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EcommerceBytes-Update, Number 34 - March 17, 2001 - ISSN 1528-6703     Previous | | Next

How To Buy Wholesale for Your Auction Business

By Skip McGrath
EcommerceBytes.com

March 17, 2001
 



The most frequently asked question I hear is, "Where can I find all the hot-selling products at wholesale to sell on eBay?"

There are thousands of wholesalers on the Web and thousands more available off-line who will work with eBay and Web site sellers, flea market dealers and small retailers. These companies are set up to deal in small quantity orders and with small buyers.

The large wholesalers receive thousand of inquiries from people wishing to purchase their products who are not "real" businesses. These requests are routinely discarded.

What does it take to be treated as a real business? First of all, it takes a sales tax number (or businesses license if you reside in a non-sales tax state). These are issued by the various states. In most states the cost is less than $50 and you can apply on-line. Go to http://www.ny.gov or http://www.state.ny.us for New York State. (Put the two-letter abbreviation of your state in the URL instead of "NY.")

At the state's home page, look for links to the taxing authority or to "business license." Several states have links called "Setting Up A New Business" that will give all the information you need to get started. You will also need letterhead, business cards, a checking account in the name of your business, and blank purchase orders (available at your local office supply store).

After contacting the wholesale companies, many of them will ask you to fax a catalog/price list request on your letterhead with your sales-tax number before taking your request seriously.

Some of the best wholesale sources are still off-line. Wholesale distributing on the Web is far behind the e-commerce curve. Although there are hundreds of "wholesale-only" Web sites, this is still a tiny fraction of the industry. One useful Web site is http://www.buylink.com.

New buyers usually have to prepay for shipment. Most established wholesalers and distributors will advance credit to buyers after they have placed and paid for three or four orders. There are some wholesalers out there who might not be reliable. Much like any other business, they do come and go. For this reason, I seldom recommend or feature a company unless it has been in business at least a couple of years.

There are hundreds of wholesale industry trade shows in the U.S. every year. Wholesale-only design & furniture centers, gift marts, merchandise marts and jewelry centers are located in every major city. This is where you find and buy the latest, hottest products.

Gaining entry to trade shows and wholesale marts can be difficult. They will usually ask for several items of identification to prove you are "in the trade." The first time you visit, take business cards, letterhead, a copy of your sales tax or business license, blank purchase orders and your business checkbook. You may have to show all of these items to gain entry.

Is it worth all this trouble to attend a trade show? Yes. Dealers offer special trade-show pricing, and you have the opportunity to make new contacts and negotiate special pricing and terms face-to-face. Trade shows are also where you can find the products no one else is selling online.

Instead of trying to find a source for the hot products everyone else is selling on eBay, this is an opportunity to find the next hot product before everyone else does.

About the author:

Skip McGrath publishes the Wholesale Buying System and a free newsletter for Web site and online auction sellers at http://www.auction-sellers-resource.com.


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