Chapter 5: Buying Wholesale and Selling on eBay®

If you want to make money on eBay® (http://www.jdoqocy.com/click-1259217-2202641) selling physical products, I’ve got a few great tips for you. But first you should know that you need to be prepared to do manual labor, packaging and shipping goods, exactly the type of thing I despise. But if you are willing to, you can easily make a minimum of $1 5k-$30k per month in profit by buying the hottest consumer products from wholesalers, and reselling to other wholesalers, or selling them individually on eBay®. So many people claim to offer wholesale lists, the best suppliers, etc., but don’t even bother. Their sources suck, and 99% will STEAL from you. My suppliers and tips below are the real deal.

SaleHoo (http://leaphea007.salehoo.hop.clickbank.net/) - Membership to SaleHoo gets you access to hundreds of secret wholesalers from China who sell the hottest electronics, clothing, sports equipment and more in bulk, at huge discounts. You can then resell these products on Ebay for profits and become a PowerSeller.This is how the other guys do it.

A. Wholesale Buying Rules
First, a few ground rules to abide by, which will save you plenty of time and money. Unfortunately, many people violate these rules every day, and lose thousands of dollars to scammers.

Wholesale Rule #1 - NEVER buy products from anyone who wants to be paid by Western Union. If someone asks for payment by Western Union, do not respond to them, and block their email. I know their low priced merchandise is tempting, but it is a scam EVERY TIME. Western Union advises the following on their website:
Make sure you know to whom you are sending money. If you are purchasing goods or services and paying through the Western Union network, it is your responsibility to verify the reputation and legitimacy of the seller. Western Union is not responsible for the non-receipt or quality of any goods or services. Common Western Union scams include, but are not limited to the following:

Scam # 1: Seller asks you to pay by Western Union and tells you it will be safe because you can make out the payment to the name of one of your friend’s or relative’s names, but put the seller’s address on the payment. You will then tell the seller the control number (identification #) of the payment so he can go to Western Union and verify you have made the payment. Once you receive the shipment, you will go to Western Union and change the name to the seller’s real name so that he can pick up the money. Why it’s a scam: Once the seller knows the address or control number of the payment, he can go get the payment and send you nothing. Many Western Union agents in foreign countries never ask for identification.

Scam #2: Seller asks you to pay by Western Union and tells you to make the payment using Western Union’s “secret question” feature. This feature is designed so that the Western Union agent will ask a secret question to whoever is picking up the money, and he must get the answer right in order to collect the money.

Why it’s a scam: Again, many times Western Union agents do not ask the question, and only care if the person knows the address or control number, especially outside of the United States. Western Union even advises on their website not to rely on the secret question feature.

Wholsale Rule #2 - NEVER use an escrow service other than Escrow.com. Escrow.com is verified & recommended by eBay®, and I have used it successfully many times myself. Note that Escrow.com will handle transactions in ANY country in the world, except Romania and Indonesia. Fraud is so rampant in those countries that Escrow.com cannot safely help you transact with sellers in those countries. What escrow.com does is ask both the buyer and seller to agree on terms.The buyer must then send the required funds to escrow.com. Once escrow.com receives the funds, they notify the seller to ship the goods. Once the buyer receives the goods, if everything is correct, the buyer notifies escrow.com to release the funds to the seller. Escrow.com is safe for both buyers and sellers because the buyer does not have to release their funds to the seller until they receive shipment and verify everything is correct. It is safe for the seller as well, because even if a buyer claimed non-receipt of the shipment, the seller could provide escrow.com with the tracking number for the shipment and a shipping manifest showing what was sent and received. In which case, escrow.com would release the funds to the seller.

Escrow Scam #1: Seller tells buyer that they prefer an escrow company different than escrow.com (http://www.escrow.com/) . The seller tells the buyer the website address of the escrow company they prefer, and says that this is the only escrow company they trust. The buyer goes to the website and it looks legitimate, well designed, and promises safety and security.

Why it’s a scam: The website is actually owned and operated by the seller or the seller’s associate! Once the buyer sends their money to the so-called” escrow” company, they have actually sent their money straight into the pocket of the scammer.

Escrow Scam #2: Seller tells buyer that they will do the deal securely through Squaretrade.com.

Why it’s a scam: Squaretrade does not act as an escrow service. They do not approve deals or hold funds for anyone. All Squaretrade does is allow eBay® sellers to place a Squaretrade seal on their auctions, which shows that the eBay® seller is willing to allow Squaretrade to help resolve any disputes. Anyone who says they will use Squaretrade like an escrow service is a fraud.The seller may even send the buyer a” spoof” email, one that looks like it came directly from Squaretrade. However, it is a fake.

Escrow Scam #3: Seller tells buyer they will use a shipping service called “ TNTand that the buyer should send their payment to TNT, in which case TNT will hold the payment until they inspect and ship the seller’s merchandise to the buyer.

Why it’s a scam: TNT is not an escrow service. They do not hold funds or inspect shipments on anyone’s behalf. The seller may even send the buyer a “spoof” email, one that looks as if it came directly from TNT with a tracking number for the shipment. However, it is a fake.

