debt than focusing on your high interest rate cards and debts. I know this sounds counterintuitive, but it has been proven to work and is the method recommended by most debt counselors.

If you are totally over your head, there are two other options: Personal Bankruptcy and Debt Consolation. In the old days, before the internet, bankruptcy was a real option -but no more. Ten or fifteen years ago, a bankruptcy could remain fairly private -but no longer. If you were to declare bankruptcy today, your friends, boss, neighbors and co-workers would know about it by the end of the week. I would only recommend Bankruptcy as a very last resort.

That leaves us with debt consolation. Even if you do this, it may become public, but debt consolation is much less onerous than bankruptcy.

Even with this method, you have to be careful. If you Google debt consolation, you will get several pages of results -most of them will vary from for-profit companies to outright scams. The only organization I suggest you deal with is the Non-profit, American Consumer Credit Counseling (ACCC). With more than 22 years of experience, accreditation with the Better Business Bureau with an A+ rating, and thousands of satisfied customers, they are the leader in the Non-profit Debt Consolidation industry. In addition to debt workout services, they also offer free consumer credit counseling and advice.

One more thing to be careful of is Credit Card workout companies. These companies negotiate reduced balance agreements with you unsecured creditors. This does work, but it puts a mark on your credit score that never goes away. By law, bankruptcy records disappear after 7-years, but when you negotiate a settlement that cuts your debt, the credit card company shows it as a default on your credit report -and there is no limit to how long that can stay.

NOTE: Many of the debt consolidation services that claim to be Non-profit -actually are not. In fact, many of them are outfits that overcharge and demand money up front.

When you work with nonprofit debt consolidation companies, you're not taking out a loan to pay off your bills. Instead, your credit counselor works with your creditors to consolidate your debt into one convenient monthly payment. In many cases, the amount you pay every month will be less than if you paid each bill separately. Often your counselor can even reduce the total amount you owe, your interest rates and eliminate extra fees.

When a debt management plan agreement is in place, you send your monthly payments to the debt consolidation company and they distribute the money to each creditor. This continues until all of the bills are paid in full. Your counselor also helps you establish a workable budget and provides other educational resources to help you manage your finances and remain debt-free.

Now, this does hurt your credit rating temporarily and limits your ability to borrow for a few years -but it's not as bad as bankruptcy or Credit Card workouts. Also - If you have a credit card you use to purchase business supplies or products to resell, just keep it out of the list you submit for the workout and it will remain active. If you don't use a credit card for business, I still suggest you keep one credit card (with no, or low balance) apart from the workout for emergencies (I mean real emergencies such as emergency dental work, doctor visits and so on).

Whichever method you choose, even if your consumer debt is manageable, start getting out of debt today. You will be amazed how much stress disappears once you do this.

I just told you to reduce or eliminate your debts and that should be your primary goal -but let's also look at the choices people make when they get into debt. Using a credit card to buy a new suit that you use for work, is a far better choice than paying for dinner, or an evening out. A good dinner lasts about an hour or so, but you will be making payments on it for months. Whereas, you should be able to wear your new suit for several years.

The next subject is payments. Fixed period loans such as car and furniture loans eventually go away. But, if you have a balance of even a few hundred dollars on a credit card, and make the minimum required payment, it can take up to 15 to 20 years to pay it off. And, if you keep making even small charges to your card, you will never pay it off. This is why you must always make more than the minimum payment.

Let's look at what is typically the largest debt we have - the mortgage on our home. I know that mortgage interest rates are low compared to other forms of debt, but this can be highly misleading.

What most people don't realize is that mortgage interest is front-loaded. In the first few years, as much as 97% of your payment goes towards interest, so your principal goes down very slowly. On a 30-year loan it can take as long as 20-years before a large percentage of your payment starts going towards the principal.

However, there is a way around this. Let's say your mortgage payment is $890 month, and after knocking down your other debts, you can afford an extra $150 month towards your mortgage. Doing that will cut years from your 30-year mortgage. When we got rid of our other debts, we started making double, and eventually triple mortgage payments and paid off our 30-year mortgage in just over 10 years total (but just 6 years after we started our plan).

