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It's not uncommon for SaleHoo members to find products on eBay that appear to be cheaper than what our approved suppliers sell the items at.
Have you been conned? Are you missing something?
No, you're not being conned, but yes, you could be missing some crucial points that will help you understand how wholesale prices and wholesale buying works and how you can get the best prices possible. Here's a quick guide to why sometimes, you can't find wholesale prices lower than eBay prices and what to do about it.
Why are eBay prices sometimes lower than wholesale prices?
1. eBay has become a wholesale marketplace for many, many products.
A quick search on eBay for "bulk wholesale" reveals that you can purchase pretty much anything in bulk for decent wholesale prices.
A lot of sellers purchase bulk lots on eBay and split them up to resell them on eBay, their own website, or another marketplace.
But even when selling single items, you will often find them at extremely low prices that make you wonder why a seller would bother... or how much their wholesaler is selling them for!
The high volume business model on eBay
eBay is one of the most competitive marketplaces in the world and profit margins are tight. This is why many retailers rely more so on selling high volumes of products, rather than selling a few products with higher margins.
Furthermore, many eBay sellers sell 'hero' products or highly sought after products at very low prices as part of a loss-leader model: Lure in buyers by selling low priced commodity goods, then make good margins on everything else they sell.
For example, I've noticed a few sellers offering laptops for very low prices, then they sell laptop cases or other accessories for good margins. They attract buyers to their cheap laptops, then make their profits on the cases and accessories.
2. Wholesaler prices ARE lower than eBay prices, but you have to work hard to find them
For the most part, wholesale prices are lower than eBay sale prices, but sometimes it's easy to think otherwise because when you visit wholesale websites, you only see their light wholesale or retail prices.
In order to see bulk wholesale prices and get rock bottom deals that will earn you big profits, you need to login to the wholesalers website and or email them.
"One way in which a supplier may share their core products with you is through wholesale list," explains Emma Hamilton, a multi six figure Amazon seller. "A wholesale list is also referred to as a product file, product catalog, and line sheet."
Why do wholesalers make you email them or log in to view prices?
One reason why wholesale prices aren't always made public is because wholesalers have to protect the interests of retailers selling their products. Have you ever heard Walmart announce how much they make on the items they sell? Of course not. This information is usually well guarded and it's the wholesaler's responsibility to keep it that way.
Additionally, a lot of wholesalers are, frankly, just a bit behind the times when it comes to their websites and they don't have all their information on their website for you to view: You'll have to call or email to get it. Don't let this put you off though, some of the best wholesalers actually operate this way.
Wholesaler's old and sometimes neglected websites makes it a little bit hard to find what you want and I'll be the first to admit to closing a wholesalers website because I can't find what I want within 20 seconds. (I know you have done the same!)
In doing so, however, we leave behind what can be a potentially profitable find - terrific wholesale prices from a wholesaler you can form a good relationship with.
What to do when you can't find the right wholesale prices
The first thing you should do is look a little harder on your wholesaler's website. As I mentioned above, you generally need to create an account and login to view prices. I know this can be a pain in the butt, but how hard is it really?
If you're serious about your business, prove it to yourself and make the effort.
You should also email the supplier and tell them a little bit about your business and plans for the near future. Ask them how much you will need to purchase in order to earn better bulk discounts i.e. if you spend $10k, what discount can they offer? $10k might sound like a scary number now, but a lot of small eBay businesses eventually are able to purchase at this level.
Knowing what kind if discounts you can get in the future will help you forecast your profits for the future.
Still can't find the right price? Try this:
- Ask our talented customer support staff to take a look for you on our Supplier's Wanted section of our forum. They seem to have super searching powers that help them find more suppliers than the rest of us!
- Consider selling somewhere other than eBay. You've probably already considered this because there are some fantastic options to sell stock outside of eBay. I've listed a few of them here. You can also sell on your own website which presents a medley of benefits including being able to sell your items for better prices than you could on eBay. SaleHoo Stores is the easy and affordable way to get your very own storefront up and running. It requires no technical knowledge and costs just $0.90 per day for our Basic Store - that's less than the fees you could pay to sell just one item on eBay!
