Wholesale Product Sourcing Tips for eBay & Amazon Sellers
The eBay & Amazon Seller's News ~ August 28, 2018 ~ Volume 19, Issue No. 15
Tips, Tools, News and Wholesale Resources for eBay and Amazon Sellers
Are used books still a viable market on eBay and Amazon? My book, How to Sell Used Books on eBay, Amazon and the Internet for Profit has been one of my all-time best sellers with the lowest return rate of any of my books.
Now to answer the question: The answer is a resounding yes! The mainstay of the used book market is non-fiction books. There are two reasons for this:
Check out my book, How to Sell Used Books on eBay, Amazon and the Internet for Profit. Like all my books on this website, it comes with a 90-day money-back guarantee.
Used books are easy to source, they typically sell for excellent markups, and can provide a foundation for a large sustainable business on eBay, Amazon and other Internet sites. In fact, some of the largest sellers on eBay and Amazon are book sellers.
In the last few issues I told you about Kibly. They are a relatively new company that specializes in building seller feedback and product reviews on Amazon
In my 12 years of experience on Amazon, my average feedback left is about 1 out of every 100 or so orders. With Kibly I am seeing one feedback in every 4 or 5 orders and my product reviews have increased about 15%.
In the past I have recommended both Feedback Five and Feedback Genius. Both of them are good companies, but since switching to Kibly my performance has increased dramatically.
It has become common for shipping companies like UPS and FedEx to raise shipping prices during the holiday shipping season. This year FedEx is only charging extra for oversized items, and those that require special handling (i.e. wine, ammo and expensive items that require age verification and/or signature. All other residential items will be shipped at the regular year-round charges.
We are still waiting for UPS's announcement.
Over the years I have used just about every keyword tool on the market. Many of them are quite good at finding basic keywords, buy I have finally found one that finds the best long tail keywords. Why are long tail keywords important? Simply put, they are the cheapest ones you can buy or use. For example, if you were selling a fish filet knife, a good long tail keyword might be "best knife for filleting fish." That phrase would be a lot cheaper to buy than the words "fish filet knife."
The system is called Long Tail Pro and you can sign up monthly or save money with an annual plan. Best of all they have a$1 trial and a 100-day money back guarantee with nothing to return. Just contact them and say you want a refund.
Here are some of the things Long Tail Pro can do:
In the last issue I covered quarterly results for eBay and Amazon, but failed to mention Etsy. Well, Etsy also beat eBay and announced double-digit sales growth just over 20% for the second quarter. Their profits grew just over 30%. Although Etsy is still quite a bit smaller than eBay, their fast growth makes them a viable competitor.
Amazon recently made it slightly difficult to contact support, but it can still be done. Here's how:
1. First click in Help and when the window opens there is a link at the bottom of that window that says Contact Us.
2. Click on Contact Us and another window comes up that asks you to select between Selling on Amazon or Advertising or stores.
3. Select Selling on Amazon.
4. Once you do that a search box will open at the top of the page for you to ask a question. Simply type the words "Contact rep" in that box.
5. Now look back on the left and you will see a list of topics.
6. Go down the list and select My Account, and under that, click on Other Account Issues. When you do that, a support form will open. You will have the choice of chat, phone or email. I always have the best luck with email, because I get written instructions to fix my issue.
I don't know if you have noticed but eBay Seller hub has been acting glichy for the past week or so. Some pages just won't load at all, while others are very slow. You may not be seeing this, but I have experienced it in my account.
Amazon is expanding their own Private Label business. If you've looked at almost any clothing item, you will see a brand labeled Amazon Basics. And it goes beyond clothing into jewelry and other products as well (including electronics. I just bought a USB mouse that came with the Amazon Basic logo). Amazon is also reportedly developing their own brands of wine.
Apparently, Amazon saw how well their sellers were doing with Private Label and decided to jump on the bandwagon as well.
Lets get started with this month's in-depth articles:
In one of the Facebook Groups I am in; last week a new seller posted a question looking for advice. She said she had $2000 to invest in wholesale product and how should she best invest it? As you can imagine she got a lot of advice, but it got me to thinking that a lot of new sellers are in the same quandary.
You may not have $2000, but even if you only have a few hundred dollars, you face the same challenges. When your funds are limited, you really can't afford to make any mistakes. There is nothing worse than making a big investment in product and then finding out you cannot sell it at a profit on eBay or Amazon.
