6 Tips to Start a Profitable Reseller Business

Reseller businesses have been on a steady rise. This is because it’s fairly easy to become a profitable reseller. In this article, we’ll explain how you can become a reseller, what are the benefits and which types of reseller businesses you should look into. 

Understanding the benefits and downsides of a business beforehand is extremely important. Reselling isn’t for everyone, but if you have the time and are willing to invest the effort and money, you might experience amazing results.

What is a reseller?

A reseller is someone who buys physical products from suppliers and sells them to their own customers at a profit. The reason why customers don’t go directly to the supplier is that you make the whole experience more pleasurable. 

Source: Freepik

Maybe you’re selling products that are otherwise unavailable for people in a specific location, or you offer a quicker sales experience. 

A reseller could:

• Have a well-curated loyalty program
• Help the customers find the right fit for them
• Provide a better description of the products
• Offer a money-back guarantee
• Provide discounts for multiple purchases
• Have a shorter shipping wait

It’s important that you find the key element that makes you stand out from others and makes you a great choice for potential buyers. 

Once you have that down, a question a lot of beginnings will ask themselves is - Do I need to have a large storage space? Not necessarily, and we’ll explain why. 

Advantages of being a reseller

Being a reseller means that you have more flexibility than the supplier. You can start your business fairly quickly (depending on the laws of your country). 

All you need to do is register your business and get any permits necessary, and figure out your tax situation. After that, create your online store. 

Once you do that, you can start reselling. You don’t need inventory or storage space, because you can work as the middleman between the supplier and the end customer. That means that you don’t have to carry inventory, but can buy products only once you get a request for them. 

That way, you’re not losing money and you can still move products quickly. 

Being a reseller means that you can work from wherever you want. You don’t have to stick to a specific location, all you need is a laptop and an internet connection. This allows you to work with suppliers from around the world because you can work while travelling. 

Another advantage is being able to sell a wide range of products. You don’t necessarily have to stick to a single niche. You can sell products that the same target audience would buy, as well as going completely wide and covering products that don’t necessarily complement each other. 

Lastly, being a reseller comes with low financial risk. You don’t need a large starting investment, nor do you have to take out loans. Since the risk is minimal, you can easily go into reselling without having to commit to working for a long time period. 

That means that you can work on reselling seasonally, without committing to it full-time. 

Figure out your profit margin

The only way your reselling business will work is if it makes you money. If you’re not making a profit, i.e. are losing money or breaking even, you’re not doing it right. This isn’t like the restaurant industry, where you know that you’re not going to immediately operate for a profit.

Make sure you research before you enter this business. Find out:

• Who is your competition 
• How much is your competition charging
• Which products are best sellers
• Which products are seasonal

Once you conduct your research, you’ll know which products to start with and how to price your service. Keep in mind the shipping costs and marketing. 

Shipping shouldn’t be too expensive either for you or your customers. Make sure to reach out to different shipping companies and find the best offer. 

When it comes to marketing, you can easily reach your target audience on social media without breaking the bank. 

Of course, over time you’ll need to adjust your strategy and approach, based on market changes and more. 

Know how to market your business

Once you’ve invested in a beautiful and functional webshop, you need to bring people to it. A good way to start is with social media. 

Promote yourself on Instagram, Pinterest, Facebook, YouTube and any other social media that’s a good fit for your brand. Make sure to go where your audience is, don’t expect them to come to you. 

Start by taking high-quality pictures and videos of your products. Don’t just take a photo with a white background, create photos that show your product in action. 

If you’re selling kitchenware, photograph it being used to create a delicious feast. People want to see a practical use of the products they are looking to buy. Once the photographs are done, focus on your copywriting. The captions should be engaging and descriptive. 

Make sure you’re answering customers’ questions without making the capture too long. Think of a way to bring value with every word. 

Social media is also an amazing place for cross-selling. It’s because you can showcase how well your products work together. Bring up the value of your conversions by packaging up your products and selling them together. 

Make sure that the whole customer experience is enjoyable so that your customers come back to you. Having recurring customers will help you predict your monthly revenue, which is an important metric for keeping your business afloat. 

Once you get a loyal group of customers, you can collect their email addresses and start sending newsletters. Since emails get sent to a private inbox, making them an individualized experience, as opposed to social media content, you can truly customize them to the individual reader. 

Personalized content makes a greater impact and can help you increase your conversions. Utilize the data you’ve collected on them (like name, gender and previous purchases) to create personalized emails. 

