How To Start A Reselling Business (Free Guide For 2022)

Reselling Business

So you want a practical guide on how to start a reselling business? If you’re looking to make money on the side but don’t know how to create a product to sell online, the reseller business model is the perfect opportunity for you.

In this article, I’ll walk you through the simple process of starting your own reseller business from home — working part-time or full-time. 

You’ll learn everything from what a reselling business is, some examples of profitable reseller businesses, how a reseller is different from a distributor, how to make more money from reselling other people’s products, and more.

Let’s get started.

What Is A Reseller? 

Best Selling Sneaker Brands

A reseller is a person who sources products from retailers, liquidators, and even manufacturers — and then resells those products to the right customers for profits. 

To give you an idea of the potential of this business model, take a look at the bestselling sneaker brands on the resale site StockX above.

A resale license, resale certificate, and tax exemption — which are all important aspects of the Permit enable resellers to engage in this business model and purchase a variety of products free of sales tax. 

What Is a Reselling Business Model?

Reselling Business Model

A reseller engages in a reselling business. They buy and resell products with permission from the retailer, manufacturer, or wholesaler. As a form of dropshipping business, reselling business is easy to start and run, and it’s perfect for new entrepreneurs who want to sell online. 

A reseller acts as a middleman between the manufacturers or product creators and the customers. The upside is that instead of creating your own products, you’re exposed to an extensive collection of products to buy and resell. 

Starting a Reseller Online Store (Which Hosting Plan Is Better)?

Shopify Theme - Reseller Online Store

The best place to reach hundreds of thousands of customers to resell products is online. And to begin, you need to build an online presence with your reseller store. 

This is where customers will find you, learn more about your products, buy and come back again.

To start your own reseller online store, you need a domain name and a web hosting provider. 

Some beginners opt for WordPress or Squarespace as their preferred choice for building an online store. From my experience, though, it’s best to use Shopify to manage every aspect of your reselling business. 

With Shopify, you’ll get a hosting plan and a storefront for your store. 

If you decide to use WordPress, then you’ll need to install WooCommerce, which requires a third-party hosting provider like Bluehost or Hostgator

Reselling vs. Dropshipping (A Quick Overview)

How is reselling different from dropshipping?

Well, the difference isn’t that much. Basically, reselling is a type of dropshipping where resellers source products from manufacturers and suppliers and resell them to customers in one place (a reseller online store).

Since the products can be bought from one place, it makes it the ideal shopping platform for the average consumer to find the right products they need.

Resellers can also offer a ton of valuable customer service to help improve the customer experience. Some resellers prefer to sell individual units to customers (at a markup) or sell in bulk to consumers.

You can succeed in this business model by offering a ton of value to the customer. 

This can include creating in-depth product descriptions and reviews, listening to customers’ complaints, offering a loyalty program, or even free shipping.

With drop shipping and reselling businesses, you don’t need to go through the hurdles of creating your own products. However, you certainly need to market your online store and build relationships with customers. 

That’s how you can succeed if you want to be a reseller for a long time.

What Is The Difference Between Reseller And Distributor?

Is a reseller a distributor or is there any difference?

Well, the responsibilities of a reseller and a distributor are distinct. While both parties purchase goods from manufacturers, suppliers, and liquidators to sell for profits, here are the two major differences: 

#1). Relationship

A distributor mostly communicates with the manufacturer. While some resellers can buy directly from the manufacturer, they mostly have a relationship with the distributors or retailers. 

Distributors have a stronger relationship with the manufacturer because they offer suggestions on how they can improve their products. In other words, distributors go the extra mile to help the manufacturers dominate their market. 

A reseller is usually concerned with purchasing products from wholesalers or suppliers and reselling them for profit. Since they don’t provide after-sale service or suggestions to the manufacturer, the distributor has more control over the products.

#2). Inventory Management

This is where the major difference lies. Since distributors have established a level of relationship with manufacturers, they have the chance to buy inventory or merchandise in bulk

What Is Inventory Management

They provide warehousing services and ensure the products are stored properly. They own and manage inventory — which helps them feel more confident in the products they’re selling to retailers and resellers.

In general, resellers don’t buy inventory or merchandise of any kind. They operate on a demand-based model. 

Most resellers will procure the essential items for which the consumers have requested and placed orders. They simply function as the middlemen between the manufacturer and the customer.

Benefits of Starting a Reselling Business 

Starting Reselling Businesses

When you become a reseller and build a business around it, you’ll enjoy a lot of benefits. You have the chance to source products from a wide range of retailers at lower business costs.

If you’re passionate about reselling some products or items to consumers, this is the best time to get started. The rewards of starting a reselling business go beyond making money — you’ll also build a profitable business that will stand the test of time.

You can even scale your reselling business to become a manufacturer or producer. 

