As I’ve mentioned before, I used to run an Ebay business while in university. It was fun but the novelty of it wore off quickly. The fulfillment aspect of the business, in particular, became tedious and uninspiring.
I also found obtaining stock to resell challenging. I used to research products selling well on eBay, then google parts of their titles plus keywords like “wholesaler,” and “supplier.” I would then contact suppliers that Google returned and obtain their product list, which I would then wade through in search of profitable products.
The most frustrating part, however, was when I got to calculating potential profit. The suppliers all used to quote prices that made it difficult to profit. Mainly because most of the wholesalers I found via Google search were not actual wholesalers; they were retailers who also sold wholesale — which I didn’t realise at the time.
Obtaining stock of in-demand products at the right prices is key to building a successful e-commerce business. For obvious reasons, however, this is a topic most successful resellers are reluctant to discuss, let alone disclose their suppliers. But finding reliable sources of goods to resell isn’t difficult.
So whether you want to create a multimillion-pound operation or simply a second stream of income, the sources of profitable stock that I will share will help you begin your e-commerce journey.
Second-hand goods
Our favourite source for finding inventory to resell is second-hand goods. We’ve been sourcing and reselling used books on Amazon using FBA for over a year, so we know that the second-hand market is a great source for finding bargains. Reselling used goods is enjoyable, affordable, and the easiest way to start making money online.
The tangible aspect of reselling helped me overcome the biggest psychological barrier that stops most people starting an online business: that making money online is real. After selling some used textbooks, I realised that selling on Amazon using FBA was a great opportunity.
If you’ve never sold anything on online, in this section I’m going to share with you some ideas on where you can find used goods so that you can start reselling.
Around the house
The first shipment I sent to Amazon FBA was made up of about 50 of my own textbooks that I no longer needed, about 20% of which sold within a month.
Starting with used books, in my opinion, is the easiest way to starting with Amazon because you don’t need any specialised knowledge nor a large capital. You just need to know the market price of a book and its likelihood of selling. Check out my introduction to FBA Bookselling for more details on how to determine if a book is profitable.
If you are completely new to selling online, I would recommend finding books around the house that you no longer need or want. And once you have enough books, create and send your first shipment to Amazon FBA. If you don’t find enough profitable books, you can easily get some from charity shops, car boot sales, and used bookshops.
If selling used books doesn’t sound like your thing, try other items like branded clothing, electronics (such as games consoles) collectable items and so forth. Basically, anything that you think might of value to someone else.
Charity shops (thrift stores)
When you run out of things to sell, there are always bargains to be found in charity shops — and there’s nothing like the thrill of finding them. Charity shops are the most popular source for most resellers of used goods. Locate all the charity shops in your area and route through them often.
Here’s a book that I picked up from a charity shop that recently sold.
Sale after fees: £15.52
Cost of the book: £2.50
Other costs: £1.50
I was left with £15.52 after all Amazon fees. Or a profit of £11.52 after including the cost of the book and other costs.
Car boot sales
I had never been to a car boot sale before starting bookselling. In the past year, however, I have been to many and I wasn’t disappointed. I loved the atmosphere and found it a place where you can be a “wheeler-dealer.” I could examine things in detail, chat and negotiate freely — and not worry about offending people.
In the first car boot sale — the Battersea Car Boot — that I attended, amongst a sea of junk, I spotted a large racing book which I bagged for £5. It was the highest that I had had ever paid for a book. But considering that it was going for about £100 and that there were only a few copies on sale at Amazon, it was a bargain. It recently sold for €151.25, although the sale took over a year.
And here is the breakdown of Amazon’s fees and the final proceed that I got to keep.
At the time the Euro/GBP exchange rate was 1.13. Converted to GBP, I was left with £108.60 — that’s a 2172% Return on Investment. Not a bad for a £5 investment.
Manufacturers and distributors
If you want to take this route, you’ll need to focus on a niche, on a category of products to sell. Once you’ve identified what you would like to sell, finding suppliers to supply the items should be easy.
First, head over to Amazon and find a product in your niche that you would like to resell.