Most mortgage companies have a place on their payment form where you can designate extra payments towards your principal. Always do this. If you don't, they will automatically charge it to the interest. If there is not a place for principal payments on the payment voucher, then make out two checks. One is for the normal payment. The second check is the extra you will pay towards the principal. Always put the words principal payment on the memo line on your checks.

Currently, mortgage interest rates are pretty low - averaging about 3.8%. If your current loan rate is at least 1% higher, then you should refinance immediately. This will free up cash that you can apply to the principal. If you don't think this is important, consider this: A 30-year, $200,000 mortgage at 4.9% will cost you $357,759 to pay off if you keep it the full 30-years, whereas the same amount at 3.8% will cost only $333,429 over the life of the loan.

That is a difference of $24,330 over the life of the loan. And, at the lower rate, if you reduce the principal amount by at least $15,000 within the first 10-years, you will pay off the loan in just 20 years instead of 30.

The difference in payments between the two rates is $117-month ($1,404-year). That may not sound like a lot of money these days, but if you apply all of that towards your principal each month, you can pay off the loan a lot faster.

The last item to consider when making smart financial choices is your spending.

  • Do you really need to move into a new home right now, or could you wait a couple years?
  • Do you really need that new pair of shoes or boots now -or can you wait, or do without?
  • Do you really need that new big screen TV right now, or could you wait a few months until you can pay cash? (Remember, consumer electronics prices fall as much as 40% after Christmas).
  • Do you really need the latest iPhone (or Android)? I have an iPhone 4S that works just fine. Upgrading to the new iPhone 8 or 10 will cost a lot of money.
  • Do I really need all those new features? I decided no, and will wait until the iPhone 12 comes out, then I will upgrade to an iPhone 8 which will be pretty cheap by then.

I could go on and on, but I think you get the idea.

I get email from people all the time who want to start an online business, but they just don't have the money to do it right. Doing some of the things mentioned above could get them in a better position within a month or two.

Admittedly, some of these folks are victims of their situation, such as someone who just became disabled, or the Mom with three kids whose husband just walked out on her. But there are plenty of folks out there, who just make poor financial choices.

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3. Is a Financial Meltdown Coming and How Will it Affect Online Sellers?

I originally wrote a long saga on the economy explaining why I thought a major correction in stocks and bonds (the decline in bonds has already started) was coming, but when I re-read the piece, it was too long and too technical, so I decided to start over.

One piece of advice I can give you is, listen to people like me and others who give financial advice, but then: Do your own research and make your own decisions.

OK, with that warning in mind, I am seeing many troubling signs that point to things going wrong soon (probably after the first of the year, but it could start sooner).

Bond performance is one of the most reliable predictors of the economy. As I mentioned above, long-term treasury bonds are already undergoing a serious correction, and I think this is just the beginning.

Look at these charts below. These are three of the top-performing Long-term Treasury bond funds with 10-year + maturity): Vanguard - VUSTX, Pimco - PEDIX and PFGAX.

As you can see all three of those are showing large declines since September. Because the bond market is about 4 times larger than the stock market, this is significant. Falling bond prices are pretty good predictors of a recession. This usually starts with high-yield corporate bonds (which some people call Junk Bonds) and then long-term Treasury bonds follow.

The Junk bond crash started in mid-October, so this time around the decline reversed itself with Treasury bonds falling first and Junk bonds about 4 weeks later. In all honesty, I have no idea what this means, but the overall bond picture worries me.

NOTE: Bond prices have an inverse relationship to interest rates. When interest rates rise, bond prices fall and vice versa.

One more thing: Another bond-related indicator is called the yield curve. It would take a long technical dissertation to explain, so I am not going to do it here. (Google the words yield curve if you want to know more). The yield curve is an excellent predictor of the economy, and, although not yet at a critical level, the trend is going in the wrong direction.

OK let's look at some recent economic statistics for October. There is both good news and bad news in the numbers:

  • Retail prices rose 0.1%
  • Store retail sales rose 0.2% compared to the same month last year
  • Wholesale prices rose 2.8% (That's an annualized rate of over 33%)
  • New home construction rose 13.7%
  • Auto loan delinquencies are now rising faster than any other category.
  • Student loans are defaulting at higher and higher rates (Currently 11% of all student loans are in default)

What does all of this mean to us online sellers?

