Is buying wholesale to resell on eBay a viable business model?

[Kristijntje]

I wonder whether buying wholesale for resale on eBay is really as attractive as some folks think it is, what with thousands of sellers offering the same kinds of new merchandise on eBay - merchandise they're buying from similar wholesalers at similar prices.

The wholesalers from whom the sellers obtain their goods are constantly bringing new customers on board - which means they're creating competition for their customers. Fanning the flames are eBay experts of all stripes who preach buying wholesale as the route to financial independence.

There has to be a saturation point, a point at which the market is so crowded with sellers that the average number of customers per seller drops below a profitable level. When this happens, sellers will be faced with some hard choices. Some may opt to cut their margins. This may result in price wars. Other sellers may add sales incentives, like free shipping or bonus merchandise. Either way, they'll be making less money per sale...

full article: http://www.auctionbytes.com/cab/abu/y207...bu0187/s03