Sunday, October 24

Why Are My Wholesale Prices Below eBay Prices?

Here is my list of guidelines to follow when comparing your wholesale prices with prices found on eBay.

Compare prices with brand new products only

As you know eBay is a place where you can sell just about anything and in any condition. Many people make the common mistake of comparing prices found on eBay for used or “like new” items.

When you compare pricing found on eBay always make sure to choose products that are brand new only and in the original sealed box. You can also look for a confirmation of a manufacturer warranty, which is typically for 1 year. This is will confirm that the item is indeed brand new. Comparing prices with used or “like new” items will not be an accurate price comparison.

Many sellers also sell refurbished products, which may be confused as brand new products. Refurbished products are defective products that were returned to the manufacturer, then fixed and repaired and put on the market again for a lower price.

Compare prices including the shipping

Many eBay sellers will attempt to lure you into their auction by advertising a lower selling price however will inflate the shipping cost to compensate for the difference. When you compare prices, always make sure to look at their shipping and handling cost as well. Simply add the shipping and handling to the selling price of the item to get an accurate total cost. The import price that you need to compare is the actual total cost.

Compare prices with the BUY IT NOW only

Many sellers will make the mistake of looking for auctions on eBay to compare prices without specifying searching for auctions with BUY IT NOW prices only. This can lead to confusion, as some people will compare the current bid price with the wholesale price of the supplier. This is not an accurate way of comparing prices since auctions may well have reserve prices on their auctions which may result in the auction to not sell if the reserve price is not meet. To avoid this confusion simply compare prices with auctions that have a BUY IT NOW price only.

Compare the wholesale price with the average prices only

When you compare your wholesale cost with the prices found on eBay, please always look at the selling prices of at least 4 or 5 items and calculate the average selling price of those auctions. Many people make the mistake of looking at the lowest prices only. These can be very misleading because not everyone will buy the absolute lowest priced items on eBay. In many cases those auctions are placed by people that already bought an items and changed their mind and are trying to get rid of the item by selling it below cost on eBay. The fact of the matter is that in such cases those low priced items will no longer be available once the auction is sold. You need to look for auctions that sell the same product over an over with a consistent selling price and always keep in mind that not everyone will buy the cheapest items on eBay.

Buying in large bulk

If you have applied the technique mentioned above and you still find auctions with prices lower than your wholesale cost, then those auctions might originate from sellers that are buying the item in large bulk at a discounted price. This can definitely provide you with a market advantage however this requires an up front investment as opposed to selling dropship products.

Suppliers liquidating their products

There are cases when you simply cannot compete. In some cases you might find that the prices are simply not possible to beat and this may occur in cases when a large store decides to liquidate their products. Have you ever walked into Walmart to find that DVD player at 70% discount? This happens all the time. In cases like this unfortunately there is no way to compete and you should simply move on to a different product to sell however always keep in mind that such liquidations are always temporary and will last only until the inventory is depleted.

Avoid Products from China

These days many people sell products from China, which are very difficult to compete with. In my personal experience I have seen a large number of return requests for products that are shipped directly from China and in some cases custom charges may apply at the time of delivery.

When you compare prices with items sold on eBay please always make sure that you are choosing auctions for products that are physically located in the USA. Avoid comparing prices with items shipped from China or any other country other than the USA.

Case Study

One time I knew of a lady that made tons of sells on eBay selling a very simple product. Out of all the millions of products available from drop ship supplier, this lady had chosen to sell one single item only. The item she had chosen was a “fish aquarium heater” which was something I had never head of before. It turns out that this item was in very high demand and her sales kept pouring in for a several months. She then moved on to a different item and kept the sales momentum going by choosing a different item every 6 months or so.