The What, The Why,The How

How does this program work

In my blog on How to Start your e-commerce Business from Home, I showed you how to start your business. So this blog is about where I get products to grow my e-commerce home-based business.

Next Steps

The thing that stops people from operating their e-commerce business from home is the product they sell. So they either run out of product to sell or they find products with little to no profit in them

If you recall in my post mentioned above, I tell you to sell whatever you have and then find products from family friends, neighbors, etc. Therefore you can have a very profitable business and invest little to no money of your own just get consigned products.

The largest recycle tech companies called e-cyclers do exactly that. So they never use their own money. They sell other people’s products in large quantities by the truckload and bring those items into their huge warehouses. In other words, giant companies like Google and Amazon want the product removed from their warehouse and send to someone else. So these giant companies just want it out, they can get their money later with no problem.

Consignment.

The above section is called consignment. My definition, in this case, is someone wants me to remove product they don’t want and don’t have the space to store. In other words, they want me to store it and then send them the money later. This is called a consignment. The movement of someone else’s product to me without transacting money. I don’t own the product, I’m just hired to sell it at a price and give a percentage back to the consignor. I am the consignee. So I don’t do this business because I like to own things at the right price instead of consigning them to me.

What next

So let’s say I have a truckload, 26 pallets of someone else product in my warehouse. So, first of all, I need a warehouse which I have several. Once the product lands someone needs to break it down and inventory this product. Therefore it takes manpower and warehouse space. It’s not possible to consign quantities without this.

Big companies consign their product to consignees’ warehouses for two reasons. They don’t want it and they need the space for a new product.

The consignees want the product because he does have space and if/when he sells it he gets paid. In other words, he gets to keep his cash and not have to buy inventory.

Not for you and I

So that’s where I buy a lot of my product from. Big consignees that also need to sell product and get their space back. In other words, they need to turn this consigned inventory into cash.

So on my blog How to Start your e-commerce Business from Home with ZERO CASH, I used the consignment model as a way to get your hands on more products to sell, when you have little to no money of your own.

So you can not at this time consign quantities of products because you don’t have space or labor force to process the product and inventory it.

How Consignment works and Pros/Cons

Pro

  1. You don’t need cash
  2. Small space to store is Okay
  3. If priced right then fast turn around
  4. Make money with no capital investment, just time investment.

Cons

  1. Limited space so you need a warehouse for large quantities
  2. Price is negotiated, so the consignor may want more than the product is worth.
  3. You can’t sell because the consignor paid too much for the product so no profit.

What’s the best way to get the product.

There are several ways to get products to sell through your e-commerce business and here they are.

  1. Consignment
  2. Purchase directly from suppliers. The manufacturer is better than the distributors.
  3. Buy from other retailers or wholesalers who need cash or have too much inventory
  4. Don’t buy through Auctions. B Stock Supply leaves little to no money for you.
  5. Call using the phone. Email is not as good as calling. Find out who’s in charge.
  6. Once you make contact get a list of products and make offers based on market values.
  7. Purchase product using Paypal first. No wire transfers. This protects you.

Market values

Everything you buy to sell on your e-commerce business, not your e-commerce store because you will start selling on eBay or Amazon. So all these products have value. It’s up to me to determine what that value is. In other words,  it’s me that decides, but I need to know what the market tells me it’s worth. Therefore the market gives me the current “market value” and I make my offer to buy based on that number.

If the Market value tells me $1oo is what an item sold for and is selling for, then that’s what it’s worth, and no more. Therefore the prices products actually sell for today is what it’s actually worth. So I Need to buy well below this $100 figure and still make money. I want to buy around $50 or less. So less is better because as I will show you, there are other expenses I have to consider before I buy.

The price you sell your product for is not what you actually get because Amazon takes about 10% plus you’ll usually sell free freight because that’s what your competitors do. So a $100 sale price item will net you $85. Minus what you paid $50 = $35 profit on a $50 purchase. Which is a pretty good profit assuming you sell the product quickly. Less than 30 days.

The Stock Market

The stock market values the price of one share of stock in a public company, moment by moment. So this is called the current price or value of the stock in let’s say Apple Computer. Therefore at any time of the day, I can look at ng Apples’ current market value and buy at that price or not.

The beauty of the stock market is market values are posted instantly. So this is called a Liquid market.

Liquid versus Illiquid Markets.

There are two types of Markets. Liquid and Illiquid and they both have their Pros and Cons. So liquid markets are publicly traded stocks Like Amazon or  Apple. You can buy these companies today and sell them immediately because the markets are liquid.

Illiquid markets are where I make most of my money buying non producing assets that sellers want to get rid of. So in my case tech inventory like computers and phones.

Why Illiquid markets

I make my money in Illiquid markets with a yearly income ranging from $500,000 to a million every year for the last 10. This is a 37% net profit. In other words, buying non-producing tech inventory in the form of computers and phones with related accessories. So these are mostly used items but can be new as well.

The technical name for what I do is called Asset Recovery or turning assets/inventory into cash for the seller/supplier. So in this example, I am the buyer. I then turn around and resell these items retail on Amazon or eBay, after checking them and cleaning them for resale.

It works because the value I pay is directly related to the market value based on eBay/Amazon’s past and current sales data.

Technology products.

I buy tech products because of several reasons.

1. They are in demand and sell fast

2. Big brand name products like Dell and Apple have a built-in customer base

3. People buy older tech products because they don’t need new ones.

4. The price of my products are sometimes less than half or new items

5. New technology makes older technology somewhat obsolete but still works depending on what you need the tech for.

Conclusion

Inventory or products can be found almost anywhere. So it depends on what category you are interested in buying and reselling. I chose Technology because it’s a demand item and the profits are pretty fat. Sometimes I make over 100% on my invested dollar. In other words, deciding to sell comic books or athletic footwear is Okay too, I’ve done both, as well as jewelry and coins.

So the key to your success is your ability to find, buy, and then resell using the internet and major platforms like Amazon and eBay. I do this all from home and make a solid 6 figures net income year in and year out. You can too.

 

Mike Addis

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