Many of the biggest Powersellers on eBay make their money by dealing in low margins, and making up for that by selling large quantities of product. To do this means that you have to be buying in bulk quantities, and the best place to do that is a wholesaler.

Finding really good wholesalers is a very difficult task, as they hardly ever advertise. No retailer will ever want to divulge the source of his stock. Wholesalers can be found in directories on the internet, although most of these directories are only available to paying members of the site. The most likely place to find good wholesalers is a good offline trade magazine.

One of the difficulties of running this kind of operation on eBay is the problem of physically handling the goods. There is a lot of time consuming effort involved in taking the orders, sorting through the stock to find the item ordered, packaging the item well enough to ship it, and taking the item to the mailing point to be shipped.

If you are looking to build a sizeable business, you are going to have to put in a lot of hard work, or else you are going to need to employ staff to help you. This brings a whole new range of headaches.

One possible alternative for those whose business is reaching these sort of levels is to use a dropshipper. A dropshipper is a type of wholesaler, in the sense that a dropshipper will take items in bulk from a manufacturer, and then sell them on to retailers.

A dropshipper is completely different from a wholesaler in the way they pass items on to the retailer. In fact, the retailer never sees the item at all. He just takes the order, and passes it to the dropshipper for the dropshipper to fulfill.

The advantages of this kind of operation are obvious, the greatest of which is the reduction of risk. Until you get an order, you don't pass it to the dropshipper, so you are not tying up capital in stock you may never sell. You are also saving yourself from needing employees, or from a huge amount of menial work in physically shipping the goods.

Dropshipping will, of course, cost more to fulfill an order than the equivalent price from a wholesaler, but you are getting so much more for your money. Look at your business and your goals and make a smart decision based on the return on investment.