Are you tired of a full-time job and wish to start your shop?
If you’re bubbling to turn a hobby into paid employment or do a high-ticket side gig to make money, start a reselling business to earn money online consistently.
You can initiate it as a side hustle to earn a passive income, and if you love the reselling business model, it can be your primary source of earning a monthly side income.
An online resale business is a feasible side income opportunity for green and experienced entrepreneurs, especially those lacking initial capital or interest in manufacturing their products.
Such reselling online businesses often start as a small side hustle. However, combining a viable product and marketing that resonates with your target audience makes it a profitable business.
This article highlights a step-by-step guide on how to start a resell business as a side hustle idea.
- What Is a Reselling Business?
- How Much Does It Cost to Start a Reselling Business?
- Six Profitable Reseller Business Ideas
- 9-Step Guide to Starting a Reselling Business Online
- Step 1: Outline a Business Plan & Identify a Business Name
- Step 2: Sourcing Products
- Step 3: Register Your Business & Open a Business Bank Account
- Step 4: Acquire a Resell Business Permit & Business Insurance
- Step 5: Purchase and Set-Up Necessary Software for Your Reselling Business
- Step 6: Build a Website
- Step 7: Set Up Your Business’s Communication Channels
- Step 8: Market It Right
- Step 9: Finalize Payment Channels
- Pros & Cons of a Reselling Business
What Is a Reselling Business?
Reselling businesses are another form of dropshipping where entrepreneurs curate finished products from various suppliers and sell products via an online store.
This business model has a low barrier of entry for an average person and can be started from the comfort of home.
A key aspect that makes a successful reselling business profitable is its zero inventory cost. Thus, making it a business model that enables flexible profit margins.
In some state jurisdictions, the reseller doesn’t have to pay sales tax, making reseller businesses even more lucrative.
Yet, expect ongoing expenses for deliveries, marketing, or if you hire employees when scaling.
How Much Does It Cost to Start a Reselling Business?
While inventory costs are absent, registering the business, shipping costs, acquiring resell permits, and setting up CRM software to manage orders can require one-time investments.
Depending on the chosen product niche and target market, setting up a reselling business can cost between $1,000 to $10,000, depending on your products on sale.
If you sell high-ticket products like costly gadgets, expect a higher investment than low-ticket items like clothes or everyday accessories.
Six Profitable Reseller Business Ideas
Here are some of the better-known examples of bankable resale businesses:
1. Dropshipping Business
A dropshipping business is about offering a wide range of products without having to manage inventory.
In this business model, all you’ve to do is sell the products to the target market.
If you’re good at search engine optimization, drive traffic to your website or optimize product listings on third-party platforms.
Work with suppliers who support various value chain functions like product development, warehousing, tracking, and even order fulfillment.
This helps cut excess business expenses like hiring employees, salaries, etc.
2. Sneaker Business
The sneaker reselling business is based on one concept: buy low, sell high.
It’s a proven profitable business for someone with niche expertise looking to connect with consumers interested in fashion and streetwear.
Popularizing streetwear on social media accounts, following current trends, and understanding customer personas are game-changing to build a successful resale business in the sneaker industry.
3. Vintage Boutique
A vintage boutique is a proven business model that sells never-seen-before or unique product items.
Identifying suppliers for a vintage boutique may require venturing into a flea market, yard sales, or garage sales.
The timelessness of your products can be the secret weapon to building a successful ecommerce business.
4. Consignment Store
In this business model, a reseller acquires products from individuals who get paid a certain amount after the merchandise sells.
Thus, a consignment store is a resale shop selling goods for a percentage of the sale price.
Remember, a consignment shop can turn a reseller profitable by reselling upscaled luxury goods, home goods, art, and even selling books.
5. Subscription Box
A subscription box is an exciting reseller business idea where multiple products are shipped to customers in subsequent intervals.
You can curate an assortment of goods and package them into a single box. For example, curating a box with monthly skin-care essentials allow you to customize the product offerings.
Launch themed boxes to attract new customer subscriptions by leveraging packaging market trends in your niche.
6. Jewelry Reseller
Opening a resale business in jewelry can be another profitable ecommerce business. You can collect old antique jewelry, rare crystals, and high-priced diamonds and sell them online.
To build a profitable jewelry reselling business, consumers should relate the brand with authenticity and trust when buying precious stones and metals.
You can get the jewelry certified by local experts and share testimonials or certificates with customers via social media channels.
Sharing customer reviews online can further impact this exercise.
9-Step Guide to Starting a Reselling Business Online
Here are nine steps you can follow to build reselling business ideas from scratch:
Step 1: Outline a Business Plan & Identify a Business Name
The key to starting an ecommerce business and establishing an online store is identifying a product category and researching the online marketplace to analyze the competition.
Choosing a niche market can help resellers rake in a higher profit margin, making this step crucial to develop an ingenious business plan.
The first step should be to conduct an industry analysis underlining buying trends that affect consumer markets.
This process will help estimate the market size, analyze competitors, and identify how to differentiate one’s reseller business.
Up next, decide target customers and predict profit margins to build a successful business.
Once you’ve validated the reseller business idea with thorough research, the next step is to brainstorm a business name that best suits the product niche.
Ensure the name is available, and keep it simple for a better brand recall rate with potential customers.
Try and choose a reselling business name reflecting the desired qualities of the brand you’re building.
Step 2: Sourcing Products
Some of the best reseller business ideas are built on the support of reliable suppliers. Find suppliers for the resale business who provide items that aren’t obsolete or otherwise inferior.
Most importantly, when things go wrong, you need a supplier you can easily communicate with.
High-demand products have a higher price point, making them profitable resale items.