There are several types of sellers on eBay and Amazon. Many eBay sellers work exclusively in used, vintage and collectible merchandise. That venue has its own challenges and I am not going to address them here. What I am going to cover today relates to selling new merchandise sourced from wholesale sources.
Once again this breaks down into two groups: Those sellers who sell clearance and on-sale merchandise, and those who purchase from traditional wholesale vendors.
The first group practices Retail Arbitrage (a term coined by Chris Green). Retail arbitrage is where you buy clearance products from retail outlets to resell at higher prices online. Some of the more popular retailers used by eBay and Amazon sellers are Wal-Mart, Trader Joes, Big Lots, Costco and Sam's Club, Home Depot, Kohls and Target.
The other group buys new merchandise from traditional wholesale vendors that they find online, at wholesale trade shows or local wholesale merchandise marts. Before you start sourcing from these sources there are some things you need to know.
Most, but not all, wholesale vendors have both a minimum opening order (MOO) amount and a minimum re-order (MRO) amount. Some of them can be very low. One vendor I use has an opening order amount of $250 and $100 on re-orders. However, another one has a $1000 minimum opening order and a $250 minimum re-order.
The size of the MOO mostly depends on the price point of the product. Products that retail for under $25 will typically have small minimums, whereas expensive products (such as small appliances) will have higher amounts. That makes sense if you think about it. If Kitchen Aid had a $250 MOO, you would hit that if you only bought one or two appliances. If you were buying knives and pots and pans that are less expensive, then they have a lower MOO and lower MRO.
Purchasing a new product is always a risk. If you only have a small amount of money, then you want to spend a lot of time researching to find those vendors with no, or low, opening minimums. They are out there if you look. One of the kitchen product vendors I use has no minimums at all. After I met him at the ASD trade show, I bought one of each of two different knife sets. I put them on Amazon and none of them sold, so I lowered the price a bit, and both of them sold quickly.
I still made a profit, so I reordered the knife sets. But the point here is that I had less than $100 tied up in inventory for those two products. Had that vendor had a MOO of $500, I would probably have passed on those products since I didn't really have much experience with them. Or, I may have waited until just before Christmas to order, when those types of products sell much faster.
There is risk in everything we do when we sell online. But tying up money in non-selling or unprofitable products is one of the biggest. But, it's also the one risk that is highly manageable.
You know the old saying "Don't put all your eggs in one basket." Well that really applies here. If you had $1000 to $2000 to start out, you would want to spread that risk around and source several different products. Some of them will be winners and some will be losers. So you want to take the Wall Street Investor approach. Let your winners run and sell your losers quickly.
If you buy a product that doesn't sell at a price where you can make a good profit, then cut your losses quickly. Lower the price to get rid of them, and put that money to work with products that are making you money. I believe in this so strongly that I have been known to sell goods at below my cost just to get that capital working again. It doesn't happen often, but it does happen.
Here is an example: I am a huge fan of wholesale trade shows to source products. I like that I can actually meet the people I will be dealing with and assess their character. I can pick up the goods and examine them for quality and trade shows are where you see the really new products, so you can often be first to get them to market.
However, one of my rules for attending trade shows is that I rarely buy something right at the show. Instead I like to acquire the catalogs and price-lists and do my research when I get home. Many vendors offer trade show specials, but they will usually hold them open for at least a week or two after the show if you ask them to.
Back to my example: At the last ASD show, I bought some wooden puzzles that were on a 20% -off, plus free shipping show special. I asked the vendor if he would hold that open and he said no. The cost was so low (70% below MSRP), that I took a flyer and purchased $500 worth of the puzzles. That was months ago. I have lowered the price to near my cost and have still not sold even one set.
Pretty soon I am going to hit Amazon's 6-month limit on storage for products that are not selling and I will have to pull them out. Until then I will try lowering the price again and hope they sell. If not, I will have to pull them out and donate them to my local Kiwanis Thrift Shop for the tax deduction. That was an expensive lesson I hope most of you can avoid.
The lesson here is when you make rules for yourself, you should follow them. Had I followed my own policy of not buying right at the show, I would not have made that mistake
In my last issue I pointed out that eBay is once again struggling with growth in sales & profits. They are in the single digits while Amazon is enjoying double-digit growth.
So what was eBay's response? Raise fees and put more demands on sellers. The changes are occurring in three areas:
I am just going to list the updates as eBay put them out, then I will give my comments in italics at the end of each update.
This is one I am OK with. We have provided our contact info for years and it has always led to sales and/or prevented negative feedbacks.
