With over 187 million users across the globe, it comes as no surprise that one of the largest e-commerce platforms would attract new sellers that are looking to start a profitable reselling business.
eBay is known for its endless variety of second-hand products, making it the perfect marketplace to sell a wide range of different items.
While the platform is ideal for new sellers due to its easy navigation, a common issue faced by many involves product sourcing.
An abundance of inventory is key for any seller who would like to run a successful business smoothly. After all, no product means no sales!
In this guide, we will answer all your questions regarding eBay sourcing, leaving you with one less thing to worry about along your journey of success.
1.1 Retail Arbitrage
1.2 Wholesale
1.3 Dropshipping
1.4 White Labelling/Private Labelling
1.5 Self-production
Methods of Inventory Sourcing You Need to Know About
Acquiring products for your eBay shop can be carried out in different ways.
In this section we will explore retail arbitrage, wholesale, dropshipping, white/private labelling and self-production.
Each sourcing model comes with its own pros and cons, thus reviewing which one is the most compatible with your budget, storage and accessibility is important.
Retail Arbitrage
This method of eBay sourcing refers to the process of purchasing a product from a retailer- usually at a discount- and then reselling it at a higher price for profit.
Not only is this a perfectly legal way of acquiring inventory, but it also poses minimal risk in comparison to other sourcing methods. This is because there is little to no contact required with the product’s manufacturer and/or supplier, making the entire process quite straightforward.
Another benefit of arbitrage is the endless options of places you can choose to source your inventory from. Some of these include:
- Facebook Marketplace
This is a popular platform that allows you to browse from the comfort of your own home, but also negotiate prices for better deals. After all, having a great profit margin is necessary for a reliable full-time income.
On the other hand, a common concern when purchasing items from these types of marketplaces involves the collection aspect, as there is always a risk when meeting up with a stranger. If you feel unsure, you can simply resolve this issue by arranging a meet up in a public place such as in front of a police station, or by bringing a familiar face along.
- E-commerce Platforms
Popular reselling marketplaces such as eBay and Mercari are ideal destinations for enticing deals.
While it may sound strange to be told to buy inventory from the same place you are going to be selling on, people who are looking to declutter their homes tend to choose these platforms to sell for lower prices.
Similarly, eBay auctions that end at off-peak times are ideal for securing a great deal.
To avoid issues that could arise from the waiting period between the purchase and delivery date, you should plan ahead by ensuring you are not running out of items to sell. In other words, don’t choose to source at the last minute!
- Garage Sales
This one is at the top of the list of places resellers choose to explore for their eBay sourcing. From the great variety of products to the notably low prices, garage sales are any seller’s dream destination.
As with any other option, these are not immune to potential problems. For instance, those living in rural areas may find it more difficult to find one nearby. However, if you happen to have easy access to a bunch of garage sales, make sure to visit and examine if this is an ideal place to source your inventory from.
- Your own home
This is the best place to start your reseller journey if you are looking to source on a tight budget; especially if you are entirely new to this.
Our homes are full of items that are completely unused. Therefore, the only thing you really need to do is walk around your house and make a list of unwanted products that are in good condition. These should include unopened presents, clothes, workout equipment and kitchen appliances.
However, it should be noted that sourcing from your own home is limited– both in the variety of items you can get your hands on, but also in duration. Thus, you should only opt for this option if you are reselling as a side-hustle, or you are only using your home as a temporary source for your inventory.
As mentioned earlier, eBay sourcing through arbitrage is ideal due to the endless options of places you can choose from. Some more spaces you can explore include:
- Discount stores
- Pawn shops
- Community markets
- Craigslist
- Community Facebook groups
- Flea markets
- Estate sales
- Antique malls
- Local markets
- Clearance sales
- Thrift stores
- Charity shops
Finally, sustainability is at the heart of retail arbitrage, as reselling ensures that the life of products is extended. For instance, it has been found that buying used products reduces its carbon footprint by an impressive 82%.
So, if ethical and sustainable shopping that does not have a negative impact on the environment aligns with your values, arbitrage as a method of eBay sourcing might just be for you!
Wholesale
This method of sourcing is a type of business model that consists of a distributor that buys product in bulk directly from a manufacturer at a discounted price. A business, also known as retailer, then purchases this product in large quantities and again, at a discount.
Popular wholesale marketplaces include Alibaba, Aliexpress and Faire.
Due to the reduced price per item, sourcing from a wholesaler can be a worthwhile investment that is cost-effective in the long run. However, in order to start your eBay sourcing through a distributor, you need to be able and willing to make this financial commitment.
While buying your product shouldn’t be an issue, you need to have enough space to store and manage your inventory. If this isn’t possible, you may have to pay for a storage space.
In addition, while this guide is aimed at setting you up for success with your reselling business, consistent sales can never be guaranteed. Thus, there is always a possibility that your product will not sell, making this method higher risk in comparison to arbitrage.
Dropshipping
Product sourcing through dropshipping is a form of order fulfilment whereby the seller accepts customer orders without storing or shipping the stock. Instead, the manufacturer directly ships the products themselves.
Unlike wholesale, this method saves storage and requires little financial investment, as the product does not need to be paid for by the seller until it is sold first.
This makes it ideal not just for start-up businesses but also for more experienced sellers who are looking to source their inventory in a cost-effective manner.
