This post may contain affiliate links and I may receive a small commission when you click on those links. You can read my full disclaimer here.
Starting a business from scratch can be a daunting task. You have to find employees, sales, design a website, and of course…make money! Starting with nothing can feel like a terrifying thing too, So I’ve written this guide to help show you how to make money reselling.
Reselling means something different for everyone. Some see it as a way to maximize the value of products. That is, buy them at wholesale prices and put them up for sale for a higher price on eBay or Amazon. Others see resale as a way to earn money doing very little work.
How to Make Money Reselling
Starting a resale business is more of an art than a science. It’s not something you can learn overnight – it takes trial and error find the right balance. But if you follow these steps you’re sure to be successful!
Step One: Choose Your Niche Market
A niche market is a specific market that the market leaders do not serve well. For example, running an accounting service for doctors. It would be a niche market that large accounting firms do not serve.
The first step is to identify a niche market for your business. This can be anything from a small city or neighborhood to an entire country or even the whole world. There is a particular traffic pattern that emerges when people look for something like this.
When they localize distribution channels, you can tackle development easier since you’re already in the right place. When there are multiple niches, making sure the market is well-established can be more challenging.
Step Two: Find Products to Resell
To make money reselling, you will need a product or service already in the market. You can resell software or hardware designed for one purpose only. This is a very low-risk strategy as you are only creating a reseller business. That is if your only goal is profit-making.
Companies reselling used goods fall into this category. It’s always best to research whether a product is still in production before buying it. This way, you know that there may be extra costs beyond the buying price that you won’t be able to take advantage of when reselling it.
Here are a few things to look out for when choosing a product.
- Current marketplace trends
- Hottest selling categories
- Product promises to the consumer
- Make sure your not breaking any copyright laws
- How profitable is your chosen niche
Step 3: Research And Contact Suppliers
Research the quality of the product you are considering purchasing. Then contact reputable suppliers and installers of high-quality products. It is a good idea to send a brief inquiry to several suppliers before making a purchase.
These companies will often take your business at face value. And be more willing to upgrade or provide more services in exchange for a higher order. Make sure you ask about quality control measures in your products. Also, make sure the state authorizes the suppliers you choose.
Step Four: Set Up Your Distribution Channels
Distribution channels are the backbone of digital distribution. Find out which are available to you and target them with any opportunities you have. Your distribution channels are the channels through which you will sell your product or service to your audience.
You can have multiple channels. It’s usually best to focus on a few because they’re easier to test and understand. Find out what the main weaknesses are of each channel and find ways to counter them.
Distribution channels can fall into two categories. The first is physical distribution and the other online distribution. The type of product you choose has a bearing on the best distribution channel for you. Here are the most popular ones.
A. Physical Distribution
- Sell at yard sales
- Consignment stores
- Flea Markets
- Fundraising Events
- Arts and Craft Shows
B. Online Distribution
- Online marketplaces, like eBay
- Facebook Marketplace
- Online classified ads, such as Craigslist
- Resale Apps such as Poshmark
Step Five: Promote Your Business
Social media has tremendous power to promote your business. It allows people to see what products you have available for sale and what other people are buying. It also lets others know about new trends and ways that you are improving your business.
Step Six: Keep n Eye on Your Finances
Keep an eye on your finances. Because when your income and expenses are coming in different ways, it can be hard to keep track. Make sure you’re aware of the different types of shipping options available for your products, as well as how those costs may change over time. Sometimes, it’s easy to overlook an occasional $5 or $10 difference when it comes to bills — but it adds up over time.
A reseller business usually requires little capital investment. The main things to consider are:
- How much inventory do you need?
- Are you willing to sell and fulfill orders yourself, or will you outsource?
- How much inventory management overhead will you need to save on buying inventory in the future?
- How much shelf space do you need for your product?
- Are there any return policies or endorsements that might affect your ability to resell the item?
This is important since reseller businesses have limited capacity or limited revenue. The aim is to increase sales while minimizing overhead costs.
How to Make Money Reselling: Conclusion
It’s not for everyone, but reselling products are a great way to bring in some extra cash. If your good enough it can become a full-time business. Hopefully this post has given you an idea of just how to make money reselling.
Read about How to Make Money Flipping Sports Cards for a similar earning opportunity!