You can review popular ecommerce websites like Amazon, Alibaba, Costco, and WorldWide Brands to shortlist top-rated products.
Some reseller apps, like Meesho, eBay, and OLX, help resellers share a custom catalog with customers after adding profit margins to the base pricing.
Another way is to tap into local markets and crack deals with small businesses running on wholesale models.
Step 3: Register Your Business & Open a Business Bank Account
Choose a legal structure for the reselling business idea and complete registration in the states where you intend to operate the resale business.
You can form one of the several legal entities, such as a sole proprietorship, partnership, limited liability company, or corporation, and choose a business type saving you cash on income and sales tax.
After locking in the business structure, register the business with the Internal Revenue Service. This results in the IRS issuing an Employer Identification Number.
You’ll need the EIN to open a bank account and track payroll tax payments. Once you’ve received an EIN, the subsequent step is to open a business bank account.
Establish a relationship with added perks, and consider getting a business credit card for the resale business. Use it to build a healthy credit history to help secure future loans and credit lines.
Step 4: Acquire a Resell Business Permit & Business Insurance
Apply for a reseller business license or resale permit where you’ve launched the side hustle. This can exempt you from sales tax.
These could vary depending on the state the business is registered in and the products you’re selling.
Contact a local licensing agency to arrange all legalities to establish a reselling business online; such guidance buttons up all the necessary documentation.
Depending on the side hustle’s scope, insurance policies should be considered to safeguard the online resale business.
Working with an insurance agent can help make informed decisions to choose the right policy that protects products, customers, and office essentials from fire, theft, damage, and more.
Step 5: Purchase and Set-Up Necessary Software for Your Reselling Business
Small online resale businesses stay organized with the support of Customer Relationship Management (CRM) software like Zoho or Odoo.
Such tools allow resellers to create a custom backend store and build efficiency in business processes like managing inventory, products, orders, and customers from one central location.
Step 6: Build a Website
If you’ve decided not to sell via third-party platforms to start a reselling business, a website becomes a vital tool.
Choose a custom domain name and create your ecommerce business website to provide prospective buyers with information about product highlights, the company’s history, contact information, and ongoing offers.
Developing an easy-to-use retail store and user experience for websites is essential as it will affect how customers perceive the brand.
Optimizing the website navigation for an online business, be it thrift stores or flea markets, can boost sales significantly.
Step 7: Set Up Your Business’s Communication Channels
Social media channels like Instagram and Facebook or Facebook marketplace are effective platforms for receiving orders directly.
Commonly used messaging apps like WhatsApp & WeChat can also provide customer support, order updates, and payment details.
A formal email-id where customers can easily reach you is an important communication channel, making the business come across as professional and authentic.
Step 8: Market It Right
Creating a marketing plan is a crucial step before you start selling online.
When you start a reselling business, spread the word about the online store on social media platforms and attract customers by generating organic or paid traffic.
Once you’ve generated prospects, engage with the hot leads, understand their pain points, and educate them about the brand and product USPs.
Redirect the audience to online retail stores using social media accounts. With social media, focusing on organic growth in the initial phases is essential.
Such strategies can save marketing investments while establishing the brand and help define a customer persona.
Remember, a brand representation style, logo, and communication tonality allow reseller businesses to stand out in a crowded online marketplace.
Tools like email marketing can help customers stay updated with developments in your business activities.
Step 9: Finalize Payment Channels
Providing convenient payment gateways is crucial to complete the online reseller business model.
You don’t want the customer bouncing from the website because their preferred payment option is unavailable.
Set up facilities for PayPal, Payoneer, bank transfer, cash on delivery (COD), and promo codes.
Optimize the microscopy on payment pages to ensure a cold lead is fully converted to a paying customer.
Pros & Cons of a Reselling Business
As with everything, there are upsides and challenges to starting a reselling business.
Pros of reselling a business:
- Quicker Launch: A reseller business doesn’t need to wait for inventory research and development. Side income earners can set up and launch the same day as one launches the website with product listings.
- Carry No Inventory: A reseller can source products from drop-shipping suppliers, who allow reselling without having to purchase inventory in advance. You can pay when a customer purchases a product from the online store, making it an economical and convenient business choice for new entrepreneurs.
- Flexibility in Setting Margins: As a reseller, there’s freedom in setting profit margins. If the cost of the goods is low, you can sell in bulk and at higher profit ratios. However, you should study industry standards for product pricing to guarantee the selling price does not discourage customers.
- Easy to Scale: Once the traffic to your website is consistent and you’ve gained recurring buyers, it’s simple to scale the business. Add new product listings and expand on product categories.
Cons of reselling a business:
- Excess Competition: Customers have innumerable online marketplaces to choose from today. Hence, standing out requires innovative pricing strategies, product offerings, and customer services.
- Finding a Reliable Supplier can be Difficult: A reliable supplier is key to this business model, as the partner should be able to fulfill the order at the earliest possible. Lack of product availability and inconsistent quality can hamper the brand in the long run.
- Building Consumer Loyalty Takes Time: Like any business, providing a pleasant customer experience is key to unlocking sustained growth. Develop a customer loyalty program to offer unique product package offerings, discounts, and early access to product launches. Though time-consuming, it can help in repeat purchases.
The Bottom Line: Is Starting a Reselling Business a Feasible?
To summarize, reselling business ideas can come across as complicated at first to achieve success.
But when reseller business ideas are well positioned with concrete research and promoted by leveraging today’s digital marketing tools, there’s tremendous scope to widen your side income.
The horizons of making money through such business models are even brighter with proper customer service facilities.
And with various technological and non-technological products to sell online, there’s no shortage of a niche market that translates to a blossoming side gig for small business owners.