Once you have come into contact with a manufacturer or supplier of your interest, you have to list their catalogue on your eBay shop. Then, each time an item is sold you have to let them know and buy the respective product at a discount.
This way, a profit margin is generated, and you can start earning a % of the sale. While this is a less time-consuming form of eBay sourcing, it also leads to lower profit per product.
Similarly, despite the supplier being responsible for the shipping, you are still required to ensure the safe delivery of the package, as well as deal with returns and customer support. This needs to be prioritized, as any issues will be reflected on your reviews section, not the supplier’s.
Finally, reviewing eBay’s dropshipping policy here is necessary.
According to the policy, all products must be sourced from a manufacturer that does not directly ship to customers. If this is disregarded, you could face the following penalties:
- Lowered seller rating
- Cancelling of listings
- Selling/Buying restrictions
- Account suspension
White Label/Private Label
White labelling occurs when a business purchases a product by a manufacturer but uses its own brand name. This is also known as rebranding, and makes it seem like the product is made by the business itself rather than the supplier.
A well-known white label product is Advil. Behind this brand is a manufacturer who simply produces ibuprofen and then sells it to different brands that can label it with their respective name.
Purchasing white label products is both time and cost effective, as it reduces production and marketing energy and costs.
Private labelling refers to a product that is exclusively manufactured for a particular business. This method requires a lot more involvement with the supplier, as you are creating a unique product that can only be associated with your brand. While a considerate financial investment is required, it is a great way to stand out from competitors.
Self-production
There is nothing more rewarding than earning income through your own creative efforts. While it is the most time-consuming method, it is a model worth considering if you truly want to show off your innovative side.
While you will be the one adding to your inventory with your hand-made products, you still need to find a source for your materials. Thus, you might consider some of the methods above for this purpose.
i.e. sourcing materials for your self-made candles could be done through retail arbitrage. In fact, eBay is a great destination for low-cost craft supplies.
Crosslisting: Why You Need It and How It Can Maximise Your Profits
Crosslisting, also known as crossposting, refers to the practice of listing products on multiple platforms at once.
This is a time-saving marketing strategy that increases your brand’s visibility, improves your SEO performance and makes you a more credible seller.
Ultimately, it leads to greater customer engagement and sales!
Find out more about the benefits of crosslisting here.
Whether you are completely new to reselling or you already have a store on a different platform, crossposting is a must for any seller who is looking to maximise their profits.
Crosslister is an automation software that crossposts your products to different marketplaces in bulk or individually.
It also offers other great functions such as delisting, which automatically removes listings that have been sold on all marketplaces. This is significant for the smooth running of your business with minimal human error.
The information that is copied over to eBay from other marketplaces include:
- Images
- Title
- Description
- Price
- Condition
- Style
- Material
- Occasion
- Fit
- Body Fit
- MPN
- Pattern
- Brand
- Size
- Variations
- & More
To find out more about the app’s features, have a look here.
Regardless of the eBay sourcing method you decide to use for your business, constantly adding to your inventory can be extremely time-consuming; and this is just one aspect of running a successful business!
Using automation software is an affordable way of taking some tasks off your plate and focusing on these other aspects of your business that require your full attention.
Try Crosslister for FREE here.
What Are Some Other Tips That Can Help With My eBay Shop?
You have now learnt everything you need to know about sourcing your inventory. While having a consistent supply of product is necessary, there are other aspects of running a business that need to be considered.
- Niche down
Before beginning your eBay sourcing, it is important to refine your brand by picking one or two product categories you will be focusing on.
While selling a variety of different products may seem like a good idea at first, it might actually be the downfall of your start up business.
Standing out from the crowd is what makes a seller memorable; and therefore successful. Putting your brand into too many categories can make you get lost in the sea of millions of other sellers, as there is nothing that makes you unique.
Focusing on a specific category will help you appear as a specialized business that knows their audience; leading to higher levels of trust and credibility.
To ensure that you stand out within your product category, it is important to carry out product research in order to find out what sells the most on eBay.
What does your target audience like the most? This should be the basis of what your inventory will look like.
- Ensure a decent gross profit margin
Deciding on the correct selling price should be done after thorough research rather than random predictions.
Comparing your product to similar ones, using eBay’s price recommendation tool and considering other fees should be part of this process.
Our free eBay fee calculator can help you to find out what your estimated profit will be.
Check out our eBay pricing guide here.
- Research your competitors
Knowing who you are up against will help you market your product in an efficient way.
What keywords are they using in their product titles and descriptions? What do the product images look like?
These sellers are at the top search results for a reason. Competitor research should be conducted with the aim of understanding why these shops are popular and then applying some of their methods to your own shop.
You should do this research frequently, as trends and popular keywords are ever-changing. Thus, adaptability is important in your marketing strategy.
In Conclusion…
In this guide, we have shared our top must-know tips for sourcing your eBay inventory. Each method of sourcing has its own benefits and disadvantages, therefore it is important to find one that is the most compatible with your own business.
While eBay sourcing is at the forefront of this article, this is only one aspect of building a successful business. Doing competitor research, choosing a product that is in demand and setting the correct selling price all play a big role in the type of profit you will make.
Here at SellerAider, we make automation software that helps sellers across multiple marketplaces focus on inventory sourcing and other aspects of their business that need rigorous attention.
Let us take care of your marketing needs and watch your sales grow!