There’s plenty of drop-shippers for eBay sellers out there; but they charge a subscription fee and/or increase the cost of the products to make money. How do you cut out the middle man to pay the least amount possible for profitable products to sell on eBay?

If you’re willing to do a little leg work, you can dramatically increase the profits you make. You’ll learn which two sources of in-demand products even many Power Sellers don’t think of. Read on and you’ll learn how.

Go Right to the Source

For the lowest prices on products to sell on eBay, it’s often best to go right to the source, the product manufacturer itself. So where will you find how to contact the maker of products?

As obvious as it might sound, visit a local retailer which sells the product you’re interested in. Take a pencil and paper. On the side of the product packaging, you’ll often see an address for the manufacturer or distribution center. Inquire by phone or mail.

If you don’t know who sells your product locally, where else can you find the manufacturer?

Head to the library. Tell the librarian you want to look up products by manufacturer. You’ll find two or three sets of reference books that’ll give you all the help you need.

You can also do a quick search on Google.com to find this information. Any company of any size is going to have a Web site. Look for an "About Us" or similar link on their home page. They’re very happy to sell more products. They’ll be happy to help you.

There’s one downside. Working directly with the manufacturer or distributor, sometimes you have to buy more than one or two at a time. Also, make sure who pays postage. Take that expense into account when determining how profitable working directly with the manufacturer will be for you. But it’s probably still a lot cheaper than getting the item from a drop-shipper.

The Product Source Close to You

Most every retail store shares a common problem. They have some items which don’t sell. I’ll bet you’ve set foot in a retail store and found an incredible price on a clearance item. Why did they cut the price so much? It didn’t sell.

Often retailers will actually sell items on clearance at a loss. In other words, they sell it for less than they paid themselves.
What’s more, many stores simply don’t want to clear these items out. For example, when a shoe store sells you a pair of Nike’s at deep discount, what does that do to their profit? Sure, they reduced their inventory, but at what price?

Retail Economy 101

Most likely, buying the inexpensive pair of Nike’s meant you DIDN’T buy a more expensive pair. If you came in to buy shoes, you probably expected to pay full price. Let’s say the retail store marks their inventory up 150%. A $125 pair of Nike shoes cost them $50. They make $75 profit.

Let’s say the retail store decides to unload the shoes at a loss. They sell you the shoes for $40 and take a $10 loss (since they paid $50 for them).

If they hadn’t offered the deep discount, you may have bought the $150 pair of shoes next to the discounted ones. They would have made $75 if you hadn’t bought the discounted pair. Did they win?

In this example, the store would have been better off pouring gasoline over and burning the pair of shoes you bought, rather than offering them at discount. Why?

If they had thrown out the pair of shoes that wouldn’t sell, they lost the $50 they paid for the shoes. However, they would have sold you the $150 shoes for $75 in profit. They still would have made $25 by throwing out the shoes.

By selling the shoes at discount, they recovered $40 of the $50 they paid for the shoes. But in doing so, they walked away from $75 in profit!

Give Retailers a Third Option

So what’s a retailer to do? Find another way to sell off their inventory that doesn’t sell. That’s where you come in.

You offer to sell the shoes for them on eBay. The store owner sets them aside and you list them on eBay. Agree to buy the shoes from them IF they sell on eBay for the same $40 they would have closed them out for.

You both win. You can likely sell the shoes for $100 on eBay. That’s still $25 cheaper than retail. And you’ve probably been stunned to see many items sell for more than retail on eBay. I sure have.

If you sell the shoes for $100 on eBay, you make $60 on them. The store owner unloads inventory they don’t want, but they don’t risk a customer buying the cheaper pair instead of a more expensive pair.

But if the shoes don’t sell, you’re not out a dime because you only pay for the inventory IF the shoes sell on eBay. You don’t risk buying inventory that doesn’t sell.

It doesn’t matter whether a store sells toys or electronics. Within a mile or two of your home, you’ll likely find dozens or even hundreds of retailers with excess inventory. When you help them clear out their inventory you provide a service profitable to you and the retailer. You both win.

So why don’t they just sell their items on eBay themselves? For one, they don’t have the time. More importantly, they don’t have the tools and know-how to do it profitably. With a tool like HammerTap auction research tool you know what works. With a minute or two per item, you’ll know:

How likely is the product to sell? (Auction Success Rate)

How much is it likely to sell for? (Average Selling Price)

Which listing features make it more likely to sell for more on eBay? (bold, gallery picture, highlight, etc.)

Simply put, you’ll know how to sell the item on eBay and make money on it. The retailer won’t.

Selling the Idea to Vendors

Visit local retailers which carry products you’d like to sell on eBay. Ask the business owner if the store ever has inventory that doesn’t sell without discounting it. Ask if discounting products means customers may buy the product at discount, rather than buying a similar product at full price.

Now comes the close. Ask, "If I could show you a way to reduce inventory and never risk sacrificing a full-price sale, would this appeal to you?" Here’s a sales tip. Never say "would you be interested?"

People are conditioned to say no to that phrase, because it implies that they are committing to something. But asking if something appeals to them is very easy to say yes to.