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What is Drop Shipping?

Sell what Sells, NOT what's Cool

The Wholesale Misconception

Don't Get Taken by a Fake Suppli...

Wolves in Wholesale Suppliers' C...

Working Within the Process

Is Santa's Sleigh Big Enough for...

Beware of Drop Shipping 'Agents'...

Direct From The Factory?

4 Strategies for Seasonal Sellin...

3 Tools for Product Sourcing on ...

Tradeshows the Right Way - How t...

Tradeshow Sourcing - When the Sh...

Preparing for the Holiday Season...

What a Wholesale Supplier Expect...

Product Sourcing Using Trade Pub...

Tips for Finding and Getting Goo...

Storage Units Auctions - Buying ...

Starting an Antiques and Collect...

How EBay PowerSellers Source Pro...

How to Build Your Online Consign...

Dangerous Mindsets - Changing th...

Sourcing Customer Returns - Buyi...

Product Sourcing Strategies - Ne...

6 Common Product Sourcing Questi...

Increasing Your Profits through ...

Importing Basics - What You Need...

Selecting and Changing Your Prod...

The Inside Scoop on Trade Shows ...

How to Make Product Liquidation ...

Shopping with Uncle Sam - A Brea...

One Man's Trash... Could Be Your...

Our Town - Sourcing Products Loc...

An Intro to Closeouts - A Produc...

How to Find Authentic Suppliers ...

Beyond Borders - Sourcing Overse...

Heads or Tails? - How to Find Yo...

Five Holiday Trends - What Every...

Seeing the Whole Picture - A Who...

Drop Shipping Pros and Cons - th...

Far From Home - 4 Keys to Succes...

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The Ins and Outs of Importing - ...

How to Choose Your Product Lineu...

The Fine Art of Product Sourcing...

Sourcing The Secondary Market - ...

Local Sourcing Techniques - Prod...

Global Sourcing - Importing for ...

A Foreign Affair - Preparing to ...

Choose Wisely - How to a Pick Pr...

Made in China - Importing Option...

The Color of Money - How Color T...

The Nuts and Bolts of Liquidatio...

How to Break Into Importing - An...

Trend or Fad? What to Ask Before...

What Your Country Can Do for You...

Opportunities Abroad - China Sou...

Trade Shows Year-Round - What Pe...

5 Product Trends for 2008 that E...

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5 Strategies for Safely Sourcing...

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Sourcing The Secondary Market - Buying Liquidations, Overstocks and More

by Chris Malta

It's estimated that, by 2008, there will be $63 billion dollars in obsolete merchandise in the US market. These goods aren't unusable; most still have a great deal of life left. And that fact presents a tremendous opportunity for online sellers. Because, while these items are no longer the latest, flashiest models available, there's still a market for them – one with a great deal of profit potential.

Business-to-business (B2B) auction web sites provide E-Biz owners access to large retailers' overstocks and excess inventory. Says Bill Angrick, CEO of bulk auction site Liquidation.com, "Online sellers and E-Biz owners are always in need of new product sources. With B2B auctions, you're getting below-wholesale price points that let you compete in the marketplace."

Performing Due Diligence
To use an auction site effectively, start by conducting market research. First, review the goods you're interested in and gauge the price at which you can resell them. Factor in the costs related to repackaging or refurbishing the inventory, shipping costs, and any buyer's premiums. Determine the profit margin you need to make; and from there, work backwards to figure out the maximum amount you can bid on a lot.

Signs of a Good Site
Don't stop at researching the products – you also need to scrutinize the sites you're sourcing from.

Ask lots of questions:

  • Are they reputable? The same things you want in a traditional business relationship apply to an online marketplace: do they have a demonstrated relationship with their product sources? Can you find a physical location for the business that supports them or place a direct call to reach their customer service?


  • Do they have efficient shipping? You should be able to obtain shipping quotes, so you can figure out the total cost of goods before placing your bid. Some sites can ship your products from multiple geographic locations, a service which helps reduce your freight costs.


