Product Sourcing for Ebay | Product Sourcing For Ebay: Compensation Procedures Pitfalls

One of the easiest ways of making money in your Ebay business is to choose good wholesalers for Ebay sellers to become your partners. However, there are several different compensation schemes in the product sourcing for Ebay marketplace. This can often be a pitfall for the unwary.

One of the most common compensation programs requires you to set your own retail rate. The dropship vendors set a fixed unit wholesale price for each product they offer while you set your own markup.

So, in your Ebay auction:

Minimum acceptable bid = vendor’s fixed unit price + your markup

Every time you sell a product, you earn at least your markup. This type of scheme is straightforward and easy for you to track. However, there are other compensation programs in the marketplace, so you need to read the fine print.

Here are some questions you need to answer about your vendor’s compensation scheme before you sign on the dotted line:

• Is payment by check only? Is direct deposit available?
• Is there a minimum amount you need to earn before your vendor pays you your commission? Do you need to earn at least $100 before they start paying you? While $100 is common, $500 is excessive.
• Do you need to handle taxes yourself? Or will your vendor withhold taxes on your behalf?
• Are you required to make a long term commitment? For example, do they want you to produce 3 consecutive months of sales before they send you the first check?

Product sourcing for Ebay is a good Ebay money making strategy. Click here to find a good list of wholesalers for Ebay sellers.