As you know, PayPal is going away next year. The last time eBay tried to manage their own payment system it was a total disaster. eBay has been experiencing so many system issues and glitches that I have no faith in their ability to pull this off. I predict a disaster that is going to cost sellers lost sales and money.
This is another one I am OK with. Enhanced security is always better, but eBay needs a way to update your current listings to the new standard. Once again I do not have a lot of faith in their ability to do this.
eBay's answer to poor sales has always been fee increases. The two that bother me most are the Value Pak increases, as I have always been big users of those. Well no longer. So that is an area where eBay will actually lose fees from me.
The disappearance of free listings for non-store subscribers is another one that I think will come back to bite eBay because thousands of small casual sellers will just stop listing and move to other platform.
On September 15th, final-value fees for Books, DVDs and Movies (BVMD) will increase to 12% for Store subscribers and from 10% to 12% for non-Store sellers. This comes at a time when eBay's biggest rival Amazon is lowering prices and improving Prime deals. And, when eBay shut down its Half.com platform, it lost a lot of media business. This makes me wonder if one of eBay's long-term goals is to just get out of the books and media business and leave that to Amazon and Barnes & Noble.
Once again eBay appears to be shooting themselves in the foot. Raising fees while they make more demands on sellers. Let's next look at some of those demands.
This means eBay will be demanding UPC codes for more products.
This one really sucks. I have a few products I am now listing by category and have yet to make a sale because they no longer come up in search. And of course you will need the manufacturer's UPC codes to list these products, so that kills any bundling possibilities.
OK - Another one that's not that bad although it could affect used item sellers.
The problem here is that eBay has made it much easier for buyers to mark these fields and they will soon learn it makes items easier to return when they do.
Every seller should be entering tracking within 24-hours anyway. This one will hurt dropshipping sellers the most, because most dropshipping companies are notoriously slow to provide tracking.
Here again - a good idea if eBay can pull it off. This is the sort of project eBay has always had technical struggles with.
Well that's it. I must say given these changes, I will be evaluating if I want to bother staying with eBay. Compared to Amazon, my eBay sales are already so low it may no longer make sense. However, that is me. There are plenty of sellers still doing quite well on eBay. I plan to make that decision as these changes roll out. Should I decide to leave eBay altogether, I will just kill my eBay book titles and concentrate on Amazon, Etsy and other selling venues.
I know it's only August, but now is the time to get ready for the 4 th quarter. Remember these facts:
Another important thing to remember is to always overestimate the volume of products that will sell. I overestimate every year, and still come up short and run out of hot selling items.
The best use of the month of August is to start researching and planning what you will sell. Get your orders into your suppliers by early September so you will receive everything you order, and everything will arrive in time.
If you use FBA, remember that storage fees increase in the 4th quarter, so try and time your shipping to Amazon just right. I like to send my shipments in around October 1st. Amazon is already slowing down a bit by then but its not too bad. Last year my shipments arrived in 5 to 7 days and it only took 2 days to receive them.
There is one drawback to waiting that long. There are folks who start their Christmas shopping as early as late September and you will miss those sales.
One last thing, I strongly suggest is that you use FBA. Remember FBA offers free 2-day shipping to members and there are a lot of folks who wait until the last minute to do their Christmas shopping. Since the first month of FBA is free, there are a lot of folks who sign up in December.
Also, all other things being equal, Amazon will put the Prime eligible (i.e. FBA) products in the buy box.
The answer to that question is "maybe." It is no surprise that search engines such as Google, Bing and Yahoo now favor major shopping sites in their results for most popular products.
Here is an example of the results I saw when I typed in Chef Knife Set on Google:
You can see that most of the results are large shopping sites. Now let's type in a really narrow niche such as collectible metal toy soldiers.
As you can see, although you still get a few results from sites like eBay and Amazon, they are lower down the page and the top results are smaller independent web sites.
So the lesson here is: Yes, a website makes sense if you are selling a product in a very narrow or highly specialized niche, then it could make sense to have your own independent website.
There is another potential reason to have a website. There are some wholesale vendors who want to see a website before they will sell to you. In addition, Amazon often asks to see a website with actual products on it before they will approve you for a new category. (One thing they are looking for is to see if your images are Amazon compliant, so always make sure they are).
If you are setting up a website for either of these reasons, then Shopify is probably the easiest way to go and it has the added advantage that you might get some sales because Google often picks up Shopify results.
