I don’t know what kind of product(s) I might sell, and that will be the topic of the next post.  The main steps for starting this business will be as laid out below:

1. Choose a product to sell.
2. Find a source for that product. (Part of the decision-making process above.)
3. Pick a domain name that is relevant to the product.
4. Build the site to sell the product(s).
5. Choose a way to receive payments.
6. Determine pricing. Price from suppliers vs. desired profit margin.
7. Advertise and Market our products.
8. Collect the riches.
9. Serve the customers.

I’m sure there will be many items added to that list as this project progresses.  Hopefully, there will be many comments so this can become more of a community project than simply me starting yet another website.

If you’re interested in following along, I encourage you to subscribe to my RSS feed.  That way, you’ll get each step of the process automatically delivered to your reader.  If you read a lot of blogs and you don’t know what RSS is, I suggest you find a reader/aggregator that you like and start subscribing.  (Starting with the SellWholesale blog wouldn’t be such a bad thing.)

They have thousands of wholesalers, drop shippers, liquidation companies, and manufacturers that you can purchase from directly.  The real power is that you can ask the community for advice before you make a purchase from any of the suppliers.  With this safety net, you can be more confident that you won’t get scammed or ripped off.  And as always, if you have any other questions, you could always leave it in the comments here.  I love to help out other small business owners.  (And those hoping to get into online business.)

I’d like to write more about SaleHoo.com, but they have a sales page that really lays it out for you.  After you’ve skimmed the sales page and testimonials, I highly recommend the 3-minute tour.  They have blue links every so often on their sales page.  Just click one of those to review the highlights of the site.

There is a fee to join the site, but I think it’s really reasonable.  As I was reading about it, I expected $199 or maybe $99, but I was surprised to find that it was only $67.  If you get to the checkout page, you’ll see that the price is listed as $147, and there’s a second line item which is a discount of $80.  I don’t know if they ever actually charged that price, but I personally think it’s confusing enough to turn some people away.  Don’t be one of those people!  It’s only $67, and if you’re really looking into buying and selling wholesale products, I think this would be a really great resource.

I’m just afraid that you won’t need ME anymore.  

(In case you missed the links, click here for the SaleHoo.com sales page.)

The first source I found was LightInTheBox.com.  I’ve had a few people ask whether LightInTheBox.com was a scam, but unfortunately, I haven’t been able to verify them one way or the other.  If anyone has had an experience with LightInTheBox, please leave us a comment about your experience.

LightInTheBox.com is a wholesaler of products made in China.  The nice thing is that they offer a wide range of unique products.  The drawback is that most of the products aren’t name-brand.  Another good thing is that their minimum order for some products starts as low as 1 item.  Unfortunately, their prices are nearly as high as retail.  Honestly, as I review more of their products, I’m becoming much less impressed.  Specifically, they offer the “HiPhone” which is an iPhone knockoff.  This phone is clearly a total ripoff of the iPhone, so I have to question if there’s copyright infringement going on here.  The screenshots are either pictures of an actual iPhone, or they copied the design so perfectly (and used the same graphics on the phone), that you can’t tell the difference.  I didn’t mean to spend so much time on this product, but this product alone makes me question the legality of the entire site.  I would be very interested to hear if anyone has experience with this site.

Another source for cell phone accessories is CellularOutfitter.com.  They seem to actually have partnerships with the major cell phone brands.  The prices for their accessories seem reasonable, but still on the high side to be calling them “wholesale”.

If you’re looking for Micro SD cards or adapters, this is NOT the place to get them.  Their wholesale prices are over $20 for most cards.  You can find 2GB Micro SD cards with multiple adapters for less than $10 on TigerDirect.com or NewEgg.com.  Please do not patronize the major cell phone companies that are selling these things for $30 or $50.  That’s ridiculous!

