There are buying strategies for buying if that is your end goal, but we’re assuming you’re here to learn how to buy to sell at a profit.
Obviously, in order to sell, you need to have things to sell – which in general you will have bought not too long ago. It is important to purchase early (ahead of your planned sales) and wait for the right time to auction merchandise. For example, don’t purchase an item and put it up on auction before it reaches you, for obvious reasons. For another example, unless it was a one-time deal, don’t put items up on eBay that you just bought. Your potential buyers can see what you paid, and that will disadvantage your pricing strategy.
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You need to decide what kinds of items to sell, before you can buy them. Fundamentally, whatever you choose should meet these requirements:
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Something with a consistent predictable demand
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Something that you know a lot about – or want to know a lot about
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Something that can routinely be sold at a profit
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Something that is not available to most people locally for a similar price
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Something that you have room to store and will not lose value over time
Once you start thinking about the categories of items you want to sell – and there are more or less unlimited categories on eBay – you’ll have a good idea of what you should look at buying for your “inventory.”
Think carefully before jumping into large volume purchases, even if the price seems good. Also research the specific type of item by searching past auctions. For example, we know one woman who had started a successful clothing business on eBay. She scoured the auction sites for odd lot deals on brand name merchandise in bulk, then she would sell them one at a time for a nice profit, in some cases 300% or more per item. One time she purchased an “amazing” deal on LaCoste (alligator) polo-style shirts, acquiring 144 – a gross – of them at a low price, around $8 each. Considering her local high-end retailer sold similar shirts for $48, this seemed too good to be true.
And it was. First, the lot was mixed colors and sizes. For example, the gross included 12 size smalls in bright yellow, and 12 size XXL in pink. These would be very hard to move. Second, these particular LaCoste shirts, while the genuine article, were made under license in Peru, not at the LaCoste factories in Europe. Some additional research showed that web discount shops sold these same shirts for about $20 all the time. So right there the profit was shrinking fast. And then you factor in the shipping on the 144 shirts, which was a couple hundred dollars, and the whole thing was basically a break-even pain in the rear.
The point is, first, know the market for your product and to the extent possible what you’re actually getting, and second, test the market with a few items to see how they do. Don’t buy 144 of anything unless you really know what you’re doing!
Next: Bidding strategies
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