Well there is uBid.com and ETSY.com which are officially some of the best as far as auctions go. Its alot better to start at uBid.com then it is eBay. Or if you can gradually build up some good feedback, Link hidden: Login to view is an even better choice.
As for picking the product that's the real trick. Think of something others aren't usually thinking of before. Do product comparisons and layover comparisons. Check Amazon or some place to see if its in high demand.
Like for instance star wars products. This is an official niche, much like roulette winning ebooks are a niche. There's certain star wars games and products that people are constantly looking for. Your job here is to find out what they are, and where to get them. The sourcing directory will do the work for you. On top of this, I also found the best suppliers ever seen through the seo search engines.
Including I have to tell you, directly through new niche market search engines that just came out like Link hidden: Login to view. Or Looksnap, Link hidden: Login to view . You can find unbelievable products, and the most amazing niches by using these places. I will tell you that if there is a niche out there then it needs you filling it. Small niches are the most profitable period. Many are unusual. Also use dealio.com to find even more.