In other words, you won’t be making any money and at best you’ll find that you’ll be lucky just to break even!

This is a common email I get from people that are looking into buying wholesale.  One of my readers said this…

“I know that the market gets saturated.  But not to many people were selling these.  What I would like to know is, does your information steer me in the right direction to buy products that will sell for a profit, or is it just another list that shows products that I can buy that sells for the same price that eBayers are buying it for?  I am getting very frustrated at this point to find a true person to get this info off of and I would like to hear more from you personally.”

Now, if you’re from another country, one of our former American President’s said; “I feel your pain” ; )

Seriously though, I’ve had numerous correspondences with people just like you dealing with frustrations in product sourcing.  I totally understand as I’ve been there.  I had the same problem when I first started out.  I scoured the internet and called all over the country looking for legitimate wholesale suppliers to supply products so I could resell on eBay.  Unfortunately, every time I thought I found something great, it was going to be too difficult just to make my money back if I sold on eBay because there were already too many of them being sold for far less than what I could get them for.

Not good for the pocketbook right?

This is my response to these e-mails: Don’t give up – you can still make money on the back end even if your initial sale is not profitable!

Many people think they have to make a profit on the initial sale of a listing on eBay.  That would be nice, but I can tell you about a guy who listed his PS3 on eBay for $1.00 and made enough money on that one auction that he was able to donate $1000.00 to the Salvation Army!

This guy had it figured out.  I would strongly urge you to pay special attention to what’s going on here because this will give you some great insight to how to get around these frustrations and problems of not being able to compete or make a profit on your eBay listing because they are already being sold for less than what you can get a product for.

First, here’s my response to the reader’s email:

“Unfortunately, there a couple of things that lead to frustrations with “these lists”.

What many “wholesale lists” are is just a collection of someone doing a Google search and typing in url’s, calling it a product and selling it.  These are more likely a bunch of middlemen who are robbing you of profits because they are hiking up the cost of the goods.  Not good for you.

Or…

the situation is that even though these might really be legitimate wholesale liquidators, most people do not understand the fact that there is quite a difference between wholesale, liquidation and surplus merchandise.  This is a common misunderstanding, but it is very important point to learn the difference if you plan to be successful in the game.

If you’re finding products at wholesale, most people on eBay are not selling wholesale merchandise, they are selling liquidated or surplus merchandise.  There is a large difference between these categories and it is very important to understand what theses differences are.

Even if eBay sellers do sell wholesale products they often don’t make much of a profit because they have to compete with similar offers selling for less.  They are often competing with people selling below wholesale cost.  They can sell them this way because they’re not wholesale products!  They are usually from a totally different product category which is purchased at below wholesale costs!”

Alot of people have ended up being burnt in the process because they did not know this type of critical information.  I have personally used inside industry information and resources to sell full time on eBay, and it is profitable IF you learn how to do it the right way.  Without knowing this important information, you will probably end up learning these lessons the hard way: and that will usually cost you time and a lot of money that you don’t want to lose!

I know frustration can lead to disappointment, but don’t give up.  Trust me, it can be done!

May 14 (Bloomberg) — Prices paid to U.S. producers probably rose in April as oil costs rebounded, economists said before a report today.

The projected 0.2 percent increase in wholesale prices would follow a 1.2 percent drop in March, according to the median estimate of 68 economists surveyed by Bloomberg News. Another report may show the number of people claiming jobless benefits climbed last week from a three-month low.

Signs that the worst of the recession is over may boost commodity costs further, alleviating concern over deflation, or an extended drop in prices that hurts the economy. Along with the trillions of dollars pumped into the banking system by the Federal Reserve, increases in raw materials may stoke inflation once an economic recovery takes hold.

“It’s impossible to see how deflation can persist given the amount of liquidity in the system,” said Maxwell Clarke, chief U.S. economist at 4Cast.com in New York. “With oil moving back up, the thought in people’s minds becomes that inflation could ultimately become a problem that outweighs deflation.”

The Labor Department’s producer-price report is due at 8:30 a.m. in Washington. Economists’ forecasts ranged from a decline of 0.6 percent to a 1 percent gain.

