Among the different kinds of businesses that new entrepreneurs are starting these days, many choose reselling business. There are various reasons for this trend including low amount of risk involved and minimum investment.
But that’s only true if you use the right tools and methods in the process, which also could save you lots of time and hassle.
With online shopping becoming more and more popular recently, businesses that deal with retailing and selling to consumers tend to get more attention and popularity as well.
While many people are looking for a special kind of business which better match their financial goals and specific lifestyles, an entirely flexible opportunity like reselling could be a great solution for a wide range of new entrepreneurs.
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What is a reselling business?
It’s a business model where you as a reseller buy products from the manufacturer in order to sell them to the buyers. A reseller could also be considered as a middleman between the product manufacturer and consumers.
Because of the low investment required to start a reselling business, it’s a great option for new entrepreneurs and everyone looking for a way to be their own boss.
One of the main advantages of this business type is that it’s not necessary to create any product when running this kind of business. Instead, you could simply choose from a great range of products to display them to your customers on your online store.
Advantages of a resale business
Various reasons are out there which might make you think more about launching a reseller shop.
As you learn new things about this type of business, you’ll realize that it’s never been easier to become a reseller and have lower business expenses and various product choices due to the new ecommerce platforms out there to help you.
Let’s look at some of the key reasons why you should start an online resale business:
- Setting your own profit margin: as one of the great benefits of becoming a reseller is that you have a great control over product pricing. As a result, you could decide how much profit you’d like for any of your product by pricing them accordingly.
- Lower financial costs: it’s somewhat obvious that financial risk in a resale business is much lower than a manufacturing business for a variety of reasons like lower startup fees, more control over inventory and the lack of need for lots of human resources.
- Less or no inventory: the requirement to stock products doesn’t exist in all situations when you run a resale store. In fact, it largely depends on your suppliers whether you need to order bulk inventory or could just forward the orders to them and let them handle the packaging and shipping job.
- Quick business launch: due to the minimum requirements to launch your online store, you could start your reselling business in no time, especially if you’ve chosen a supplier which enables you to not hold stock. All you need is to select products from the manufacture and add them to your online ecommerce store.
- Diverse selection of industries and products: since you don’t want to manufacture any product yourself, you could try any industry or product to see which one makes you more profit. In fact, you could start your business with just one category of products like shoes or clothes, and then grow your store by adding other categories such as handbags, jewelry, accessories and so on. That’s because you don’t to worry about extra manufacturing costs or additional inventory fees.
What’s the difference between reselling and dropshipping?
Although these business models are very similar, and as a result many people confuse them with each other, you should know that each of these terms is referring to its own specific type of business.
Here are the main differences when comparing dropshipping vs reselling:
- Packaging and shipping: when you’re a reseller, since the products are in your hands, or in your inventory to be exact, you are responsible for packaging and shipping your products to your customer. Whereas in dropshipping, these are among the responsibilities of the manufacturer which you transfer the order to.
- Profit margin: resellers usually order products in bulk from manufacturer. In addition, there is more control over shipping and packaging expenses. That’s why they could expect higher margins when they resell them to their customers. On the other hand, when dropshipping, because ordering could only be done in single items in most cases, you couldn’t get bulk prices and as a result your profit margin in much less compared to reselling.
- Stocking: resellers need to have some place for products inventory, while dropshipping doesn’t need any inventory since all the stocking and inventory management works are done by the manufacturer.
As you could see from the above, dropshipping could be considered as a method for order fulfillment without the need to keep products inventory.
Although no inventory could seem a huge advantage for dropshipping, which is in fact, but there are some disadvantages in this business model such as difficulty for building brands, lots of competition and low profit margins.
With that being said, you could easily have higher profits margins when reselling products online, as well as a less competitive market.
In addition, using social media and other popular forms of online marketing, you’re able to build your brand gradually as you expand your customer base.
Top reselling business ideas
Tons of business opportunities are out there when you want to start your reseller journey.
