This is a comprehensive guide that will provide you with all the information you need to know about starting a resale business from finding inventory to effectively marketing your products.
Starting a resale business can prove to be a lucrative and rewarding venture, but it does require careful planning and execution and may take some creative thinking as well.
1.Choose a niche
While this isn’t a requirement you may want to determine what you are going to sell first. Are you going to focus on clothes will it be men’s clothes or women’s? You can also choose to focus on eras like vintage or antique items.
While there are so many niches you can choose to work with you can also opt for a hodgepodge of items as well and have some of everything in your store.
2. Determine your target market
Before you start sourcing inventory it is critical that you know what your target market would like so you can ensure you are offering these products to customers that actually want to buy.
Determine who your target market is and where they hang out the most on the internet or in physical locations.
Consider factors like age, gender, interests, marital status, salary, and buying habits when defining your target market. This can also help when choosing a niche to focus on as well.
3. Start sourcing
Once you have defined your niche and target market, it is time to start thinking about sourcing inventory. One of the most important things to consider when sourcing inventory is finding reliable suppliers.
Look for suppliers who offer high-quality products at competitive prices and who have a good reputation in the industry.
If you are going to be selling used items many resellers opt to shop at thrift stores, estate sales, and pallet sales. On the other hand, if you want to sell new items you may need to be a little more resourceful and find a good wholesaler.
Keep in mind when sourcing from a wholesaler you will usually have an MOQ or minimum order quantity and (in most cases) the more you purchase the more cost-effective an item will be. In this case, you want to ensure that what you sure you can easily sell for a profit because you do not want inventory sitting around and not making you any money.
You can find suppliers in marketplaces like Alibaba or trade shows, there is a list of them in my book: 30 days to Boutique which you can purchase on Amazon now.
In addition to finding one reputable place to source clothes, you want to find several. This is especially true if you are sourcing used items as in thrift stores there are new things to choose from every day!
Sourcing from various places offers you the opportunity to get a variety of products.
4. Attend a trade show
If your store is going to host new items attend a trade show, especially if there is one near you, even if you aren’t ready to purchase. This way you can network with other sellers and get a feel for what’s in the market and what sells well.
5. Decide on A store type
Nine times out of ten you are going to want to set up an online store as opposed to a brick-and-mortar store when just starting out.
Obtaining a physical location can put unneeded strain on your resources but both options have their own advantages it ultimately depends on your target market and personal preferences.
Setting up an online store allows you to reach a global audience and operate 24/7. On the other hand, a physical location allows shoppers to actually feel and try the products while browsing through your inventory.
If you can afford to have a brick-and-mortar store there is nothing wrong with pursuing both options and also opening your store online.
You can also opt to do physical markets as well, these will most likely be in during the summer months as many are outdoors so be prepared for the weather and for sitting around for hours.
6. Get on social media
If you haven’t already start a social media account so that you can start to drive traffic to your store as soon as possible.
Optimally, you should start your social media accounts as soon as you have a shop name to get the ball rolling.
Developing a strong online presence is critical to your success as a reseller. You can build a strong brand and create customer loyalty through social media.
7. Invest in a user-friendly website
If you can create an appealing website then get on it otherwise you may have to hire someone to do so for you.
When creating your website make sure you prioritize customer service and provide multiple contact options for inquiries and support.
8. Develop a pricing strategy
A critical step in starting a resale business is finding the right balance between profitability and competitiveness. Here are some factors to consider when determining your pricing strategy.
Research the market: take the time to research the prices of similar products in your niche to give yourself an idea of the average price range and help you remain competitive in the marketplace.
Consider your costs: make sure that you include all of the costs associated with acquiring and selling your inventory. This includes the cost of purchasing the items, any repairs or refurbishments needed, shipping or transportation costs, internet fees, gas, and any other fees that may occur.
Determine your profit margin: Decide on the profit margin you want to achieve for each item. This will depend on your business goals and the level of competition in your market. Keep in mind that higher-priced items may have a smaller customer base, while lower-priced items may require high sales volume to generate significant profits.
Consider marketing, discounts, and promotions: Offering the occasional discount or promotion is par for the course when reselling items as this can help attract customers and generate sales. However, you should be mindful of the impact on your profit margins and ensure that any discounts or promotions are sustainable for your business
Regularly monitor your pricing strategy and make any adjustments as needed. Keep an eye on market trends, customer feedback, and competitor pricing to stay competitive and maximize your profitability.
Figure out where you will store your items prior to bringing them into your home. Will you rent a storage facility, use an office, or a garage? If you are thrifting the items set up a system for cleaning the items as well.
Also, think about how you will tag and identify items.
Acquire the packing materials you will need. Make sure you add in the cost of a scale and postage as well.
Think about and write down all of your systems or Standard operating procedures (SOPs) so that if you are on vacation someone else can seamlessly find, package, and ship items for you.