Wholesale Rule #3 - Always request that you pay a seller by one of the following methods:
1 Credit Card
Safe because most credit card companies will refund your money if you file a fraud complaint.
2 Escrow.com
Safe because it protects both buyer and seller, as mentioned in Rule # 2
3 PayPal.com (http://www.escrow.com/)

Usually safe for purchases under $2,000, because PayPal will let you use a credit card and will verify the seller’s address, banking information, and identity (do not send money to someone through PayPal if they are listed as” unverified” ).

4 Letter of Credit (LC)
Basically this is like using your bank as an escrow service. For example, you will go to your bank and apply for a letter of credit for the dollar amount you need to pay the seller. Your bank will freeze these funds in your account, and issue a letter to you and the seller’s bank verifying that they are holding the money, and will transfer it to the seller’s bank account as soon as delivery of the goods to you is confirmed. Make sure you use a “Standby” LIC.

5 COD — (Cash on Delivery)
This is when you pay the shipping company directly when the goods are delivered. The shipping company then gives the funds to the seller. The shipping company will not leave the goods with you unless you pay them.
Be very careful with any seller that requests payment in advance byT/T (telegraphic transfer), also known as bank wire.This is a tricky one because some legitimate international sellers do require money byT/T in advance. Sometimes it is a deposit, and sometimes they want the full amount. Before sending money by T/T, make sure you ask for the following:

- Seller’s full name
- Seller’s address
- Seller’s telephone number
- Seller’s company name
- Seller’s business license number
- Seller’s bank’s name & telephone number
-A scan or faxed copy of seller’s identification card or driver’s license
- References from companies the seller has worked with before, preferably in your country
Tell the seller you need this information to run a thorough background check. You can then use a service such as lntellius.com (http://www.escrow.com/) to run a background check on them. You can also hire a buying agent in the seller’s country to go to the seller’s physical location and buy the items for you in person, and then ship them to you. Do a Google search for”international buying agents”to locate buying agents that you could possibly work with. Most charge a reasonable fee to securely buy for you.

Rule #4 - Get verified. To encourage sellers that you are an honest and legitimate buyer, you can do one or more of the following:

1 Get a DnB (http://www.escrow.com/) (Dun & Bradstreet) number. You can do this by applying for a “credit builder” account at dnb.com. Dun & Bradstreet will verify your company information including company name, address, owners, and ongoing debts (credit cards) or lines of credit.

2 Get PayPal (http://www.anrdoezrs.net/click-1259217-10418112) Verified — Open a PayPal.com account. Once you have one, apply to become a verified premier member. PayPal will verify your address and identification by depositing 2 small amounts of money to your credit card or bank account. You must then tell them what the amounts were, to prove that you are the owner of the card or bank account.

3 Get an AlibabaTrustpass Membership - see the list of wholesale sources below for more info.

4 If you are in the USA, become a member of the Better Business Bureau Online (http://www.bbbonline.com/) .
Rule #5 - Open an account with ReadNotify.com. For just $3.99 per month, or $24.00 per year, Readnotify (http://www.bbbonline.com/) will tell you the actual origin of emails you receive from any seller. It works like this: if you were emailing me at info@therichjerk.com, you would instead send an email to info@therichjerk.com.readnotify.com. By adding .readnotify.com to any email you send, once the recipient opens the email, you will receive an email showing exactly when the person opened the email, and their location in the world. For example, mine would show California, USA. And, the recipient will not see the .readnotify.com extension on the email you send them. It will be invisible.

Read Notify.com (http://www.bbbonline.com/) is an extremely useful tool because many sellers claim to be in the USA or UK in order to appear more legitimate by acting as if they do not reside in a country well known for internet fraud, such as Romania or Indonesia. When I use this tool and see that someone has lied about their location, I will not do business with them. When using this tool you will likely come across many scammers from Romania and Indonesia, who claim to be in the UK or USA. They will also be suspicious because 99% of the time they will be demanding money by Western Union, using one of the common scams I spoke about previously.

Rule #6 - If a seller tells you he has a website, run a “whois” check on the website to see if the seller’s name and address match the internet registrar’s record of the owner. You can do this easily by going to GoDaddy.com. Scroll to the bottom of the page and select the “Whois Lookup”link. Enter in the website and GoDaddy (http://www.escrow.com/) will tell you who is registered to the domain. Beware of anyone who doesn’t have a name and address listed in the whois of their domain, or of anyone who just recently registered the domain.

B. Wholesale Supplier List
1 SaleHoo (http://leaphea007.salehoo.hop.clickbank.net/) Membership to SaleHoo gets you access to hundreds of secret wholesalers from China who sell the hottest electronics, clothing, sports equipment and more in bulk, at huge discounts. You can then resell these products on Ebay for profits and become a PowerSeller.This is how the other guys do it.

