1. Verify ALL suppliers found on the Internet

Don’t get caught by scammers.  This is a common stumbling block for people new to wholesale.  If you are searching for suppliers on your own (rather than using a wholesale directory like SaleHoo), it is CRITICAL to check authenticity before making a purchase.

Always spend the time to look for the following:

•       Search for the name of the website by going to http://www.whois.sc/. Most legitimate companies reserve their domain names for 3 to 5 years or more.

•       Do not deal with suppliers who won’t agree to use secure payment methods such as Escrow.com, Credit Care and Paypal Verified.

•       All real companies should have a land line number. Do not accept a mobile phone number alone.  Please check for a legitimate contact telephone number and that means ringing the number and getting an answer.

•       If you are still uncertain, ask other sellers what they have experienced with a particular company that you are targeting.

2. The foundation for success is thorough market research

You need to do thorough market research and your profits will double from the wholesale goods that you will buy. Start with 6-10 different ideas.  See what the item generally sells for by checking the completed listing searches on eBay. Use Yahoo’s free keyword tool http://inventory.overture.com to find out how many people are searching Yahoo for your product per month.  Take that figure and double it for Google.  Add these numbers together. If you get 10,000 or more searches per month for an item, this will indicate a healthy market.

3. The competitive edge goes to the Chinese suppliers

Essential sources for anyone wishing to make money selling online are the Chinese suppliers. It is a secret to gaining a competitive edge, because Chinese manufacturing costs are currently extremely low.  Dealing with China does have risks, but these can be alleviated if you place a small order first, use secure payment methods, get shipping insurance for 110% of the cost of the items, and use suppliers with a good reputation.

4. Calculate the REAL cost of your item

Don’t treat wholesale like a real business.  One big reason why people fail at the wholesale game is that they don't do the numbers. Take in account the shipping cost and insurance, eBay fees (or other advertising), Paypal and/or credit card fees (these can be a real profit killer), packaging costs and labor involved packaging, and the storage costs to determine the real cost of your item.  If you don’t accurately discover your true profit potential on an item, you will not reap the rewards.

5. Negotiate on shipping costs and save

Critical to importing success is shipping economically.  Take time to get a good deal on shipping.  Profits can easily get swamped in bad shipping costs.  If possible, negotiate CIF (Cost, Insurance & Freight) or DDP (Delivery, duty paid) shipping terms with your supplier as this takes much of the risk - not to mention organization - off your shoulders.  The most common shipping term is FOB (Freight on Board) but don’t be afraid to negotiate for a better rate.

6. A common stumbling block for liquidation and closeout

Always obtain the reasons for liquidation and closeout sales before you buy. Liquidation and Closeout sales can be a fantastic source for cheap products, but you usually have to buy by the pallet load and these can sometimes include broken or returned goods that aren't in saleable condition. To be safe, ask specifically whether broken items and returns are included before you buy.

7. Powerseller Advantage

EBay powersellers are able to command higher prices for their items than ordinary eBay sellers.  You need to aim to get and maintain powerseller status to get the best profits on your wholesale items.

8. Can you really afford to Drop Ship?

Someone taking care of packaging, wrapping and postage sounds great in theory but it can be difficult to profit using the drop shipping method.  Think about it, drop shipping can add another $2-10 to your costs - sometimes even 10% of the cost of the item.  By the time you add in eBay fees and any other costs, you may find it is not worth it.

9. Warehouse storage checklist

When locating warehousing to store your items, asset management is the most important consideration.  You may not believe it but items can go missing while in storage, causing massive disruption for you.  When comparing warehouses, ask questions specifically on how you will authorize the release of stock (by phone or fax?), what will happen if you need to cancel an order, frequency of damage claims, dust management, and whether there is an area you can use to photograph items.

10. Experience growth with a website and eBay store

About the Author: SaleHoo is one of the fastest growing product sourcing portals on the internet. It contains a database of drop ship, wholesale, closeout and manufacturing suppliers offering thousands of product suppliers to consumers! Located at http://www.salehoo.com, visitors are allowed to sign up for unlimited and lifetime access to the completely searchable database of products and suppliers. The database is regularly updated, ensuring that the latest retail products are always available for purchase and SaleHoo carries the BBB Reliability Seal!

Join SaleHoo Today for their Special Startup Offer!