After this bit of research, I’m going to go with what I expected to say in the first place.  If you want to buy cell phones at prices cheap enough to resell, you’ll have to strike a deal with the manufacturer or one of their authorized distributors.  All of the prices I’ve seen are ok if you want to get yourself an unlocked cell phone at a decent price.  However, if you’re really looking to sell cell phones, don’t expect to easily find a source online.

The moral of the story is that you absolutely must not buy accessories at the cell phone provider’s store.  (ie, Verizon, Sprint, AT&T…)  The markup is absolutely outrageous and you’d just be throwing your money away on an impulse purchase.  If you want cell phone accessories on the cheap, the sites above should be enough to get you started.

I found a list of halloween costume suppliers at GlobalSources.com.  The two main suppliers seem to be HuaMin and Leadtex Clothing.  In total, there are just over 100 halloween costume items available for sale.  There’s a good mix of full costumes, small masks, and latex masks.  You won’t find the “brand-name” costumes, but there is a nice selection of generic costumes and masks available.  If you’re looking to get started selling halloween costumes, this may be a good place to start.

I started by searching for “wholesale halloween candy” but was quickly disappointed.  It looks like there are many “wholesale” candy distributors, but they all had 2 problems.

1. Their websites are terrible. Coming from a web development background, that’s the first thing I see when I visit a site.  I realize that might not have anything to do with how good their business is, but it’s my first impression and so far it’s all been bad.

2. The prices really aren’t that great.  One site had 48 Snickers bars for $41.  That’s barely below retail, if at all.  You can go to any grocery store and buy regular candy bars for a dollar.  After you add shipping, the deal gets even worse.

I was surprised to find that Amazon.com had a listing for 48 Snickers bars for $28.80.  The shipping is $7.50, but we’re still well below $1 per bar.  It was an Amazon storefront run by “TheOnlineCandyShop”.

It appears that a quick search on Amazon can find just about any candy you’re looking for, at wholesale prices.  I’d love to say I knew of a small business website that could provide good prices for wholesale halloween candy, but so far, I’d say go to Amazon and search there.  Fortunately, most of the products you find are offered by individuals or small businesses with storefronts on Amazon.

I was hoping to save this post for October, but I hope it helps for those of you who are stocking up on Halloween candy.  If you know of a better source for wholesale candy, please let us know in the comments.  I’d be happy to give them a link.

Happy Halloween!

Let’s pose this question in two scenarios:

1. If you were having a product manufactured, what country would you use?

2. If you were buying a truckload of wholesale merchandise, what country would you use?

If you have a preference, please post it in the comments and let us know why you made your choice.

What is Liquidation.com?

Liquidation.com is an auction site that specializes in wholesale merchandise. They carry everything from jewelry to computers to tools to industrial ovens. Don’t expect to buy 1 item here unless of course it’s an industrial oven or a truck. (Yes, they also have wholesale lots of cars and trucks.) Most lots consist of 50 to 100 pieces. The site is very active and always seems to have an abundance of merchandise to choose from. Their stock ticker is LQDT for all you financial analysts out there.

What kinds of products are they offering and how do the prices compare?

They offer new, used, returned, refurbished, and salvaged merchandise. Most have the disclaimer that all sales are as-is. Meaning, those 20 lcd monitors you just bought for $100 might not actually work. It’s up to you to check out the products before placing your bid. This is my official warning for you to read the fine print and do a reality check before placing any bids. There is a nice selection of merchandise on this site, but you still need to watch out for the duds.

Do they have name brand merchandise?

Yes. A quick scan shows that they carry products from Dell, Apple, HP, Compaq, Samsung, and a slew of other name brands. (Sorry, that was my techie side showing. You’ll also see brands like: Coach, Kenneth Cole, Movado, and Rocawear.)

Do they have the products that are in demand?

Yes, the products you’ll find there are the types of products that are in demand. Web cams, LCD TVs, purses, jewelry, and consumer electronics are all found at Liquidation.com. Their most popular category is consumer electronics with jewelry and watches coming in a close second. The electronics products generally aren’t the latest models, but you’ll see that the prices take that into account.