Since you don’t need to invest in developing and manufacturing of your own products, you could try different reselling ideas whether you want to have a side hustle for extra income or want to launch your new home business.
Car accessories
The new types of cars such as driverless and electric cars, and new technologies, make the car accessories industry a great opportunity for those looking to find a profitable niche for their new reselling business.
Just by some market research and understanding your audience, which is car owners of course, you could find reputable and trustful suppliers which could provide you great products to resell to your online store customers.
Car vacuum cleaners, car seats, car trunk organizers, car interior lights, car phone holders, and car dash cams are among the huge number of car accessories which you could sell to your car lover consumers on your web store.
Pet supplies
Each day, more and more people own pets and therefore the market for pet related products is a huge one. These products could range from pet clothing to food, to bowls and leashes.
Cat and dog accessories and toys are among the most popular pet products demanded by many customers. But pets don’t limit to dogs and cats. Fish, rodents, birds, etc. are a few of other pet examples out there, which you could branch into in order to have less competition and hence more profit margin.
One of the great things about selling products to pet owners is that usually there are lots of communities and groups related to different pets on the Internet which could be a great starting point for you to find your target audience and market your products.
Clothing
Clothing has always been a great opportunity for entrepreneurs and business owners to profit from since it’s always in demand no matter what different circumstances or situation are people experiencing.
Although deciding which clothing niche works best for your business might need some time and effort. But you could easily try different opportunities in this market whether reselling children, men or women clothing.
Another thing necessary in this resale business idea is having an eye for fashion and popular styles of the season which could enormously help you to build a faithful customer base.
Shoes
With so many models of shoes in the market, such as trendy sneakers to stylish heels to athletic shoes, it’s quite likely that you find a niche which could make a lot of revenue from. Just be careful when deciding which shoe supplier you choose for your new shoe reselling business.
Just by browsing famous retailers such as Amazon and Walmart for shoes, you could get a good idea of what type of design and style sell best in any particular season. That could help you better choose your products when adding items from any shoe reselling supplier.
Jewelry
For many, jewelry reselling business might sound a little frightening due to the higher price tag of items in this line of business.
But as you think more about it, you’ll realize that this could work as a benefit for your business as well, since higher prices could mean higher profit margins and more control over product pricing overall.
Also, there is huge market for cheap jewelry as well, which you could find lots of suppliers for in case you’d like to work for the kind of target audience interested in affordable jewelry items such as rings, necklaces, bracelets and so on.
Is it always necessary to hold product inventory as a reseller?
The good news is that, in short, no, it’s not always necessary.
The reason is that, with the help of some ecommerce platforms and business app integration, such as Oberlo, the management of product packaging and shipping is done for you.
In other words, using these services, you no longer need to worry about product shipments or even product stocking.
So you could see that you could have an online store for selling any type of product made by other manufacturer, which no longer requires you to be constantly thinking about high shipping fees, additional costs or expensive inventory expenses.
How much money can you earn as a reseller?
The amount of money which could be made in the resale business, like many other businesses, depends on several factors such as the time and effort put into the business by you, what you resell and how you resell.
For example, just take a look at this young reseller who made over a million dollars recently selling ordinary items such as video game consoles and swimming pools.
How about this couple who makes hunderds of thousands by treasure hunting through garage sales, thrift stores and other great sources and reselling them online?
In fact, the profit in this business is so huge for many resellers that after a while they simply quit their day job in order to focus more on their new business and increase their revenue even more.
So depending on whether you’d like to do this business part-time, full-time or as a side hustle, the outcome could be varied a great deal.
Do you need a license to run a reseller business?
Regarding licenses and legal advice, it’s highly recommended to refer to your local, state or federal/national laws regarding businesses in general and reselling business in particular.
But in the US, when resellers have a resale license, they are exempt from sales tax when buying items. In addition, in this case, customers have to be charged for sales tax by the reseller.
Is it a good idea to resell products on eBay, Amazon, or other reselling apps?
To resell online, there are a huge number of marketplaces and websites which you could use to start reselling your products.
