Why are my wholesale prices below eBay prices?
Here is my list of guidelines to follow when comparing your wholesale prices to the prices found on eBay.
Compare prices only with new products
As you know, eBay is a place where you can sell almost anything and in any condition. Many people make the common mistake of comparing the prices found on eBay with used or “like new” items.
When comparing prices found on eBay, always make sure to choose products that are new and in the original sealed box. You can also look for a confirmation of the manufacturer’s warranty, which is usually 1 year. This will confirm that the item is really new. Price comparison with used or “like new” items will not be an accurate price comparison.
Many vendors also sell refurbished products, which can be mistaken for new products. Refurbished products are defective products that were returned to the manufacturer, then repaired and repaired, and put back on the market for a lower price.
Compare prices including shipping
Many eBay sellers will try to lure you into their auction by advertising a lower sale price, however they will increase the shipping cost to make up the difference. When shopping around for prices, always be sure to look at shipping and handling costs as well. Simply add shipping and handling to the item’s sale price for an accurate total cost. The import price to compare is the actual total cost.
Compare prices only with BUY IT NOW
Many sellers will make the mistake of searching for auctions on eBay to compare prices without specifying by searching for auctions with BUY NOW prices only. This can be confusing as some people will compare the current sale price to the supplier’s wholesale price. This is not an accurate way to compare prices, as auctions may have reserve prices in their auctions, which may result in the auction not selling if the reserve price is not met. To avoid this confusion, simply compare prices with auctions that only have the BUY NOW price.
Compare wholesale price with average prices only
When comparing your wholesale cost to the prices found on eBay, always look at the selling prices of at least 4-5 items and calculate the average selling price for those auctions. Many people make the mistake of looking only for the lowest prices. These can be very misleading because not everyone will buy the lowest priced items on eBay. In many cases, those auctions are held by people who have already bought an item and changed their mind and are trying to get rid of the item by selling it below cost on eBay. The fact is, in such cases, those low-priced items will no longer be available once the auction sells. You should look for auctions that sell the same product over and over again with a constant asking price, and always keep in mind that not everyone will buy the cheapest items on eBay.
Buy in bulk
If you’ve applied the technique mentioned above and are still finding auctions priced lower than your wholesale cost, then those auctions may originate from sellers buying the item in bulk at a discounted price. This can definitely give you a market advantage, however this requires an initial investment rather than selling drop shipping products.
Suppliers liquidating their products
There are cases where you just can’t compete. In some cases, prices may simply not be possible to beat and this can occur in cases where a large store decides to sell off its products. Have you ever walked into Walmart to find that 70% off DVD player? This happens all the time. In cases like this, unfortunately, there is no way to compete and you simply have to move on to a different product to sell, however, always keep in mind that such sales are always temporary and will last only until inventory is depleted.
Avoid products from China
These days, many people sell products from China, which is 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 time of delivery.
When comparing prices with items sold on eBay, always make sure to choose auctions for products that are physically located in the US Avoid comparing prices with items shipped from China or any country other than the US.
I once knew of a lady who was selling tons on eBay selling a very simple product. Out of all the millions of products available from the drop shipping provider, this lady had chosen to sell a single item. The item he had chosen was a “fish tank heater” which was something he had never thought of before. Turns out, this item was in high demand and its sales kept increasing for several months. He then moved on to a different item and kept up the sales momentum by choosing a different item every 6 months or so.