I like to touch upon different types of liquidation merchandise and today I want to talk about wholesale cosmetics, or makeup as some might call it. Throughout my stint within the surplus industry I’ve often been asked about shelf pull cosmetics. Most of the time people are looking for shelf pull brands such as Mac, Stilla, Clinique, Smash Box, and other similarbrands. Higher end cosmetics do have a high resell value, but I have to tell you – lower end, drugstore brands sell just as well…if you know how to market the items.
Today, you’re in for a treat. OK, maybe not a treat, but at least an interesting case study of sorts. I’m going to show you a relationship between two parties, specifically a liquidation supplier and an eBay auction seller. Both have been working together for over a year now. I’m going to keep each party’s name a secret, but you can find out who I’m talking about in our liquidation course, The Liquidators Guide.
The eBay seller is using the wholesale supplier to ship to his auction customers, in other words, a dropship relationship. In this business model, the eBay seller does not buy any stock until it sells on eBay. Once the eBay seller has a winning bid, he purchases the stock and then has the wholesale supplier ship direct to the eBay buyer…are you with me so far?
Take a look at the following eBay auction where this seller is auctioning a lot of 250 pieces of Maybelline cosmetics with a buy it now price of $367.97 and a starting bid of $327.77
Now let’s look at this eBay seller’s supplier who is selling this same wholesale makeup lot:
Our eBay seller is buying this stock at the lowest price the liquidator is advertising, which in this case is $1.05 per unit. The eBay sellers cost for the 250 pieces totals $262.50. If the eBay seller has a buyer who wins with an opening bid of $327.77, he makes a gross profit of $65.27. If the eBay seller gets someone to “buy it now,” his gross profit will be $105.17.
The eBay seller has final value fees and Paypal fees to subtract, but after all is said and done…he is making money using this supplier to dropship. I can tell you that I have reviewed this sellers history and he has sold hundreds of these small lots of drugstore brand cosmetics!
In closing, as stated above, everyone always asks for big brands like Mac and Lancome, but the average, everyday brands sell just as well. The eBay seller in this case study is doing very well sourcing shelf pull makeup. If you want to read more about this seller and review other case studies, check out The Liquidators Guide.