What is Reselling?
Reselling is the act of buying something with the intention of selling it on for profit. It's what retail is based around; finding suppliers that will sell things at a lower value than you're able to then sell them on for. The reason you're able to get these things for a sub-RRP rate may be because you're getting them in bulk, or you're able to access a market that the original supplier hasn't got the resources to get to.
Reselling can be done on all kinds of levels, making it an attractive way for amateurs to learn how to make money by flipping whatever they can get their hands on. It’s an age-old practice that can be used to supplement an income, or can be run as a multi-layered business. In the past, resellers may have bought from markets to sell for a premium in stores. Now people are buying from one end of the internet and selling at the other.
This could have exclusively been a reselling blog because there's just so much to talk about within it. Let’s break down the most popular forms, and figure out where you can fit into it.
What are the Different Reselling Methods?
The most fundamental. The one with the highest margins. The one that everyone can do. Thrifting is where you search for (mostly) second hand products that are in good enough condition to be sold at profit. There is nowhere in the UK mainline where this isn't possible.
You see charity shops, yeah? Gold mines. Go into one of those as early as you can on a Saturday morning, and report back on what you find. People really don't know what they're giving away. In the clothing racks, there will be men's suits available for £4 that can fetch £40 on eBay. There will be rare PlayStation games for a pound that you can sell on for £50 on the world's favourite auction site. The opportunities are always out there.
The same goes for boot sales. All boot sale sellers have experienced the annoyance of going home with something they really didn't want back in their house. People want to get rid, so they'll lower the price until someone just HAS to take it.
Thrifting is the best way to find the cheap stuff. It may demand that you get up early or physically dig to find the profitable items, but it's a very rewarding source for reselling stock on eBay, Amazon, Gumtree or even with a boot sale.
Shops run promotions frequently. Some – like supermarkets – never have a day where there isn't one. As a result there can be a price mismatch between the cost of an item and it's value in another marketplace. When items have percentage off discounts, there may be an opportunity flip them for profit.
Compared to thrifting, you have the advantage that all of your retail arbitrage finds will be brand new, quality checked and you have the ability to return anything that you don't think will sell well. That combination makes it a very attractive prospect.
A retail arbitrager may spend a day comparing prices on MySupermarket and then the following day going to every Asda in a 10-mile radius to buy every unit of a handful of profitable products. Once they have an idea of what sells, what bundles work well and where there's low competition, they will have themselves a very profitable operation.
There are various apps that allow you to check the prices of products on other marketplaces quickly. This speeds up the process and means you can source on the fly, as well as for the ones you purposefully go to collect.
Timing is a very important aspect of reselling. For example, summer clothing needs to be sold while the sun's still around. After then, there's less demand, so people aren't as willing to pay as much for those products. Just because the in-store price has dropped doesn't necessarily mean the same has happened online on other marketplaces.
Online arbitrage is exactly the same as the above, except you're buying from online stores instead of brick-and-mortar ones. The game is to search for products that a ecommerce store sells but is priced low enough that you can profit by selling on Amazon or eBay.
You would have thought that shoppers are more savvy about price comparisons these days, but apparently not. There are so many instances where people like to stick to their favourite retailer, so don't even look to see if they can save themselves money elsewhere. For example, those with an Amazon Prime account may feel compelled to almost always shop there. eBay buyers may be convinced that it's always going to have the most competitively price products and stay there.
What's best about online arbitrage is that you don't have to leave your home to do it. Assuming you sell thorough Amazon, you can buy items from the comfort of your home, have them shipped directly to you and then have UPS come collect them items to go to an Amazon fulfilment centre. If you use the right software, even sourcing is a lot simpler than the methods mentioned earlier.
Dropshippers must think everyone else is crazy for actually buying inventory. Not everything that you list for sale will actually sell online, so dropshippers take no risks with bad buys. All of the things they sell are items that they don't own; they're things they buy online once their listing (on a marketplace or their own website) sells.
The practice is widespread on eBay and Amazon. People will list things at a markup that covers their fees and squeezes out a little profit. They're able to make sales through subtle marketing and pricing techniques. Once the item sells, they simply ship the product directly to the customer.
Whether you're buying products from Argos or Ali Express, the process is exactly the same. You have to find gaps where things are underpriced, and you have the know how to get people to buy without doing a price comparison elsewhere.
To make money dropshipping, you have to do it in volume. A little bit isn't enough. Coupled with that large quantity of listings and sales, you also need to be prepared to deal with a lot of customer service. It comes with the territory.
Wholesale is how consumer goods retail is meant to work. It's supposed to be the case that you contact a distributor or manufacturer, negotiate a deal on the number of units and price per unit, buy a bulk order and start selling. So why doesn't it sound as exciting as the rest?
Wholesale isn't as attractive as the aforementioned alternative because the rest are more game-like than business-like. People are exploiting gaps to make money through methods that shouldn't work. Unlike the others, wholesale tends to require a lot more start up capital too. Put those together and most are more likely to try other methods to earn extra money.
Wholesale not only requires start-up capital but also strong communication to negotiate deals with suppliers. Quite frankly, you will get bumped if your skills aren't up to scratch, and it makes it difficult to run a profitable business.
What wholesale offers that the others don't is security. Sourcing is more efficient, it's easier to delegate tasks to others and there's a lot less hassle when you try to sell others brands' products on different marketplaces. Like the others, it's very possible to run as a one-person operation and make impressive sums of cash.
What's My Experience with Reselling?
Reselling is very easy to stumble into. You may have gone to a boot sale to sell your old things before or done the same on eBay, Depop or Gumtree. Flogging unwanted things gives you a feel for what it's like to run your own little retail operation. It the same with me. Once I ran out of things to sell myself, I asked relatives for things they didn't want. Once they'd run out, the only way to get more inventory was to buy it.
Once you dip into it, it's difficult to get back out again. Opportunities are everywhere and even a little stint teaches you so much about how people shop online. I have done all of the above. I went through each to get a feel for the workload, see if I could do it efficiently and see how easy it was to make money from them. They all have their benefits and drawbacks, so I would encourage others to give them all a go before they settle down in any particular practice.
I still do bits of all of them because once you’ve started, you will start to find opportunities everywhere. It’s hard to get your brain to stop looking for flips. In some cases (like dropshipping) you can let them tick on after you have got your listings up. Others (like thrifting) are too tempting to avoid when you’re on the high street.
For me, online arbitrage with Amazon FBA is the perfect model. I like that the product comes to me and I don't have to keep it about the house. The profit is better with thrifting but the convenience outweighs it. It's more expensive to start than dropshipping, but it's less risky. It's just generally more rounded and fit for most people.
How Do You Start Reselling?
I think the most important thing for new sellers is the amount of money they have to start. Those with money to spend are most likely going to want the most time-efficient forms, in which case online arbitrage and wholesale are definitely the most suitable ones. If you’re trying to turn £100 into several hundred, it’s advised you go for thrifting or dropshipping.
The best things to try to resell are products within a niche that you have an understanding of. I began with music, wrestling-related items and branched out from there. If you have kids, you may know certain collectable toys that can be found quite easily at a boot sale, but are likely to fetch profitable sums if they were placed on eBay.
I have to warn people to saty within their means at the beginning. By all means, get stuck in and start as soon as possible, but don’t go spending all of your sourcing cash on things that you haven’t researched first. Even as a seasoned eBayer, I made this mistake with Amazon, before I figured things out.
If you ever have any questions about the early stages of your reseller life, get in touch and I can help out.::::::::::::: - Chiino I don't do comments around here, so let's keep the conversation going on Twitter. If Twitter's not your thing, give us an email.