In the above screenshot, you can see that the brand/manufacturer of this product is Aveeno.
Now, with this information, we can find the company’s contact details and approach them.
That’s how I find suppliers in a nutshell.
It’s simple and effective but it had taken me a long to time to learn. If you want to buy wholesale stock, go straight to the source by contacting brands/manufacturers directly. It’s the best way to find reliable suppliers. Bear in mind that most big brands (like Aveeno, above, which is a brand of Johnson and Johnson) will direct you to one of their distributors, so you’ll find legit suppliers regardless.
Related: Wholesale sourcing is the way that professional resellers find and profit from in-demand goods. Want to know more? Read my introductory guide to the Wholesale Model using FBA.
Some brands and distributors may supply you directly but most won’t, as they don’t want to do business with just another Amazon or Ebay seller. This is because they want more control of price by cutting supply in price-driven platforms. The best way to around this obstacle is to create your own platform, your own functional e-commerce website focused on a niche. This will greatly increase your chance of securing accounts when approaching suppliers.
Brick-and-mortar retailers
Retailers often have clearance sales to clear discontinued products and create shelf space for newer ones. They also have other frequent sales to attract new customers to a product and increase their customer base indirectly.
These sales make it possible to buy stock from retail outlets for resale — a practice which is more commonly known called Retail Arbitrage (RA). I do retail arbitrage occasionally when I don’t find enough profitable books.
Categories such as health and personal care have been good for me, as major retail chains always seem to have good deals. My strategy is simple: I hit the sales sections of this category at major retailers and scan as many products as I can.
Online retailers
Buying stock from online retailers and reselling it on Amazon or Ebay, known as Online Arbitrage (OA), something that I’ve only begun doing recently. OA is the same as RA, except that it’s more convenient. Unlike RA, you don’t have to leave the comfort of your home to source products.
How I do OA is straightforward. I visit the offers/sale section of big online retailers and check out the items on sale over at Amazon. I assess two key factors: price and sales rank. The price differential has to be large enough, at least the 3x higher on Amazon, and the sales frequency has to be good, too. The aim is to buy products that you flip quickly for a profit.
Sometimes, I do the inverse. I google products I find profitable on Amazon and check if other online retailers have them on sale.
I wouldn’t advise jumping into OA straight away. It’s trickier and requires experience.
Online platform
Platforms such Gumtree, Ebay Facebook Marketplace and forth are great sources to buy stock for resale. Once you’ve gained some experience selling on Amazon, check these sites for undervalued items, buy them as cheap as you can and resell them at a profit.
Here are two books that I bagged for £25, or £12.50 each, when I first started.
The first book, “Microeconomics,” was, at the time, the latest edition and was retailing for around £50. The sales rank was great too, evidenced by the fact that it sold for £59.99 within a few weeks.
The second book, “Macroeconomics,” didn’t take long to sell either. It sold for £27.85.
Revenue: £66.14
Cost: £25
Other costs: £3
I made a profit of £38.14 on a £28 investment. That’s an ROI of 136%.
This approach is a lot more convenient than sourcing at physical shops but requires more experience. To find profitable items for resale this way, I would recommend first mastering all the elements of reselling on Amazon, including understanding sales rank.
Dropshipping
Dropshipping is a business model that allows you to build an e-commerce operation without actually holding any stock and without paying for it in advance. It’s a great model if you want to make money without holding stock and fulfilling orders — or shipping inventory to Amazon FBA.
To get started in dropshipping, identify all the products that you would like to sell and find the suppliers that supply them. If you target the right niche and price correctly, you will sell products. Once you sell an item, you buy the product from your supplier, who then fulfill the order on your behalf.
Does this idea sound too good to be true? Well, it does — when I first heard of it, it sounded scammy and I dismissed it. But it’s a legitimate model and countless of entrepreneurs are making it work.
I haven’t yet got round to experimenting with dropshipping, but I would advise doing your due diligence if you’re considering this approach. The idea is simple but it’s actually difficult to execute and, although it requires a small starting capital, there’s a lot that can go wrong.