So you want to start a resale business? If you've been considering striking out on your own in this realm, you're not alone. Ever since the beginning of the COVID-19 pandemic, online shopping has seen the biggest boom in history â€" and not just for big-name box stores.
According to Digital Commerce 360, consumers spent $870.78 billion online with U.S. merchants in 2021, which is a 14.2% increase from what they spent in 2020. The good news? Online shopping isn't going anywhere anytime soon, meaning selling goods online might very well become your next lucrative side hustle.
The bad news is that the market is pretty saturated.
'The number of online sellers have doubled since the pandemic,' said Kim Alsbrooks, owner of the Etsy shop FernvaleVintage. 'It's not a lazy person's game. Whether you sell at a flea market or a shop or online, it's something that needs a lot of attention to succeed.'
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How to Start a Resale Business
So how exactly can you start your very own successful resale business that will stand out amongst the crowd? We've got the scoop on all that and more right here.
1. Do Your Research
This might sound obvious, but the best way to start a successful resale business is with a bit of research. Mainly, you'll want to figure out what you want to sell and where you want to sell it.
'You'll learn and evolve as you go, but taking some time to research as much as you can beforehand is helpful,' said Kari Durm, owner of vintage Etsy shop The Cherry Attic. 'Compare platforms, other sellers' shops, various resell items, pricing, etc.'
2. Follow Your Passions
Once you've started the research phase, you're going to want to determine exactly what it is you plan to resell. Maybe its books, clothes, antiques, decor â€" you name it. But rather than just picking something arbitrarily (or because you think you can make lots of money selling it), Durm recommends selling something that actually interests you.
'I think you should have a passion for what you're selling as opposed to just copying what someone else is doing because they seem to be doing well,' Durm said. 'A huge misconception is that reselling vintage is an easy, quick way to make a lot of money and there's nothing further from the truth. I've had many weeks where 30-plus hours were spent only on shipping. It can quickly become exhausting and if you don't love what you're selling, keeping that pace could be difficult to sustain.'
3. Think Logistics
With an idea of your prospective goods in mind, now's the time to figure out exactly how you plan to sell things: Online, in-person, or some combination thereof? Decide this early on and it will in large part determine how you spend your time growing your business.
For example, online business owners tend to spend lots of time on shipping and advertising, while an in-person resale business will require you to physically be on-sight for a certain number of hours per week to sell your goods.
Given these limitations, many successful resellers suggest sticking to an online-only business model.
'People are used to shopping online, and it also means you can work from home and set your own schedule, while maintaining a huge customer base,' Alsbrooks said. 'You could also do both (online and in-person) but you'd probably need employees to delegate certain tasks to, and it would be a lot of work.'
Another bit of logistical detail to work out? Figuring out how and where you plan on storing your inventory of goods.
'Additional shelving and stackable plastic tubs are helpful, but if you have a small space and plan to keep a large amount of inventory on hand, you might need to get more creative with storage,' Durm said.
4. Source Your Goods
No matter how you plan on selling your goods, you're going to need to know how to source them. For this, Alsbrooks recommends taking stock of what's locally available to you.
'It can be as simple as shopping at your favorite thrift stores or checking out local flea markets, large and small,' she said. 'I've become very familiar with a local auction house that sells in my price range and always has interesting quality auctions. Then there's my favorite â€" estate sales.'
When it comes to sourcing online, Alsbrooks cautions against it.
'You will seriously be surprised â€" good and bad â€" at half of what you get, when you finally see it in person,' she said.
With the number of people buying online, this can also make it harder to get a good deal, which in turn can affect your ability to turn a profit. Alsbrooks recommends focusing on buying things in person for a good price, and scouting out which locales offer the best goods at the lowest prices.
5. Pick a Platform
With your supply chain figured out, now's the time to get your business established. While setting up a brick and mortar will involve a lot of extra steps (like finding a space to rent or buy, applying for a business license in your community), getting set up online is actually fairly simple. All you really need to do is pick a platform.
While there are plenty of these to choose from (notably Poshmark, eBay, and Gazelle), the resellers we spoke to said they prefer to use Etsy.
'Etsy has been the only one I've stuck with,' Durm said. 'I know quite a few people who do well on eBay, but I just couldn't get my shop going there. I also prefer Etsy's overall look and user interface over eBay and other platforms.'
Alsbrook also prefers Etsy, but cautions that it takes more work to be successful on Etsy than it would on say, eBay.
'If I post something on eBay, it might take all of three minutes,' she said. 'A single listing on Etsy takes hours. Why? Items must be cleaned and in top condition, photographed well, researched (listing description has to be interesting and accurate) and you do your own SEO. Not to mention buying time, and the pressure to get good reviews. But the profit of the same item is at least twice what you'd get from a bargain basement like eBay.'
Keep in mind that you also have the option to cross-post your goods on multiple platforms, but this will add to your overall workload, both in time spent posting and in taking down sold inventory.
6. Hone Your Skills
After logistics, comes goal-setting, and a great way to approach this aspect of your business is by focusing on what skills you want to develop in order to succeed.
'Understand the process and fully address each job skill required,' suggests Alsbrooks. 'You will never get found among the competition if you just open an e-commerce shop and then forget about it and expect people to find you and buy. It's not that easy. It's very competitive out there, especially post pandemic when the number of online shops more than doubled. If you're not near the top of the game, it will be difficult to be found online.'
To keep an edge on the competition, Alsbrooks recommends focusing on developing actionable skills like perfecting your product photography, business branding, and even your SEO abilitiesâ€"all of which will help you appear in more search results and as a result, gain more loyal customers.
7. Master The Financials
Last but not least, you're going to want to wrap your head around the financial aspect of your business. This includes things like tracking your income, setting aside enough money for taxes, and paying whatever fees are required from your chosen platform (or city) to comply with the legalese of owning a business.
No matter what you end up selling, starting a business will take time and work. If you can get really clear about what you want your business to be, and then focus on attaining the skills necessary to make it successful, you'll be halfway there.
Looking for more tips on starting a small business? We've got loads of them here.
Contributor Larissa Runkle frequently writes on finance, real estate, and lifestyle topics for The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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