Ultimate Guide: How to Start Your Reselling Business 101
Want to escape the 9 to 5 rat race?
Then you should think about becoming a reseller online!
While you’re probably wary of starting your own business, the benefits of reselling online massively outweigh its risks.
You can start reselling business with minimal investment and low upfront costs. The business structure allows you to make money while working from the comfort of your home at your desired hours.
Cool, isn’t it?
Today, you will learn how to start a reselling business from scratch.
What is a Reselling Business?
A reselling business model involves sourcing products or services from a supplier and reselling them to the end consumers.
The business model is usually virtual, where the reseller acts as a middle-man between the manufacturer and the buyer, reselling items on a markup. That’s how the business makes a profit.
Reseller vs Retail
What differentiates a reseller from a retailer is that the latter holds some kind of physical inventory to resell. Moreover, they usually have a close relationship with the supplier.
However, a reseller does not have to hold any physical inventory to be resold. As the business structure is online, all you have to do is set up an online store, source the products from a supplier, and resell them at a mark-up.
Moreover, resellers do not have close relationships with the manufacturer.
How to Start Your Own Reselling Business?
Now that you know what a reselling business is, let me walk you through a guide to start your online reselling business.
It boils down to the following steps:
Map Out Your Resale Store Business Plan
Creating a detailed business plan is the key to building a successful business online.
So, find out the answers to these essential questions before you may start your reselling endeavour:
- Are there any barriers to entry: high start-up costs or legal restrictions in your area?
- What are the ongoing costs of the business? Do you have enough cash to bear them?
- What will be the name of your resale business? Is there a domain name available for it?
- Is your business entity going to be an LLC or sole proprietorship?
- Which market segment are you going to target?
- What profit percentage do you plan to charge on products?
Besides, this would be the best time for you to enrol in short courses to supplement your knowledge of reselling. Training platforms like Udemy and YouTube can be a great starting point for this.
Obtain Relevant Operating Licenses
Not having the required permits or licenses can cause your business to run into legal trouble.
To prevent this, head over to SBA’s website to determine your state’s operating license requirements and the fees associated with it.
Also, you will have to register your reselling business for state and federal taxes right from the get-go.
That’s because the income generated from resale is taxable. So, failure to pay your income tax can put you in the wrong spot with the IRS.
Find a Profitable Niche
No matter which industry you want to deal in, there are always two kinds of items you can sell to your customers:
- Commodities: These include products and services which are used daily and are in high demand by consumers.
- Niche Items: These are meant to target a more specific market section and offer more significant branding potential.
There are numerous resellers on e-commerce platforms that earn their living by selling commodities only. While they sell well, the profit margins of these goods are low and the market is heavily saturated. It means that if you’re planning to go this route, you will have to face some serious competition.
On the other hand, Niche products don’t sell as much but offer a considerably higher profit-making opportunity.
However, for a niche product, you have to choose something that solves your customers’ problems. If your product is unique, there will probably be less competition for your business. Thus, more growth opportunities in the future.
So, in deciding the best things to buy and resell, it would be a brilliant idea to have a combination of both commodities and niche products in your store.
This way, you can get the best of both worlds.
Best Reseller Business Ideas:
When talking about reselling business ideas, the product you chose to sell can either make or break your business.
Some of the top reseller business ideas you may go with include:
- Home accessories
- Car accessories
- Pet supplies
Apart from this, you will have to come up with clever ways of branding your store items. Branding helps increase your chance of making more sales and building a loyal customer base.
Where to Buy Products for Resale
These days, product reseller opportunities have reached a new high thanks to the ever-increasing influx of sellers on e-commerce platforms.
It means that you can easily find plenty of trustworthy suppliers online to source your products.
These include resources like Alibaba, Ali Express, Doba, and National Dropshippers, to name a few.
Besides these platforms, there are many online tools available to help you streamline your reselling experience.
For instance, Oberlo offers a drop shipping service that links up directly to Shopify. Doba and Salehoo help connect resellers with dependable product manufacturers so you don’t get scammed.
How to Open a Resale Store Online
You need to find a platform to set up your store to resale products.
When it comes to the online marketplace, two big names are way ahead of their rivals in the game- Amazon and eBay.
Both these platforms are trendy as they let you quickly set up seller accounts on their websites.
Amazon allows you to deliver your products to the customers via two channels- Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM).
For a reselling business, FBA makes a good option as you probably don’t own a place to store and ship your products. Instead, you can send your products to Amazon, which will deliver them to your customers in their branded packaging.
However, the FBA service is not free, and Amazon charges you a fee for it, depending on the items you’re shipping.
On the other end, eBay offers no such service, so shipping your customer orders depends entirely on you.
In terms of selling fees, Amazon is more expensive than eBay. For professional accounts, you have to pay a monthly cost of over $39.99 per selling product. eBay charges a flat rate of only $0.30.
How to Connect with Your Customer
One of the top tips on reselling to generate sales is to communicate with your customers effectively.
Interact with your old and potential customers on social media channels like Instagram, Facebook, and YouTube. It can significantly enhance customer experience and add value to their shopping experience.
These platforms also let you advertise in exchange for a small fee that can give your business the boost it needs.
Besides this, you should also set up a dedicated website for your reselling business. It will serve as your personalized e-commerce platform and a way for your customers to contact you directly.
So, become a reseller, be your own boss, reach a global audience, and grow your business from the comforts of your own home.
If you still have any queries about reselling business, don’t hesitate to reach out to us. We’ll be glad to help.