Let's look at the numbers above first. A bit of good news is retail prices are increasing very slowly. This means inflation is low and low inflation means lower interest rates which is good for the economy.

On the other hand, wholesale prices are rising dramatically and this will hit retail sales prices within a few months. The huge jump in new home construction is also cause for concern. When construction increases, the basic materials such as copper, zinc, steel and concrete also go up. In fact, this has already started. Rising resource and material prices usually lead to serious inflation, which means the US Federal Reserve (Fed) will raise interest rates to cool off the economy.

As for student loan and auto loan defaults, this is not good because when this happens, credit is tightened and interest rates go up.

If the tax bill passes (in my opinion it will not), that will also spur the economy, which could lead to the Federal Reserve imposing higher rates.

As for retail store sales, a year-to-year growth rate of two tenths of a percent rate is horrible. Most Wall Street pundits blame this on increased online sales and customer's deserting shopping malls. Whichever, it is generally good for us online sellers.

If I am correct (and I might not be), we are in for some tough economic times. There is a correlation between the stock market and online sales: When the stock market falls more than 15%, online sales follow. When the market falls, or the economy slows down, people don't stop all buying, but buying really slows down. So, how do you prepare for this?

People will always buy the necessities, (food, diapers, toilet paper and so on). And, people rarely stop spending on their children and grandchildren. This means sales of baby items, toys and children's clothing, may slow down a bit -but not as much as things like jewelry, fashions and consumer electronics.

So, if you are concerned about a recession, or complete meltdown, then you may want to look at repositioning your inventory.

Finally, just to make my point: I used to know a retired woman who sells used children's clothing on eBay and Etsy. She is not a big time seller -just someone trying to supplement her social security income. She has been doing this since 2006. Most year's she would clear about $1400 a month profit, but in the recession of 2010, her monthly sales tripled and she started clearing almost $4000 a month.

It's not only used children's clothing that picks up -adults are looking to save money as well. Another woman I met at an eBay function sells only used blue jeans she sources from garage sales and thrift shops. She wouldn't give me any numbers, but told me her sales and profits more than quadrupled during the last recession.

Lastly, there is a used and vintage clothing store in my town. The owner also sells her clothes on Etsy. She told me, every time the economy slows down, her sales increase -both online and in the store.

There you have some real examples of people who do better in slow economic times by selling what people need -instead of impulse items.

As I said, I think we are in for some tough economic times, but you have to do your own research, and make your own decision. If you agree with me, start thinking about how you can re-position your business.

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4. How to Gain Admittance to Wholesale Trade Shows

There are several types of wholesale trade shows. There are industry specific shows such as The Consumer Electronics Show, The National Hardware Show and so on.

There are also general merchandise shows such as the ASD Show, and Gift Shows. Don't let the word gift put you off. A gift show will typically include many categories such as toys, kitchenware, art, jewelry, gourmet foods, private label sellers, health & beauty, fashion accessories and home & garden décor.

As you can imagine vendors who exhibit at wholesale trade shows do not want the general public into the show. First of all, those folks would waste their time -and they don't want the general public to see their wholesale pricing. So the companies that run trade shows set up barriers to make sure that only qualified resellers get in.

Wholesale trade shows are my primary (and my favorite) way to find wholesale products to resell

When you register at a trade show for the first time they will ask for several things:

  • Business card (You can get these cheaply online at Vista Print)
  • Resale Certificate - this is a document you get from your state when you get a sales tax number
  • Checkbook in your company's business name
  • Copy of an Invoice from a wholesale company

That last item is pretty rare - I have only been asked for that once, but the first three are pretty mandatory.

Advice for Attending Trade Shows

  • Carry purchase orders as many companies insist on these. You can get blank PO forms from any office supply store and just have a rubber stamp made with your company name and address and use that instead of having them printed, which is expensive.

  • Wear comfortable shoes and bring a small rolling bag to carry catalogs, as by the end of the show you will have about 20 pounds' worth.

  • Trade shows are a great way to find and research niche products

  • Dress appropriately -the business world calls "corporate casual." I typically wear slacks and a polo shirt or slacks, shirt and sweater if its wintertime.