These places range from more renowned ones such as Amazon, eBay, and Poshmark to less known ones which might be more popular in a specific niche such as clothing or shoes.
But the important thing to consider is that before thinking seriously about any of these places to run your business, you should pay attention to the short-term and long-term advantages and disadvantages.
As you might already know, as soon as you make your listing in any of these apps you could show your products to the audience already visiting these places.
You couldn’t expect lots of sales at the beginning due to the similar products being listed by your competition. And almost always, there are lots of resellers with similar items on these places, many of them started several years ago.
So in order to stand out in this competitive resellers’ crowd, you should make huge effort to increase your sales.
Moreover, each of these marketplaces has their own set of rules and fee/commission structure for listing your items and product sales, which could play an enormous role in your overall profit while reselling on them.
On the other hand, if you start your own online store, you have more control over your overall website design, how you would like to show your products, banner ads, landing pages, special discounts, etc. compared with when you use other sales channels to resell your items.
And you might think that at first, you don’t have enough visitors coming to your site to buy from you. That may be true. But remember when we said earlier that you need to stand out in reselling apps and marketplaces to increase your sales?
Put the same amount of effort into your own shop and you could get better results in terms of traffic, sales and more importantly brand building, which isn’t truly possible on these reselling marketplaces.
In addition, companies like Amazon and eBay, constantly update their rules and terms regarding reselling and the costs and fees involved. And that could affect your reselling business a lot in the future, if you just rely on those channels which aren’t totally in your control.
So in the long-term, you could build a more successful online business by investing in your own sales channel, which is your reselling store.
Our recommendation would be using an ecommerce builder platform such as Shopify to create your reselling store, which is also able to integrate with lots of payment options, sourcing apps, and business services which could give a huge boost to your online business.
Where to find suppliers for your reselling business?
After choosing your niche and what type of items you want to sell in your resale store, you need to find suppliers which could provide you the items you need for your store.
Now you should know that there are 3 main types of suppliers which act differently:
Wholesalers
These are suppliers which you could buy items from in bulk. Since they provide wholesale products, you could expect that you get lower prices compared to other sources available.
Alibaba is one of the best examples of a huge marketplace and directory of wholesalers and suppliers. There you could find companies specializing in different niches and mostly manufactured in China.
Distributors
Distributors are like wholesalers, but they buy their products from manufacturers and act more like a middleman between manufacturer and resellers/consumers.
Some activities related to product preparation such as branding, labeling, and marketing might be done by distributors.
For example, providing millions of wholesale products from a variety of wholesalers and distributors, Worldwide Brands is an enormous directory of wholesale suppliers and distributors.
Lots of online stores, eBay or Amazon merchants do their products sourcing through this website.
Dropshippers
When you don’t want to worry about inventory and stocking products, you could look for dropshippers which merely supply you the products but send the products directly to your customers as order fulfillment.
Due to the extra costs involved in works done by these suppliers, you might encounter a bit higher prices compared to other wholesalers and distributors. But for some, this additional cost definitely worth it.
Oberlo is a great example in this field. It helps you take your reselling business to the next level by providing you the needed tools to import dropshipping products to your online store.
Using this dropshipping service, which integrates with AliExpress (also a great supplier for a variety of products) and Shopify (popular ecommerce site builder), it’s not a difficult task to find and add trending products to your online reseller shop.
Steps to launch your reseller store
You need to have some place to show your products to your customers, so that they could browse them and purchase them from you.
As you might have guessed right, now is the time to build your reselling store.
It’s super easy. You just need to use the right tools and services.
Step 1. Sign up with an ecommerce site builder
There are tons of website builder platforms on the web. You just need to look for one which provides you the best value for your money by offering useful tools and services for creating your store, integrating with other business services, and processing your customers’ payments.
Now, when it comes to starting an online reselling store, Shopify is one of the best among its competitors. Also, there are lots of successful entrepreneurs and business owners who’ve built their 6-figure or 7-figure income businesses using this ecommerce platform.