Labor may also report at the same time that initial jobless claims rose to 610,000 in the week ended May 9 from 601,000 a week earlier, according to economists surveyed. The increase in applications probably reflects the closing of all Chrysler LLC assembly plants starting May 4 for at least 30 days while the automaker reorganizes under bankruptcy.

Recession Easing

Smaller declines in manufacturing and an easing in the housing slump indicate the worst recession in at least 50 years may be starting to abate.

The economy will probably shrink at a 1.9 percent annual pace this quarter after contracting at an average 6.2 percent rate in the prior six months, according to economists surveyed this month.

DuPont Co., the third-biggest U.S. chemical maker, and Dr Pepper Snapple Group Inc., the beverage maker spun off by Cadbury Plc last year, are among companies able to charge more. Wilmington, Delaware-based DuPont raised prices 5 percent on average in the first quarter and said demand will improve because most customers have used up inventories and are increasing purchases.

“We expect sales in the second quarter to be flat to slightly up from the first quarter,” Chief Executive Officer Ellen Kullman said on a call with investors on April 21.

Price Increases

Plano, Texas-based Dr Pepper Snapple yesterday reported first-quarter profit that beat analysts’ estimates and raised its 2009 forecast after increasing prices and cutting expenses.

“Markets and consumer sentiment appear to be on the mend,” Chief Executive Officer Larry Young said during a conference call with analysts.

Still, a report yesterday showed consumers aren’t yet totally out of the woods. Retail sales fell 0.4 percent in April after a 1.3 percent decline in March, according to data from the Commerce Department.

Producer prices are one of three monthly inflation gauges reported by Labor. Prices of goods imported into the U.S. rose 1.6 percent in April as petroleum costs surged, the government said yesterday.

Labor figures tomorrow may show consumer prices were unchanged last month after declining 0.1 percent in March, economists forecast. Excluding energy and food, prices probably rose 0.1 percent.

For their part, Fed policy makers are still more focused on the threat that prices will fall.

“In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued,” policy makers said after their April 29 meeting. Still, there remain “some risks that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”

                        Bloomberg Survey

================================================================
                               PPI     Core     Core  Initial
                                        PPI      PPI   Claims
                              MOM%     MOM%     YOY%   ,000’s
================================================================