2 Worldwide Brands (http://www.myaffiliateprogram.com/u/worldwid/t.asp?id=9734) I highly recommend Worldwide Brands as our top direct supplier, not only because they carry over 4,000 products, but because they also DROP SHIP for you.That means they ship to your customers, and you do not need to keep any inventory or do any shipping.They are the ONLY wholesale source
that is an eBay® Certified Solution Provider,and they are also a member of the Better Business Bureau.

3 NAWCA (http://richjerk.nohop.hop.clickbank.net/)
NAWCA (North American Wholesale Co-Op Association) is another fantastic source for over 1 00,000 products via their 2,000 distributors, many of which do drop-shipping for you.The NAWCA was founded by a collective of wholesalers and distributors in 2001. Highly recommended for eBay® sellers.

4 Ingram Micro (http://www.ingrammicro.com/)Ingram Micro is the second largest electronics distributor in the world.They are a class act, and offer very good pricing.

5 Tech Data (http://www.techdata.com/)A huge electronics distribution center in the USA.

6 Avus (http://www.avus.com/) A $1.3 Billion Dollar distributor in the USA.

7 Allied Electronics (http://www.alliedelec.com/)Carries over 1 35,000 electronics parts.
I found these next few independent suppliers through the trading communities listed in the next section. Sufficed to say I lost a ton of money with fake suppliers until I found these guys. This short list alone is worth several thousand dollars to anyone who knows how hard it is to find legitimate suppliers of “hot” products at great prices (see next page).

8 MKidder Enterprises Contact: Matthew Leeder
email: mleeder@mkidderenterprises.com
Sells a huge array of consumer electronics. Contact for price list and availability. Wi 961 Tear Drop La., Kaukauna,Wisconsin, 54130, United States. leederkidder89.trustpass.alibaba.com
Ph: (920) 202-2668

9 DnM Imports
Contact: Derek Clark
email: derek@dnmimports.com
Plasma Televisions, iPods, PSP and Notebook Computers. Sample pricing here. 261 Oakridge Drive, Cartersville, Georgia, 301 21, United States
www.dnmimports.com
Ph: (770) 500-8828 - Fax: (770) 386-0955 - Mobile: (678) 471-5853
10 April Hutcheson
Contact: April
email: hutchmysale@ntelos.net
Distributor/wholesaler of 1 00% authentic, excellent quality shoes. Honest, reliable, excellent customer service.
Covington,Virginia, 24426
Ph: (540) 962-2712



C. Buyers and Sellers Communities
Tip -You can easily find suppliers on the following sites, then turn around and sell the same merchandise for a nice profit to another buyer you find on the same website. After you receive your merchandise from your seller, post a trade lead with a higher price than you paid. The seller’s trade lead that you responded to will likely be pushed way down and out of sight after a few days. Many times you will find a good buyer willing to pay more than you paid, and they won’t even know you just got the merchandise from another seller on the same website a few days ago! This is great because you never even have to unload the pallets of merchandise you receive.
Of course you could always unload the pallets and sell different quantities, or sell individual units on auction sites such as eBay®.com, or you can sell them individually at your own retail shop and make a real killing.

1 Alibaba.com (http://www.alibaba.com/)
Alibaba is the premier source for wholesale buyers and sellers to connect on the internet.They receive hundreds of thousands of visitors every day, and hundreds of new trade leads are posted there every day. You should checkthis site EVERY DAY and/or sign up for trade alerts for whatever you are buying & selling.

Your priority should be to deal with Alibaba companies that are Trustpass verified. You can also become an Alibaba Trustpass member yourself. For a small fee, Alibaba will have a 3rd party credit agency contact you and verify your name, address and company info. Once you are an Alibaba Trustpass member, many people will take you more seriously.

2 Exporters Singapore (http://www.exporters.com.sg/)
Similar to Alibaba, but requires all members to pay a fee after a 30 day trial, which helps to keep scammers out.
3 Power Source Online
Power Source Online is a computer parts trading exchange for dealers, brokers and services companies. You can find cheap computer parts and components for resale.

C. Buyer & Seller Communities (http://www.powersourceonline.com/) NOTE - The rest of the communities listed below are similar to Alibaba, with less traffic, but it is advised that you review and join as many as possible, so you can find any niche suppliers.
4 EC21 (http://www.ec21.com/)
5 eTradeShow (http://www.etradeshow.org/)
6 Global Sources (http://www.globalsources.com/)
7 eBizAsia Link (http://www.ebizasialink.com/)
8 EC Plaza (http://www.ecplaza.com/)
9 Rusbiz (http://www.ecplaza.com/)
10 lmporters.com (http://www.importers.com/)
11 Trade India (http://www.tradeindia.com/)
12 Fuzing (http://www.tradeindia.com/)
13 Offer2l (http://www.tradeindia.com/) D. Useful Wholesale Resources
1 Export 911 (http://www.tradeindia.com/) - Common Importing/Exporting Terms
2 Local Profit (http://www.tradeindia.com/) — A wholesale search engine
3 Uline (http://www.tradeindia.com/) — Discount shipping supplies
4 eBay® Discussion Board (http://www.tradeindia.com/) - Escrow / International trading forums with good advice on avoiding fraud.