  • Attend the talks and seminars - there is a lot of valuable information to be learned at these talks

  • If a vendor asks what you do, just say: "I am a small retailer from (name of your town or city)."

    If someone asks if I have a storefront I don't lie to them, but I don't volunteer that information. When you say you are a "retailer" most vendors usually assume you have a store.

  • Most vendors will offer show specials, but if you ask they will usually extend these to any orders placed within a week or two of the end of the show. Show specials typically include things such as free shipping, or 10% on any order over some dollars amount such as $500.

  • Be careful placing orders at the show. You really want to gather the information and take it home or back to your hotel and do some research first.

  • Take good notes and paperclip or staple business cards to catalogs you pick up. When you get home its easy to forget who sold what, and who the rep firm was for an item you are interested in.

  • If the show has gourmet foods, go hungry as almost every vendor will be offering free samples

  • Give yourself enough time to really see the show. Don't rush through -especially if this is your first or second show. Pace yourself and take plenty of breaks - shows can be really exhausting.

Follow these tips and you will have a successful show and have fun and meet a lot of people.

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5. Sourcing from Overseas - Importing

The first time you decide to import something can be really scary. Everyone has heard stories about people receiving containers fill with junk, surprise customs fees and duties, US customs seizing products and auctioning them off.

While it's true these things have happened to some, it's actually easy to avoid them and have a good (and profitable) importing experience.

The steps involved in importing include:

  • Identifying products to buy & sourcing product
  • Shipping to the US (or Canada, Europe, etc.)
  • Receiving and Clearing local customs
  • Delivering to your warehouse.

There are a few resources you can use to avoid problems:

  • Local Agent
  • Freight Forwarder
  • Customs Broker

Let's discuss all three.

A local agent can source products, inspect goods, and arrange shipping

An honest and reliable local agent can do several things for you: They can help you source products including negotiating the best prices, inspect your goods to make sure you get the quality and quantity you ordered, sending samples and arranging shipping. Most agents get a commission from the sourcing manufacturer, but charge fees for other activities.

I have two agents I use in Asia. Please feel free to contact them when you are ready to import. Every time I put their names in my newsletter, they get hundreds of inquiries -so please be patient if it takes a while for them to get back to you. If you have any questions about their fees or other services, please contact them -not me.

Note: These two agents do not work in the fashion industry. If you want to find an agent in the fashion industry, you can follow the instructions below.

If you want to find your own agent, just Google "Sales Agent + name of country. Such as "Sales agent China."

How and why to use a freight forwarder

The next step is shipping. For this you want to use a Freight Forwarder (FF). A Freight Forwarder is a company that specializes in getting quotes from different shippers, giving you the best quotes, and then arranging shipping and all export documentation. They do this for both air and ground (sea).

You can ship goods from overseas countries in one of two ways:

  • Ground (ocean, rail or truck))
  • Normal air freight on airlines or freight charter companies
  • Air, via services like FedEx, DHL or UPS. (These services are the most expensive way to ship and I almost never use them).

One thing you do not want to do is, ask the company who manufactured the product to arrange shipping for you. Why is that? First of all, those companies rarely have the expertise. Secondly, they often mark up the shipping, or use shippers who give them a kickback, and you have no way of knowing that.

If the shipment is fairly small, I often just ask my agent to get a quote and make arrangements for me. But if the shipment is large, contains multiple types of items, or is in any way complex -then I use a Freight Forwarder (FF). I do this for two reasons. They take care of all the paperwork and they usually get me the best rates.

Bringing it home with a Custom's Broker

The other service you are going to need when you import goods from overseas is a Custom's Broker (CB). A Custom's Broker is someone who specializes in receiving goods and shepherding them through the US Custom's process.

Their services include providing paperwork to clear customs, paying any customs duty for you, and some will arrange the final leg of shipment once your goods have cleared US customs. Custom's Brokers charge a fee that is typically in the $25 to $100 range depending on the size and variety of the shipment. They can also notify you if your product is subject to special restrictions or quotas that could cause problems. (Ask them this question before you commit to ordering a product -not after you have ordered it.

If you decide not to use a custom's broker, then you will have to go to the port, pay the duties before your shipment is released, handle the paperwork yourself and arrange shipment from the port to your warehouse.