How are their prices?  Is there room for markup?

This is an auction site, so the products go for the price you bid. Popular products may get bid up to fairly high amounts, but if you do your research before bidding, you should be able to set a budget and stick to it. $100 for 10 digital cameras might be a great deal, but $1200 not so much. There are tons of great deals to be found on this site, but again you need to watch out for the duds.

How is the shipping?

Liquidation.com has warehouses all over the United States so you should be able to find items at a location near you. This will help immensely when shipping large wholesale lots. This is another area that can catch you off guard. For large and cheap items, the shipping could exceed the amount paid for the product itself. They have links on the auction pages so you can get shipping quotes or ask questions before placing your bid. DO THIS! Those monitors won’t be a great deal if you have to pay $1000 for shipping.

How is their customer service?

I was surprised to find actual email addresses available on their contact page. You can easily email or call their support or service departments with any questions. They also give the phone number to their headquarters which you can call from 9AM to 6PM Eastern time. (Actual customer service test to be posted soon.)

Summary of Liquidation.com

I think Liquidation.com is an excellent place to get started with wholesale merchandise. You can easily browse the products and prices without having to commit to anything. With the power of the Internet, you can find a product on Liquidation.com, open Google in a new window and search for the current price. I also recommend searching Ebay for the product to determine the going price and scope out your competition. If the market is flooded with $2 auctions for your product, just look for another product.

Registration is free and allows you to ask your questions to the sellers.  Don’t be afraid to ask tough questions.  Once you win an auction, you’re responsible for what you bought.  Whether you just want to get started selling wholesale products or you just want to sell a few things on Ebay, I think Liquidation.com is a great place to test the waters. Click here to register for a free account.

Disclosure:  I have an affiliate account with Liquidation.com.  If you sign up for an account through a link on SellWholesale.com I might receive some compensation.  I hope you found the review useful and if you do sign up for an account at Liquidation.com I hope you use the links on this page.  Every bit of compensation helps keep this site online.

You have many choices for how and where to sell your products, but the product you’re selling has a great impact on where you should concentrate your efforts.

Ebay

The easiest and least cost-prohibitive route for selling things online is to use an auction site, like Ebay.  You technically don’t even need to know any html to list your item.  However, adding pictures and a bit of html and styling will help tremendously.  The cost for a listing is very reasonable, even if you have to pay a small percentage of your sale price.

Once you have your listing up, you simply wait for bidders.  As buyers find your product, they’ll (in theory) place a bid of the max amount they would pay for it.  However, the “price” of the product only goes up by a small increment.  For example, if a product is selling for $1 and I bid $20, the price would only go up to $1.50.  If someone else bid $5 after me, my bid would automatically increase to $5.50 because my max bid was higher than theirs.  (prices are estimates. I’ll have an Ebay primer soon with more exact information.)

When the auction ends, the highest bidder wins.

That’s it!  Buy your products at wholesale prices…Sell them for a higher price on Ebay…Reap the profits!  What could be easier?

Website

Starting your own ecommerce website is *almost* as easy as selling on ebay.  The steps for gettings started are:

• Choose a domain:  This is the name of the website where visitors will go to buy your product.
• Buy Hosting: To put up a website, you need to pay someone to host the files for you.
• Build your Website: Design it yourself, or use a 3rd-party system.
• Add your Products: Again, design the listing part yourself or add your products through the 3rd party software.
• Set up a payment system: Give your customers a quick and easy way to pay you.

That’s about it.  Now for a little mor detail.

1. Choosing a domain:

You’ll want a domain that is easy to remember and relates very obviously to what you’re doing online.  For example, if you sell fire extinguishers, a good domain might be WholesaleFireExtinquishers.com.  Once you decide on a domain, you have to purchase it through a registrar.  A common registrar is GoDaddy.com which sells domains for about $10.

