March 16, 2015 by Andrew Minalto - 3 Comments

Should you sell SMALL or BULKY items?

small-vs-bulkyCan you make money selling bulky items online? It’s a good question and one that I get asked regularly by my blog readers and customers. And while I do cover this topic in detail in my Easy Auction Business video course, I wanted to do a separate blog post on it as well, to help as many people as possible.

Before we get into the advantages and disadvantages of selling small VS bulky items, let’s first define what constitutes a small or bulky item in the first place. Obviously, there are no precise dimensions to stick with and it’s all very subjective but still, in my opinion, a small item is something you can send off to your customer as a letter or large letter in Royal Mail’s shipping formats.

The next size up is what I would call medium sized, which are items that fit Royal Mail’s Small Parcel size dimensions and only then come the really bulky and oversized items. To give you a better idea of my general classifications, here are a few product examples so you can see what falls into each group:

Small items:

  • jewellery
  • nail decals
  • video games
  • screen protectors
  • tickets

Medium size items:

  • shoes
  • headphones
  • trousers
  • portable HDD
  • mobile phones

Bulky items:

  • computer monitors
  • small pet cages
  • shower units
  • instrument cases
  • home cinema speakers

Oversized items:

  • weight lifting benches
  • chicken hoops
  • large tents
  • furniture
  • mobile sheds

In the context of this article, we’ll consider the first two categories small items and the latter two bulky items, just to keep things simple. But I will still mention some variances within each category as there’s obviously a noticeable difference between say jewellery and shoes.

But now, let’s go over, in detail, the advantages and disadvantages of selling small or bulky items on eBay and eCommerce in general.

Small Items

Most people who start selling on eBay stick with small items for 3 simple reasons:

  1. They’re easy to import from China and ship via courier services;
  2. It doesn’t require a large storage space;
  3. Easy to send to end customers in the UK, Europe and rest of the world via Royal Mail.

All of these are valid points and it makes sense why so many new eBay sellers start out with such items.

But this does create a problem, right? Yes!

As the barrier to entry is so low, you have to deal with more competitors in most small item niches compared to bulky items (as not that many people are able to/choose to work in these niches). And this is actually the biggest disadvantage of working in a small item niche as chances are you’ll be competing with lots of other sellers.

This isn’t the case in all niches of course and if you do proper market research, you can still find small item niches with a reasonable level of competition. But talking generally, then yes, small niches are usually more competitive due to the lower barrier to entry.

I do want to point out one thing about shipping small items via courier services from China (or other countries) – nowadays it only works if the items you source are REALLY small! By really small I mean an item that you can fit a lot of into a package that doesn’t weigh more than a few KGs. Jewellery is a prime example of such a niche as it takes very little space and you can have a large order shipped in a relatively small package, which means a very low shipping cost PER ITEM.

But if we look at bigger, but still small items, like shoes for example – it just isn’t that cost-effective to use a courier service. You can do it of course, but you’ll end up with a very high landed cost and will find it hard to compete with sellers who import such items via sea freight.

Most people are afraid of using sea freight because it sounds too complicated… well it isn’t!!! With the help of companies like Woodland Global, it works almost like a courier as they will take care of the customs clearance procedure and deliver the goods to your door. The only real difference is the time it takes as while most courier companies from China will get your order to you in just 3-5 business days, with sea freight you have to be prepared to wait 30-40 days.

In some niches this long waiting time can be avoided with the use of Air Freight, which is something in between courier and sea freight in terms of cost and delivery time. It will take just 5-10 business days for goods to arrive but you’ll pay more in shipping fees compared to sea freight hence this shipping method is more suitable for small/medium sized items that are VALUABLE!

For example, if you sell external hard drives – they’re quite heavy and expensive (in terms of the cost per piece) but not that bulky. If you order, say, a few hundred units worth a couple of thousand pounds, air freight would be the best shipping method in terms of price VS delivery time. So you really have to compare all 3 shipping methods for the items you plan on selling so you can find the best compromise.

Another plus for small items is Product Photography. It’s very easy to take great looking pictures for small items using any camera or even a smartphone, using just white paper for the background and natural light as I show in my product photography tutorials here. With bulky, large items you’ll need a more sophisticated photo studio set-up to take decent images.

So all in all, it’s obvious why small items are so popular – there are many advantages and only one downside which is increased competition. So why would you even consider looking into bulky items?

Bulky Items

I will start with the negatives first:

  • Shipping options.

There’s only ONE way of importing bulky items from China and that is of course sea freight. You’ll never achieve high profit margins if you import bulky items via courier or even air freight as the shipping costs will simply be too high. And if we talk about oversized items, be prepared to import a full 20ft or 40ft container to make it cost effective.

  • Storage.

Bulky items require decent storage space, as simple as that. But this does not necessarily mean that you need to rent a warehouse for this. No, if the items are not that huge you can store them in your spare bedroom or garage and if that’s not a possibility, you always have the option of using a fulfillment house to store and ship your items.

  • Product pictures.

If your supplier can’t give you high quality product images to use on eBay, Amazon or your own online shop, you’ll have to take pictures on your own or outsource them to a professional photographer. This is obviously more expensive and complicated compared to small items which you can easily handle on your own.

  • Shipping to customers.

With bulky items, shipping via Royal Mail won’t be a viable option so you’ll have to use couriers and sometimes even special oversized couriers, depending on the size of your item. This can sometimes mean quite high shipping costs to get the item to your end customer.

  • Reduced target market.

With most bulky items you’ll be stuck with UK customers only (or whichever country you’re based in) as sending such bulky items abroad will be very expensive. You can of course offer EU wide delivery on eBay for an added cost and there will be people who still purchase from you but sending a reclining chair to someone in Canada, for example, really isn’t an option.