Date of Release              05/14    05/14    05/14    05/14
Observation Period           April    April    April    9-May
----------------------------------------------------------------
Median                        0.2%     0.1%     3.4%      610
Average                       0.2%     0.1%     3.4%      610
High Forecast                 1.0%     0.2%     3.6%      650
Low Forecast                 -0.6%    -0.2%     3.3%      580
Number of Participants          68       65       18       38
Previous                     -1.2%     0.0%     3.8%      601
----------------------------------------------------------------
Action Economics              0.3%     0.1%     3.4%      620
AIG Investments               0.8%    -0.1%     ---      ---
Aletti Gestielle SGR          0.1%     0.1%     ---       612
Ameriprise Financial Inc      0.3%     0.2%     3.5%      585
Argus Research Corp.          0.3%     0.2%     ---      ---
Bank of Tokyo- Mitsubishi     0.7%     0.1%     ---       615
Bantleon Bank AG              0.3%     ---      ---      ---
Barclays Capital              0.3%     0.2%     3.6%      627
BBVA                          0.2%     0.1%     ---       615
BMO Capital Markets           0.6%     0.2%     3.5%      610
BNP Paribas                   0.0%     0.1%     3.5%      596
Briefing.com                  0.2%     0.0%     ---       580
Calyon                        0.1%     0.1%     ---      ---
ClearView Economics           0.3%     0.1%     ---      ---
Commerzbank AG                0.2%     0.1%     ---       610
Credit Suisse                 0.4%     0.2%     ---       590
Daiwa Securities America      0.0%     0.1%     ---      ---
Danske Bank                  -0.6%     0.2%     3.5%     ---
DekaBank                     -0.1%     0.0%     ---      ---
Desjardins Group             -0.2%     0.0%     ---       610
Deutsche Postbank AG          0.2%     0.1%     ---      ---
DZ Bank                       0.1%     0.2%     ---      ---
First Trust Advisors          0.2%     0.1%     ---       609
Fortis                        0.2%     0.0%     3.3%     ---
FTN Financial                 0.2%     0.0%     3.3%     ---
Goldman, Sachs & Co.          0.0%    -0.1%     ---      ---
Helaba                        0.1%     0.1%     ---       610
Herrmann Forecasting          0.3%     0.1%     3.5%      596
High Frequency Economics      0.5%     0.2%     ---       590
HSBC Markets                  0.1%     0.1%     ---       600
IDEAglobal                    0.1%     0.1%     3.4%      610
IHS Global Insight            0.0%     0.0%     ---      ---
Informa Global Markets        0.3%     0.1%     ---       610
ING Financial Markets         0.0%     0.1%     3.4%      620
Intesa-SanPaulo               0.0%     0.1%     ---      ---
J.P. Morgan Chase             0.1%     0.1%     3.4%      650
Janney Montgomery Scott L     0.3%     0.2%     3.5%     ---
Johnson Illington Advisor    -0.1%     0.1%     ---      ---
Landesbank Berlin            -0.1%    -0.2%     ---       610
Landesbank BW                 1.0%     ---      ---      ---
Lloyds TSB                    0.2%     0.0%     ---       595
Maria Fiorini Ramirez Inc     0.1%     0.0%     ---       615
Merrill Lynch                 1.0%     0.0%     ---       605
Mizuho Securities            -0.1%     0.0%     ---       589
Moody’s Economy.com           0.2%     0.1%     ---       611
Morgan Keegan & Co.           0.1%     0.2%     ---      ---
Morgan Stanley & Co.          0.1%     0.0%     ---      ---
Natixis                      -0.3%     0.1%     3.4%     ---
Newedge                       0.3%     0.1%     3.4%     ---
Nomura Securities Intl.       0.3%     0.2%     ---      ---
PNC Bank                      0.4%     0.2%     ---      ---
Raymond James                -0.1%     0.1%     ---       590
RBS Securities Inc.           0.6%     0.1%     ---       650
Ried, Thunberg & Co.          0.1%     0.0%     ---       625
Schneider Foreign Exchang     0.1%     0.2%     ---       626
Scotia Capital                0.0%     0.1%     ---       590
Societe Generale              0.0%     0.1%     ---      ---
Stone & McCarthy Research     0.1%     0.1%     ---       615
TD Securities                 0.4%     0.1%     3.5%      610
Thomson Reuters/IFR           0.1%     0.1%     ---       605
UBS Securities LLC           -0.1%     0.0%     ---      ---
Unicredit MIB                 0.0%     ---      ---      ---
University of Maryland        0.1%     0.1%     ---      ---
Wachovia Corp.               -0.3%     0.1%     3.4%     ---
Wells Fargo & Co.             0.3%     0.1%     ---       620
WestLB AG                     0.2%     0.1%     3.4%     ---
Westpac Banking Co.           0.4%     0.2%     ---       615
Wrightson Associates          0.2%     0.0%     ---       625
================================================================

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

Steps taken by retailers to keep inventories lean are showing a bit of progress to accommodate to declining demand, as recent reports of early 2009 wholesale trade reveal.

As retail stores start sourcing their spring and summer merchandise, the National Retail Federation still expects a 5.3 percent rise in March retail container traffic from last month, a total of 1.07 million 20-foot-equivalent units (TEU).

At the same time however, such levels still fall below that of March 2008 by 7.4 percent – a trend that the trade group predicts to observe throughout the first half of 2009.

“This year’s numbers are going to remain well below last year because sales are still slow and most economists aren’t seeing a recovery before the second half of the year at the earliest,” said Jonathan Gold, vice president for supply chain and customs policy, in a statement released Friday. “Careful inventory management is a key to survival for retailers in the economic times we’re going through.”

And while retailers in some industries are still trying to shave off surplus inventory, rapidly declining sales have not made that task any easier to fulfill. A report released yesterday by the U.S. Census Bureau showed that in January, wholesale sales dropped more than four times faster than inventories.

Still, slightly declining wholesale inventory-to-sale ratios in a few categories – including apparel and miscellaneous non-durable goods – demonstrate that efforts made by retailers are still paying off, despite weak demand.

The 0.7 percent month-to-month decline in wholesale inventories also surprised economists. Seeking Alpha analysts had predicted a 1 percent decline in inventories, which now signals to them “either weaker consumption or stronger wholesale buying,” plus potentially good news later to be seen of retail sales.