So how do you find these services? You can Google the terms freight forwarder (FF) and customs broker. You will get hundreds of results. I suggest you use a FF with offices actually in the country you are shipping from and select a Customs Broker who has offices in the port city your goods will be received at.

I use a company called Universal Cargo. The reasons that I use Universal Cargo are threefold.

  1. They came highly recommended to me by another Amazon seller (and friend) that I trust.

  2. Universal Cargo is both a Freight Forwarder and Custom's Broker under one roof. This saves me both time and money.

  3. They have offices in all the major ports in Asia and the US so they can be "hands-on" with your shipment instead of doing it long distance.

I have used them for several shipments over the past three years and they have always done a fine job for me. Note: You can find cheaper services, but you get what you pay for. And, when it comes to importing, you want things done right.

Let me deal with one issue that causes Amazon sellers a problem (eBay sellers don't have this issue). That is: Importing from an overseas country direct to Amazon FBA. Don't do it. Here are the reasons:

  • If you order 500 or 1000 of something, then the entire shipment will go to Amazon at once, and you will be paying Amazon's high storage fees until they all sell.
  • Amazon has very specific procedures you must follow and specific freight Forwarders and Customs Brokers you must use. I have looked into these vendors and they are more expensive than the shippers, freight forwarders and Custom's brokers I use.
  • Also, many Chinese suppliers will ignore some of the details Amazon insists on. They think they know better and will do it their way. However, if any single procedure Amazon insists on is not followed, then they will just refuse the shipment (And now you really have problems)

What I prefer to do instead is, have my goods shipped to an Amazon Fulfillment company here in the US. The one I use, is My Fulfillment Team in Tennessee. But if you want to shop around, here is a past article from my newsletter that lists other fulfillment centers in the US (and one in the UK).

A fulfillment Company can receive your shipment and store it for less than Amazon charges. And when you are ready they can label and ship to Amazon on your behalf in quantities you specify.

Finally, a word about customs duties: They are usually a lot less than you expect. I rarely see duties that exceed 10% of the cost of my items.

So there you have it. Follow these steps and you can remove the risk of importing from overseas.

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6. New Wholesale Sources for eBay and Amazon Sellers

January is a popular month for wholesale gift & trade shows. Check with the convention center in your nearest major city to find the types of show and dates.

No matter how many times I point this out, some readers email me complaining that some of my sources are retail websites. Remember - Many of these websites do not show wholesale information because they do not want the general public to see it. When you run into this, simply use the Contact Us link to request reseller information. Or, some sites have links to wholesale information if you take the time to look for it.

AT Imports sells a wide range of Crafting supplies including stars, Tin Products, florals & Twig items and much more.

Earth Rugs sells all types of woven jute braided rugs including table accents, pet rugs and stair rugs. Watch their video on drop shipping and look for the link to Wholesale Registration

Peg and Awl make a really clever and fashionable bags specifically for artists who travel. Scroll to the bottom of the home page for a link to Wholesale inquiries.

The Country House Collection features a wide range of country products including linens, florals, French country and Wall décor.

Woodstock Chimes is not just beautiful Chimes, they also sell Rainbow Makers and a line of Children's Musical instruments

Studio-M has some really unique products including art poles, art pavers & planks and art planters

C.R. Gibson Wholesale sells a wide range of products but their Farmhouse Kitchen Collection of cooking-related paper products is hot this year.

Golden Thread is a luxury line of customizable jewelry hand-made in the USA

Skinny & Co. sells a large line of beauty products based on coconut oil

The DL Company sells a very nice line of Luxury candles in many styles.

J'Leen makes and sells crystal decorations, prisms, suncatchers, jewelry, and gifts featuring Swarovski crystals.

Crates & Pallet sells a very unique line of small shippable wood gift products.

Karma Scents sells beautiful candles, potpourri, incense, fragrance diffusers, oil burners and other scented products.

Honey & Me sells a nice line of grow able herb kits. Open a Wholesale account here.

That’s it for now. See you again after the holidays.

Skip McGrath
The eBay & Amazon Seller's News

P.S. If you missed the last issue, click here to read it.








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