As you can see, bulky items do come with a list of problems… and that brings us back to the earlier question – why would you want to even consider selling them? Because there are some good advantages too:

  • Less competition.

This will obviously vary from item to item but in general, in bulky item niches the competition will be smaller compared to small items simply because not that many people want to deal with bulky items (for all the reasons I’ve just covered).

  • A bigger choice of niches to work in.

Yes, when you include bulky items in your market research process, you basically double the amount of options you have to choose from. There are countless bulky items out there, such as household goods, sports equipment, technical products, leisure goods etc. – you really do have a much larger scope to find the perfect niche for you.

  • Better margins.

If you do order bulky items in proper quantities and ship them via sea freight, you’ll achieve much better profit margins compared to small items.

  • Higher profit per order.

Most small items are cheap (not all of course) and you can’t make huge profit per item sold, which means you have to sell a lot of items each day to make a decent amount overall. With bulky, more expensive items you can make £30, £50 and even £100 per item sold which means you need to sell a lot less items to make the same total profit.

I hope you see now that bulky items can still be a good option to go with if you’re prepared to deal with the few negatives. Again, most people are afraid of getting into bulky items because they think sea freight is something very complicated but it’s not! And now that Alibaba has introduced Trade Assurance protection for select suppliers, it’s safer than ever to order such bulky products from China and ship them via sea freight to the UK.

Conclusion

This pretty much sums up my thoughts on Small VS Bulky items and which is better to sell on eBay, Amazon or your own online shop.

One thing that I didn’t mention yet, for a reason, is your buying power but this is actually an integral point and your budget will be the most important factor when deciding on the size of the items you’re looking to sell.

To put it simply – if you’re working on a very small budget, like less than £2k, you should forget about bulky items altogether. You simply won’t be able to order in a high enough quantity to warrant sea freight costs, which makes the whole thing unviable.

There are always exceptions of course but I’m trying to give you a general guideline to use here – the more money you can invest in stock, the more advantages you’ll gain from dealing with bulky items.

Not all bulky items are expensive of course, there are many such items that are actually very cheap in China BUT then again, you have to consider the shipping cost and sending one or two pallets via sea freight isn’t going to be cost-effective and will leave you with a high per item landed price. With bulky and cheap items, you really need to order at least one 20ft, if not a 40ft container, to get the lowest price possible.

So my advice is to stick with small items if you’re working with a very limited budget and consider bulky items only if you can invest at least £2k-£3k in your initial stock purchase. If you want to deal with oversized items that require a full container load order, you have to have at least £10k at a minimum. These numbers are approximates of course but are still a good guide.

Lastly, another important thing you have to keep in mind is your cash flow. If you have £500 and have to spend all of that on your stock purchase, your only shipping option is courier as otherwise you won’t be able to place re-orders and receive new stock in time.

Remember, sea freight takes on average 30-40 days so you have to bear this in mind ALL the time. Very often you have to add another 30 days for your supplier to manufacture your order so that means a total of roughly 2 months from order date till when you actually receive the items.

Why is this so important?

Well because if you work hard and build up a sales history on your GTC listings, you simply can’t afford to be without stock for too long a time, as if you do – you’ll lose your positions in search results. So you always have to think 2 steps ahead and plan your cash flow so that you can place re-orders in time to keep your rankings.

Ok, that’s it for today. If you have any questions or need any advice, feel free to leave a comment below and I will personally try to help you out.

Thanks,

Andrew

3 Comments
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  1. Hi Andrew,

    Do you know any shipping company like “Woodland Global” functioning in Australia?

    Thanks

  2. Hi Andrew

    Excellent Post.

    I have this idea of selling something Small / Light on eBay which I can make a £1 Profit on after the deduction of all Costs / Outgoings (other than Income Tax) i.e. Manufacturing Costs in China, Shipping Costs, Import Duty and eBay / Paypal Costs, Postage to Customer.

    My ‘wet finger in the air notion’ (based on available risk capital) is £1 to £1.50 Per Unit Purchased, to cover both Manufacture and all those Costs I’ve listed above). i.e. Total Cost / Expense Per Unit of £1 to£1.50 to reach my Customer’s Hands.

    Wanted to get a (very rough) feel for how much I might realistic need to spend on each Imported order, so as to stand a chance of achieving this and while remaining Competative.

    In crude terms, I’m envisaging (say) £1 Per Unit to Manufacture (including – ideally – minor product customisation – made by the Manufacturer – e.g. Perhaps just a modification from the standard colour to one of my choice) to achieve some degree of Own Branding. Then around 50p to cover the other Costs and Expenses already listed.

    I’m hoping to resell whatever product type I eventually settle on at around £1 Profit Per Unit (realistic margin ambition??) and – in general terms – wondered what ‘typical order size’ I should be contemplating, so as to be able to use low cost import (I’m guessing Sea Freight) in order to compete reasonably well with other eBay Competitors I encounter.

    Initially (for Market Test) I’ll buy ‘Retail’ from Competors, but thereafter I’m guessing that I should not be attempting this idea at anything less that £1000 Per Manufacturer’s Order (or might I get away with £500 Per Order)?

    No idea whether such a Plan is feasible when Shipping Costs, Import Duty and other typical Stock Acquisition Costs are factored in. Nor whether a £1 Profit Marging after Costs (e.g. Import, Listing, Paypal and Consignment to Customets) is possible?

    As you have experience of so many Product Types / Profit Margins, I’m guessing you’ll have some idea if the example figures quoted are anything like realistically achievable.

    Thanks in advance for any reply you can manage and – again – for your very useful Post.

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