How to Make Money Selling Products with No Profit Margin

How to Make Money Selling Products with No Profit Margin

April 5th, 2012

Have you ever bought a Printer for your computer, and wondered why you have to buy the Printer Ink separately? Ever bought a television, and then had to go buy the cables you need for it separately?

These are just two small examples of how the big chain stores actually make their profits in the Electronics market.

The Electronics market on the Internet is very often the first thing that newcomers to online business try to get into. It’s flashy and cool, and everybody says it’s the hottest market on the Internet. Well, maybe it is, but when you have, say, 100,000 people buying Electronics online every day, and 120,000 people selling them, none of the sellers are going to make much money.

It’s a pretty well saturated market, as has been for a long time. Most newcomers look at the wholesale pricing they get from Electronics Drop Shippers and other wholesalers, and complain that the prices are too high.

But they’re not. When you work with legitimate wholesalers like the ones you find in our Certified Directory, the prices are right where they should be.

The thing that most people don’t understand is that not only is Electronics highly competitive, which drives the profit margins down, it’s also an Accessory and Service Plan Market, and always has been. That means that the profits are not so much in the products themselves, but in the Accessories and the Service Plans that get sold with them!

Of course, you’re probably not going to be selling Service Plans for the products you sell on your website or eBay Auctions. So, let’s go back to the Printer Cable.

You can get a great printer for a good price at places like Best Buy. But, you can’t print anything until you buy the Cable, the Ink, and the Paper! And once again, that’s where Best Buy makes their money.

You can do the same thing. If you feel that you must sell in highly competitive markets, look at the products you’re selling, and think about the kinds of accessories that can go with them. Then, create package deals that you can sell on your Stores and Auctions. That’s how people who ARE making money in Electronics are MAKING that money!

Talk to your Supplier. Ask them what they carry that you can use to accessorize the products you sell, no matter what market you’re in. I guarantee you’ll find that the accessories carry a higher profit margin than the base products themselves, and that’s where you’ll make your money.

Creative Commons License photo credit: Peter Kaminski

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  1. I enjoyed reading your blog and I wanted to tell you that I fully agree with you. It’s tricky to seek out those that think alike these days. Keep it up

    Comment by promote your band — April 14, 2012 @ 11:23 pm

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    Comment by Yu Trojanowski — April 18, 2012 @ 10:29 pm

  3. Very interesting subject, thanks for putting up.

    Comment by Cornelius Cabral — April 22, 2012 @ 3:56 am

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    Comment by Clyde S. — July 10, 2012 @ 2:05 pm

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    Comment by Troy N. — April 17, 2013 @ 12:38 pm

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