You can tell them about your new products and recommend complimentary products that would go nicely with the ones they already purchased. The more you customize your content, the better. 

If you see that a competitor is lowering their prices, sent out a newsletter that offers a discount code. Make sure you’re being proactive and know exactly what’s happening in the reseller market. 

How can you start a reselling business?

Now that you know exactly what to expect from your drop shipping business and how to set yourself apart from the competition, all you need to do is pick the type of reseller you want to be. 

Dropshipping 

The most popular reseller business type is the dropshipping model. It refers to a model in which you sell products without carrying inventory. Your drop-ship vendor ships the products directly to the customer, even though they bought them from you. 

Once you receive payment, you split it with the manufacturer. Basically, you act as a middleman between the supplier and the end customer. 

This is a tried and tested method that relies on creating loyal relationships with the suppliers. 

You can either choose suppliers like eBay and AliExpress, or you can connect with the factories and manufacturers directly. While it might be a bit more complicated to strike up a partnership with manufacturers, that direction will lead you to less competition. 

Dropshipping is a very safe option since you don’t need to ship your products until you receive payment. You also don’t have to buy products without knowing whether you’ll be able to sell them or not. 

The drawback of dropshipping is inventory issues which can lead to a drop in sales. Since you’re not in a situation where you can stock your own products, you’ll need to constantly communicate with the warehouse to check their inventory, which will change on a daily basis. 

You can use different tools and apps to help you keep track of the inventory, but you’ll need to keep in mind how quickly it changes. 

Clothing reselling

Clothing is a type of product that people buy impulsively. It’s not a product that has a long sales cycle. That’s why it’s a great product for resellers. 

You don’t have to decide between children’s, women’s and men’s clothing, you can do it all. The thing you have to focus on is trends and the seasonality of your product. When it comes to marketing your clothing reselling business, Instagram is king. 

Make sure you’re posting fit pics on Instagram and tagging all the products for an easier purchase experience. 

Source: BestSecret

Over time, you’ll see which clothing products are the most popular and you can go into a specific niche. A popular example is recreating dresses celebrities wore to a red carpet or other events. 

Jewellery reselling

Jewellery is a popular product for resellers. This is because the profit margin can be higher than for other products, like clothes. 

Jewellery can not be as easily made as other products, which is why it’s often being sold at a higher price. There are different niches for jewellery - gold, vintage, costume and more. 

In order to resell it successfully, you need to convince your customers of the quality of the pieces you’re selling. 

Try doing it with influencer marketing and social proof. Social proof refers to utilizing customer reviews and quotes in your marketing efforts in order to convert more leads. 

If someone who isn’t associated with your business says that your products are great, it carries more weight than if it comes straight from you. 

That’s why this is a great marketing strategy for products like jewellery. 

Subscription boxes reselling

If you work with a number of different suppliers, you can curate subscription boxes and sell them to customers. 

The content of the boxes is up to you. Will you go the snack food route, beauty products, books or something else, is up to your inventory. 

The trick with those boxes is curating them in partnership with an expert. If you want to sell a beauty box, you need to allow your customers to pick the type of skin they have before they receive their box. 

That way you can curate a box for people with dry skin, oily skin, ageing skin and more. 

The rule of thumb is - the more specialized your box is, the better. Think about creating a subscription box for knitting, book lovers, camping, hiking, fishing and more. 

Subscription boxes are a great way to have recurring monthly revenue, which is essential for any business. They also offer you an opportunity to sell your products at a higher price than you would if you were selling them individually. 

Key takeaways

Reselling is a fun and easy way to make money, all while not succumbing to a lot of risks. You can quickly turn your business profitable, which isn’t the case with a lot of other types of businesses. 

The advantages are multiple. You can have flexible hours, work from wherever you want, have higher profit margins, work without having any inventory and so much more. 

Although there are a lot of advantages, we also must mention that this isn’t the type of business for everyone. You need to be proactive, have some type of starting investment (for a webshop and marketing) and you need to be a people person. 

If fostering relationships with your customers and suppliers isn’t for you, we recommend a different type of business for you. 

However, if you’re a great communicator, this might be a great fit for you. Make sure you’re learning about marketing and investing in ads that are bringing you more than just brand awareness. 

It’s also essential to choose the right niche. Research your target audience and find out which products can you sell easily and which will bring you more revenue. Don’t go into it naively, thinking that you can sell anything. 

Being a reseller means that you’re conducting research, investing your time and effort wisely and constantly looking for new ways to market your business.