On Shopify, you’ll be provided with tools for choosing your reseller business name, logo, store design, etc.
So sign up with Shopify and create your account.
Step 2. Add wholesale products to your store
Another simple step in this tutorial is filling your online store with products in order to resell them to your buyers.
But don’t worry since one of the great tools of the Shopify platform could help you with importing products directly from the supplier to your website.
After entering your Shopify account, you could add various products to your online shop right away.
Choose ‘Products’ menu from the dashboard on the left side. You could access wholesale products and add them to your e-commerce store, using the Oberlo interface.
After adding all the items you needed from the wholesale marketplace, you could edit their titles, details, etc.
Step 3. Change your store design
Customizing the design of your resale store is really easy using Shopify themes.
These are the designs which you could choose from Shopify Marketplace and use them on your website.
Also, you should think about adding more pages (such as contact us, about, FAQ, and so on) to your store to give it a more professional look.
Step 4. Add your domain name
It’s better to use a domain name for your online store, instead of default subdomain on Shopify which looks like this: https://store-name.myshopify.com.
Either redirect or transfer your domain (registered through Godaddy, Hostgator, Bluehost, etc.) to Shopify. If you’re just a beginner on this topic, you could get help from related tutorials on Shopify or across the Internet.
If you don’t have a domain name already, you could register one from Shopify itself.
Step 5. Choose your store payment and other settings
Now, there are lots of other settings which you could access and change through your Shopify account. Be sure, to check out all the necessary guides and tutorials and educational videos to take your reselling business store closer to getting your first sales.
How to grow your online resale business?
As you might already know, launching any business is just the starting point. And the reselling business is in no exception.
The difficult part for any startup business is getting customers. That’s where a great marketing strategy comes into play.
But don’t worry. As there are lots of methods which could help you increase your online store traffic and get sales.
Choosing the right supplier
When it comes to reselling other manufacturers’ products, it’s very important that you choose carefully your suppliers.
That’s because this could have a great impact on the image you’re building for your store as a brand.
Also, to retain your current buyers and get new ones, you need to provide great service as an online reseller by selling high quality products with competitive prices.
Focusing on your target audience
The more you could understand customers’ needs, behavior and preferences, the more success you could have running your business as a reseller.
Gender, age, work and educational background, favorite apps and social media, online shopping behavior etc. are among the important factors which you could focus when trying to better know your consumers.
After enough researching in these areas, you marketing campaigns will be more successful due to choosing right platform and ad specific for your products.
The process could you better pick and price your products so that you’ll have a higher chance of earning maximum profit with your ecommerce business.
Understanding your competition
This could help your business from the start, as you could learn a lot from your competitors.
Store design, product selection, pricing, marketing strategies, and so on are just examples of what your competitors could teach you for your new reseller business.
Using content marketing
The content on your ecommerce website could mean a lot when it comes to engaging your customers.
This could include your online store layout, text ads, videos, blogs and other content on social media related to your online business.
In each step of growing your business you should pay a huge amount of attention to creating a captivating and attractive content in order to keep your audience engaged. After that, you could expect to have more and more customers each day which could in turn increase your business revenue.
Taking advantage of other marketing methods
You don’t need to limit your efforts to just content marketing. Although it’s very important but there are lots of other ways to grow your business brand and acquire more customers.
Pinterest, Instagram, Facebook, and YouTube are just the starting point. Think about other platforms which are popular in your industry.
Try other platforms like Reddit and TikTok, for example, if your audience is younger and regularly visit these websites.
The more visibility you could get from different sources of traffic, the higher your chance of getting new buyers for your products.
Overall, find out about other marketing methods used by other resellers in your industry so that you could repeat those for your reseller business as well.
Conclusion
For many people looking for a way to make money from the Internet, starting a reseller business might sound like a great idea. That’s because reselling is low-risk due to the somewhat low amount of investment needed to launch it. Moreover, many people even run their reselling store from their home.
After doing enough research to find your niche, you could launch your online store in no time, and then fill it with your selection of products imported through resale business tools mentioned earlier.