Strategies for Buying Auction Lots & Reselling on eBay

By Prev Info - October 17, 2022

 The phenomenally successful eBay is the inexpensive storefront for many entrepreneurs. Just about anything is bought and sold on eBay. Many sellers procure their wares through traditional sources such as antique stores, estate sales and auctions, or wholesale manufacturers. But there is a newer breed of reseller who buys large lots on eBay then sells the items one by one on---eBay. This strategy can work extremely well; it can also backfire.

Strategies for Buying Auction Lots & Reselling on eBay

Know Your Market

Before attempting to purchase large auction lots on eBay to resell on eBay, it is imperative to know your market. There is no point in buying a large lot of, for example, generic crayons for a great price, then being unable to sell them because buyers prefer Crayola. Whether you want to resell art supplies, children's clothing or kitchenware, know your market. Know what items consumers are looking for and which brands are popular.

Do a search on eBay for the type of item you wish to sell---for example, "crayons." What types and brands are selling? Conduct a search that includes "completed listings." If all of the generic-brand crayons end with no bids, do not bid on the wholesale lot of generic crayons.

Costs v. Profits

Do the math before you buy and resell. For example, if there is a lot of 50 L.L. Bean jeans for $200, that means that each pair will cost you $4. Shipping costs $25, raising your cost per pair of jeans to $4.50.

Do a search for L.L. Bean jeans on eBay. If comparable pairs are selling for $10 each, then the $200 lot seems like a good deal. If the jeans are selling for $5 to $6 per piece, you could end up losing money. Remember, you might not be able to sell all of the jeans.

Search for comparable jeans on eBay, and choose "completed listings." If a third of the L.L. Bean jeans listings end with no bids, then you are most likely to sell two-thirds of the 50 jeans, or about 35. If jeans are selling at about $10 each, then:

$10 x 35 jeans = $350.

cost of auction to buy wholesale lot: $225.

$350 -- $225 = $125.

So, in the above scenario you will make a profit.

Remember, shipping costs are usually paid by the buyer. Sellers must take cost of items, amount they can sell for and likelihood of sale into account; also, eBay also charges fees to sellers and these must be included in your calculations. These fees vary.

Beware of Mixed Lots

Many wholesale lots on eBay are listed as "mixed lots." These are lots with inconsistent items. For example, a "mixed lot" of "children's name-brand clothes" may include some Gymboree and Eddie Bauer pieces. If the listing does not specify that all of the items are name-brand, then there are probably plenty of pieces that are lesser known or generic. They may also be less likely to resell, diminishing your potential profit. Unless and until you are savvy about the seller and the market, do not risk purchasing a mixed lot that does not explain each item in detail.



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