  • Do they have a secure settlement and transaction support service? Look for a site that can handle multiple forms of payment, and make sure they won't release your payment to the seller until after you've received and examined the goods.


  • Do they provide in-depth product information and history? You want to know where your product is from, how many SKUs, the total quantity, the condition category (shelf pulls, returns, salvage, etc.), and any technical information – the more details, the better.


  • Do they offer proxy bidding? Some sites have a system in place that allows you to set your maximum bid, and then automatically bids for you up to that amount. Proxy bidding can save you time and help you stay disciplined in what you're willing to pay for your goods.


  • Do they give you the ability to conduct complete product research? Can you search for items by keyword, category, quantity, condition, geographic location, etc? Do they have automated communications to keep you apprised of lots that meet your purchase criteria?


  • Do they give you quick access to your buys? While you want enough time to perform due diligence, you also want to have speedy access to your goods so you can move them forward to resale.
As long as you're doing your homework and making informed buying decisions, the online B2B marketplace gives you a great tool for sourcing inventory. Says Angrick, "If you've got a portal to all this product, at below-wholesale costs, that you can remarket online, then you have a powerful resource for growing your E-Biz and supplementing your regular product line-up."
 
Archive List

ARTICLE ARCHIVE LIST

 

What is Drop Shipping?

Sell what Sells, NOT what's Cool

The Wholesale Misconception

Don't Get Taken by a Fake Suppli...

Wolves in Wholesale Suppliers' C...

Working Within the Process

Is Santa's Sleigh Big Enough for...

Beware of Drop Shipping 'Agents'...

Direct From The Factory?

4 Strategies for Seasonal Sellin...

3 Tools for Product Sourcing on ...

Tradeshows the Right Way - How t...

Tradeshow Sourcing - When the Sh...

Preparing for the Holiday Season...

What a Wholesale Supplier Expect...

Product Sourcing Using Trade Pub...

Tips for Finding and Getting Goo...

Storage Units Auctions - Buying ...

Starting an Antiques and Collect...

How EBay PowerSellers Source Pro...

How to Build Your Online Consign...

Dangerous Mindsets - Changing th...

Sourcing Customer Returns - Buyi...

Product Sourcing Strategies - Ne...

6 Common Product Sourcing Questi...

Increasing Your Profits through ...

Importing Basics - What You Need...

Selecting and Changing Your Prod...

The Inside Scoop on Trade Shows ...

How to Make Product Liquidation ...

Shopping with Uncle Sam - A Brea...

One Man's Trash... Could Be Your...

Our Town - Sourcing Products Loc...

An Intro to Closeouts - A Produc...

How to Find Authentic Suppliers ...

Beyond Borders - Sourcing Overse...

Heads or Tails? - How to Find Yo...

Five Holiday Trends - What Every...

Seeing the Whole Picture - A Who...

Drop Shipping Pros and Cons - th...

Far From Home - 4 Keys to Succes...

Product Sourcing Strategies for ...

The Ins and Outs of Importing - ...

How to Choose Your Product Lineu...

The Fine Art of Product Sourcing...

Sourcing The Secondary Market - ...

Local Sourcing Techniques - Prod...

Global Sourcing - Importing for ...

A Foreign Affair - Preparing to ...

Choose Wisely - How to a Pick Pr...

Made in China - Importing Option...

The Color of Money - How Color T...

The Nuts and Bolts of Liquidatio...

How to Break Into Importing - An...

Trend or Fad? What to Ask Before...

What Your Country Can Do for You...

Opportunities Abroad - China Sou...

Trade Shows Year-Round - What Pe...

5 Product Trends for 2008 that E...

Successfully Negotiating with Yo...

5 Strategies for Safely Sourcing...

Informed Compliance for e-Tailer...

Locate Qualified Drop Shippers f...

What is Product Sourcing? The So...

Where Do I Find Products to Sell...

Tips for Finding and Working wit...

A Beginner's Guide to Buying Dir...