2. Buy Hosting

After you get your domain, you’ll need a hosting account to get your website online.  (This step might be a little out of order since you don’t need hosting until after you’ve built your site.)  The cost for hosting can vary, but you can generally expect to pay $5 to $20 per month depending on your needs.  GoDaddy.com also offers hosting, but I’ve had a better experience through my web host, LunarPages.com.  They’re very reliable, and don’t have some of the restrictions that you have to work around with a GoDaddy account.

3. Build your Website:

This is probably the most difficult of the steps if you’re doing it yourself, or one of the most expensive if you’re paying someone else to build your site.  The cost for a custom ecommerce website starts at about $500 and can easily get into the thousands of dollars.  If you don’t have a huge budget and you’re not a skilled web designer, I recommend using a 3rd party ecommerce solution.  One I’ve used in the past is OSCommerce.  You need to have a little technical skill to get it up and running, but it’s mostly about configuring it to your preferences.  This is the fastest route for getting your site up and running.

4. Add your Products:

For this article, I assume you already have an inventory or source of wholesale products that you’re planning to sell.  If you built your website yourself, this is the part where you code all of your products in.  However, if you used OSCommerce, you simply need to fill in the details about your products and the software takes care of the layout.  As far as maintenance goes, the 3rd party solution will save you a ton of time down the road.

5. Set Up Your Payment System:

If you’re selling products online, you’ll want to accept credit cards.  When customers are at your site, you want to have as few barriers as possible between your potential customer and a sale.  Two cheap and easy ways to get started are PayPal and Google Checkout.  Both are free to sign up, and only take a portion of each transaction.  I believe both are still below 3%.  If you don’t want to deal with contracts and monthly fees, these are your best choices.  If you want to get that percentage down, you could sign up for a merchant account and process the credit cards yourself.  Usually, merchant accounts come with very strict contracts and high monthly fees or minimums.  Unless you’re doing a massive amount of business, PayPal or Google Checkout are the way to go.

Once everything is set up and working properly, all you have to do next is get people to your website.  You’ll want to use a mix of search engine optimization, pay-per-click advertising, and other advertising tools, but we’ll save that for another time.  For now, just get on Ebay or get your website up and running.  I hope this helps you get started in the resale business.  If you have any questions or comments, please use the comment system to let us know.

Basically, rack jobbing is a relationship between a you and a retailer where you display your goods in their retail location.  The retailer only pays for products sold, and you each benefit with a little profit from each sale.

The only point I disagree with is that he says, “There is no reason for a store owner or manager to turn you down when you offer to place merchandise free of charge. There is no risk involved for him, therefore it is not hard to get you initial accounts setup.”  The next sentence warns that you’ll have to tell the retailer they’re responsible for stolen items.  It’s not the most terrible thing in the world, but it is more merchandise they have to keep from being stolen.  Depending on where you’re placing your products, they might not be used to watching out for thieves.  (ie. hair salon or other service business)  Most businesses should accept your proposition of being a rack jobber, but be prepared to put them at ease over this point.  Also, I want to mention that this policy is very important for you to stick to.  If you don’t hold the retailer responsible for stolen items, they could fudge the sales numbers and report them as stolen, thus shifting profit from your pocket to theirs.

In addition to Robert’s ideas for getting started, here are a few of my own:

• Sunglasses at hair or nail salons
• Car accessories at an auto body (tire gauges, air fresheners, etc…)

It was a very interesting article that I hope inspires a few readers to give it a try.  If you do, let us know how it goes.

What does this mean for you?

Basically, be very careful if you’re getting ready to buy a lot of LCD TVs.  You might get a great price that will turn out to be very high by the time you’re ready to resell them.

They’re also reporting a lower-than-expected demand for LCD TVs.  That means, if you have a bunch of TVs that you just bought at too-high-a-price, you’ll probably have trouble moving them.  1. You’ll have to price them higher than your competition because you didn’t wait for the price drop.  And 2. Nobody’s buying them anyway.  (Not “nobody” but you get the picture.  High prices and low demand generally doesn’t work out in the wholesaler’s favor.)