I've been wanting to start my own little eBay business on my offtime but the concept is hard to understand for me when I think of the sellers on eBay selling a $250 (retail) item for $190, when they are such a small business they would be unable to purchase the item in bulk.
They buy stuff wholesale which means they get it real cheap in bulk. You don't have to buy 100 or more times to get wholesale. For some warehouses, you can buy 10+ items and get that huge discount. Somebody can just borrow $1500 to buy ten items at $150 per item ($250 retail), and turn around to sell it for $190. They'll get $400 in return. Ebay will make about 50 bucks and you'll probably pay like $150 interest. So you'll be getting 200 bucks in return. It's not hard to sell items. It's just hard buying items in wholesale.
Even you are a small business, you still can be a wholesale purchaser. The company I works at only have 7 employees, and yet we are business partner of HP, IBM, Intel, Fujitsu, and Cisco. We buy things from them and other retailers at wholesale price, and then we sell them at the market price on ebay. You have to work pretty hard to become a business partner for those companies, but it is possible.
I've got some clients that buy $10,000 worth of auto parts and sell that lot piece by piece for about $70-80,000.