Last piece of advice
“The key thing about wholesale is you want to source profitable products quickly to get your return on investment back and then rinse and repeat," explains Hamilton. "It’s important to note that not all wholesalers will provide a product catalog. For those suppliers, you will need to go through their website and manually search their catalog which can take hours or even days especially when they have a large portfolio.”
Scott Roe,
It could be your manufacturer is actually selling the products themselves. This doesn't happen often, as most manufacturers are too busy making products to bother selling them in small quantities on eBay. However, when it does happen, it can be a bit disastrous as you obviously can't compete with them!
Some suppliers include a clause in their agreement that states that they won't put you at a disadvantage by selling the products themselves. It's worth asking them about this before you start trading with them.
More likely, the seller is in breech of their agreement with the manufacturer by selling under their MAAP. If I were you, I'd talk to the manufacturer about it.
You're right about Chinese suppliers selling on eBay. Of course, they don't have the same shipping costs as we do so they can undercut us with ease.
What makes it even harder is that in China, the cost of living is significantly less than the cost of living in OECD/western countries (where most SaleHoo members live). What this means is that when a China-based supplier sells an item and makes $2, that's a good profit margin.
If I make $2 off an item, I'd consider it a failed transaction because $2 doesn't buy me much. In China, however, $2 goes a lot further.
This touches on what I mentioned above in my comment to Ben Wright. It's tough competing with Chinese sellers!
Should you lower your prices and sell in higher volumes? You need to do some number crunching. Figure out what you want/need to make and how many sales you need to make to achieve it. Then take a look at eBay Completed Listings and see whether there are enough people buying the USB sticks everyday so that you can make up that number of sales.
In other words, is there a big enough pool of buyers for the volume method to work for you?
You could also spy on the other sellers offering the same USB sticks - take a look at their feedback and see how many they sell per day. If you sold the same as them, would the numbers work for you?
The volume method can definitely work but you need optimized systems to make it as profitable as possible. Aim to streamline your listing and shipping processes so that it takes you as little time as possible. This is crucial for the high volume, low margin model.
Figure out what your hourly rate is when you sell in high volumes: how does it compare to if you were to get a job? Better? Worse? I think this is an important number to crunch. Just divide your profits per sale by the number of hours/minutes spent selling each item.
One last tip: If you haven't already, cutomize your thumbnail image by adding the words "Trusted Japan* Based Seller. Quality Guaranteed"
This might help you stand out from other sellers.
(*from a quick look at your profile, it looks like you are based in Japan, sorry if I'm mistaken)
You asked about whether you can compete when you drop ship products that other sellers get from wholesalers.
Good question. You certainly can, but not for hugely popular items that everyone else on eBay sells.
Some of the best money I've made online was from drop shipping products that others were buying at wholesale. I struck up an amazing deal with my supplier which meant my profits didn't suffer.
If you want all the benefits of drop shipping, get ready to sell deep niche items that target a specific audience, not a broad one.
One of the best ways to use drop shipping is to source more items to sell alongside items you bought at wholesale. i.e sell wholesale table cutlery and drop shipped table cloths and coasters (just an example to demonstrate). If you're not ready to buy wholesale yet, use drop shipping as a way to earn some money to save up for a wholesale lot. It might take time, but you will get there.
Thanks for your comments :)
It's a sad truth that in some cases, you're right: After adding shipping and handling, you still can't compete. This is usually because your competitors are selling items sourced direct from manufacturers. This means they're getting a better deal than you when you buy from a wholesaler who can offer a smaller wholesale lot.
That's great that you have tried selling on Addoway and Bonanza - lots of SaleHoo members have reported great sales numbers there. Shame you haven't yet seen the same results. On these sites, it really pays off when you get involved with the community. Chat on the Addoway and Bonanaza community platforms and get to know others. Community is very strong there and although it takes your time investment, it can pay off.
I hope this helps!
I will forward your request on to support and someone should be in touch.
I'm not sure what pages on our site you are looking at for your data, but many of the members in our directory don't post their wholesale prices publicly, which could be the source of the discrepancy.
If you're having trouble, I suggest reaching out to our support team! They're always happy to help members with research: https://www.salehoo.com/support
I hope this helps!