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 prices found on eBay for used or “like new” items.
When comparing prices found on eBay, always make sure you choose products that are brand 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 sellers also sell refurbished products, which can be mistaken for new products. Refurbished products are defective products that have been returned to the manufacturer, then fixed and repaired, and put back on the market for a lower price.
Compare prices with shipping included
Many eBay sellers will try to lure you into their auction by advertising a lower selling price, however they will inflate the shipping cost to make up the difference. When comparing prices, always make sure to also look at the cost of shipping and handling. Simply add shipping and handling to the item’s selling price to get an exact total cost. The import price you need to compare is the actual total cost.
Compare prices with the BUY IT NOW option only
Many sellers will make the mistake of searching eBay auctions to compare prices without specifying the search for auctions with BUY IT NOW prices only. This can lead to confusion as some people will compare the current offer price to the supplier’s wholesale price. This is not an accurate way to compare prices, as auctions may have reserve prices on their auctions, which may result in the auction not selling if the reserve price is not reached. To avoid this confusion, simply compare prices with auctions that have a BUY IT NOW price only.
Compare the wholesale price with the average price only
When comparing your wholesale cost to prices found on eBay, always look at the selling prices of at least 4 or 5 items and calculate the average selling price for those auctions. Many people make the mistake of only looking at the lowest prices. These can be very misleading because not everyone will buy the absolute lowest priced items on eBay. In many cases, those auctions are held by people who have already bought an item and changed their minds 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 is sold. You should look for auctions that sell the same product over and over again with a consistent selling price, and always keep in mind that not everyone will buy the cheapest items on eBay.
buying in bulk
If you’ve applied the above technique and still find auctions with prices lower than your wholesale cost, then those auctions may originate from sellers who buy the item in bulk at a discounted price. This can definitely give you a market advantage, however, it 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, you may find that the prices just can’t be beat and this can happen in cases where a big box store decides to liquidate their products. Have you ever walked into Walmart to find that DVD player that’s 70% off? 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 closeouts are always temporary and will last only until inventory runs out.
Avoid products from China
Today many people sell products from China, with which it is very difficult to compete. 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 upon 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.
Case study
I once knew a lady who made tons of sales on eBay selling a very simple product. Out of all the millions of products available from the dropshipping provider, this lady had chosen to sell just one item. The item she had chosen was a “fish tank heater”, which was something she had never thought of before. It turned out that this item was in high demand and its sales continued to increase for several months. She then moved on to another item and kept up the sales momentum by choosing a different item every 6 months or so.