You set your price and then another seller comes in a few cents less to win the buy box. So you do the same thing and he or she comes right back. If this is happening less than hourly, you are probably up against an automatic repricer.
Tactic #1 - The first thing you want you do before repricing is look at the other seller's account and determine if they are in FBA. First look at their feedback and account metrics. If their feedback is poor, just go ahead and set your price higher than theirs and you will most likely win the buy box (unless yours is also poor).
You see one of the major factors Amazon takes into account when determining who wins the buy box, is the account metrics of the sellers. A seller with poor account metrics will almost never win the buy box -no matter how low their price. For example, my current 90-day feedback is 100%. I have a competitor whose feedback is 88%, selling the exact same product for 20% below my price. Yet, I own the buy box 100% of the time.
Also, Amazon tends to favor FBA sellers when awarding the buy box.
Tactic #2 - Many of the automatic repricers are only triggered when the price is either matched exactly or at least 1 penny less. Therefore, try placing you price at 1-penny more. In many cases. Amazon doesn't notice this 1-penny difference and will take turns rotating both sellers into and out of the buy box.
Tactic #3 - If you are in FBA and up against a merchant-fulfilled seller, then you have a real advantage. Because so many Amazon members belong to Prime and get 2-day free shipping, and any seller with at least $25 in their shopping cart, if your product is in an FBA warehouse, Amazon considers your shipping cost to be zero.
Therefore, if you price a product at $27.95 and your merchant-fulfilled seller's price at $24.95, you would think he would win the buy box. But this isn't always true. If you look more closely, you will see that his shipping cost is $4.90. That brings his total to $29.85. Since Amazon looks at the total cost including shipping, you are actually $1.87 cheaper because Amazon assumes your shipping cost will be zero.
Tactic #4 - If you can't beat them - join them. There are about 20 different Amazon Repricers on the market (Just Google "Amazon Repricer). Carefully examine all the features and fees. The key to using a repricer is determining just how low you can -or want, to go. Don't get yourself in a situation where you start losing money.
Doodle Pants are a line of clever funny designed pants for toddlers and small kids. Click on the link at the bottom of the page that says Become a Retailer.
RG Styles sells a line of inflatable furniture and other designer home products.
Pacific Silk Plants sells a large line of silk plants of all kinds.
Love Bug Apparel sells a wide line of attractive tee shirts with clever slogans
The World's Softest Sock was born from one single thought… Softness. From this simple beginning, they have become Crescent's fastest growing brand. They carry a complete line of socks for any occasion.
The Milkhouse Candle Co carries a wide range of attractive candles.
Forte Chocolates makes and sells wholesale Hand-crafted chocolates and confections from award-winning Master Chocolatier Karen Neugebauer. Made in the beautiful Skagit Valley in Washington State (Home of the largest Tulip Festival in the United States).
Nika International designs and manufactures animated musical and talking stuffed toys. Great sound quality, synchro-motion technology. Alkaline batteries included.
Bite-Lite LLC serves the public's needs for natural mosquito control and the management of biting insects. They manufacturer a line of all-natural mosquito and other insect-control products.
The codex club (i.e. the book club) started as a greeting card line with a few creative friends. This became t-shirts, dresses, candles, tea towels and more -all digital designed and printed products.
Hankook Chinaware started off as a small high-end pottery factory in South Korea and is now used in homes all around the world. They export beautiful pottery of all types to over 80 countries including the US, Canada and Eurozone countries.
FunkyRandy Birdhouses are completely handmade in the USA. Original weatherproof designs made from 100% Cedar. Secure online ordering. FunkyRandy is an official supplier to Wild Birds Unlimited stores.
Clarity is a New Age social dice game with 216 abstract cards designed by artist Melissa Behr. Roll a die while concentrating on something you want clarity on. Then pick a card from corresponding category: Mental; Emotional; Spiritual; Physical; Past or Future.
Southern Elegance Candle Co . makes candles that are poured deep in the heart of North Carolina. (All made in USA). Each small batch is meticulously poured by hand to ensure you receive the highest quality candle possible.
Nashville Wraps is a wholesale Gift wrapping distributor who make almost all their products in the USA
Not a Wholesale Source -but two Cash & Carry Trade Shows:
Unlike most trade shows where you just place orders, these are cash & carry, so you need a truck or SUV to take the goods with you. Also, many of these vendors do not take credit cards, so you really do need to carry some cash (in a safe place).
Other upcoming trade shows (Not cash & carry):
See you again in a couple of weeks.
P.S. If you missed the last issue, click here to read it.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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