Here are some of the benefits you’ll derive from starting a reselling business:

#1). Launch Your Own Business Quickly

You can start selling online the same day you start your reseller business. With Shopify, your online store can be up and running in 30 minutes. 

Simply add some reseller products and content, start marketing your products and you might get your first sale in 24 hours.

#2). Hold No Inventory

Dropshipping has become a business of choice because it’s easy to start and you don’t have to carry any inventory. You can easily use a dropshipping marketplace like Oberlo to easily resell goods without having to spend a lot of money to purchase bulk inventory in advance.

When customers order products from your website, you can quickly purchase them from the retailer, resell and keep the profit. 

Regardless of the products (e.g., clothing, bags, jewelry) you intend to resell, you can still make money without holding inventory.

#3). Easily Sell a Variety of Products

When you start a reseller business, you have the opportunity to resell a diverse range of products. 

You might begin with a few boutique clothing, but as time goes by, you can delve into accessories, handbags, lingerie, shoes, or related products. There’s no additional cost when you add new products to your online reseller store. 

#3). Minimal Financial Risk

Minimum Financial Risk

Source

The financial cost of starting a reselling business is low. If you’re on a shoestring budget, or you’re a risk-averse entrepreneur, reselling other companies’ products can help you build confidence before investing a ton of money. 

You’re not required to purchase bulk inventory, and shipping fees are minimal. You’re only required to pay for products as customers order them through your online store.  

#5). Higher Margins

Higher Profit Margins

Source

Most successful eCommerce businesses are the result of having control over the margins. If you purchase items from retailers and you have the permission to set pricing, then you’re sure of making good profits.

Overall, you’ll make more money when you set a higher price. However, make sure you analyze industry standards and put that into consideration when pricing your products.

#6). Enjoy Part-Time Commitment

Part-Time Work Commitments

If you have a day job, it shouldn’t deter you from starting a reseller business. You don’t have to spend hours upon hours every day in this business.  

Resellers can work part-time or full-time. Keep in mind, though, that the time you put into marketing and promoting your online store will largely affect how many sales you generate each week. 

With Shopify, Oberlo, and other reselling apps, 87% of the processes are automated. You can save a lot of time since you’re not required to package and ship the products to your customer.

5 Reseller Business Ideas (Which Products Can You Resell?)

Reseller Business Ideas

The first step to starting a reselling business is to identify the products and items you want to sell. You can sell virtually any item of value online. 

Whether you’re looking to resell tech products, fashionable items, or stick to evergreen products, you’ll find a diverse range of products to resell. 

Here are some reseller business ideas:

#1. Clothing

Apparel Resale Market Share

In 2018, the resale apparel market was worth $20 billion, and it’s ever-growing and projected to reach $34 billion by 2023.

Clothing is an evergreen niche that includes men, women, and children. You can delve into different clothing trends, test a few different clothing niches, get feedback from customers, and then decide which type of clothing (e.g., T-shirts, Gym outfits) work the best for you.

Clothing Online Store

If a particular type of clothing isn’t selling as you expected, you can easily switch it from within your Shopify or WooCommerce reseller online store.

When new items come into fashion, you can capitalize on these trends and add them to your online store. Plan your reseller business and make sure you choose a broad clothing name that wouldn’t restrict your choices in the future.

#2. Dropshipping Business

Dropshipping Business Model

Although the reseller business model is a type of dropshipping business. With a dropshipping business, you can sell a wide range of products without the need to buy bulk inventory or rent a warehouse. 

Your responsibility is to market the products, and when an order is placed, the manufacturer or vendor ships them to the customer. See how the dropshipping model works above.

A dropshipping supplier will take care of product development, warehousing, and tracking, as well as order fulfillment.  

If you’re searching for a reseller business idea without the cost of holding stock and managing customer service and fulfillment, then you should consider dropshipping business.

#3. Pet Supplies

Pet Product Sales Growth

Most people in the U.S. and other parts of the world love pets, especially dogs and cats. That means you have a huge market of customers to resell pet food, pet clothing, leashes, bowls, pet cameras, and pet toys.

You may start with reselling dog and cat toys and accessories. They’re the most popular pet supplies that owners spend money on. Since the COVID-19 pandemic, pet product growth has reached 63%.

However, there are tons of products you can sell, more so, when you expand into other smaller pets like rabbits, fishes, birds, etc.

The pet industry is growing exponentially. As a result, manufacturers and suppliers are at the forefront of providing products to meet every need of pets. 

You can leverage social media platforms, including Instagram and YouTube to reach your target customers. Also, you can start a blog or incorporate a blog into your reseller store so that you can create helpful blog posts that are answering pet owners’ questions.

#4. Vintage Boutique

Vintage Boutique Store

One of the best reseller business ideas to start is a vintage boutique. This boils down to reselling used goods to selected customers who value them. In the U.S. alone, more than 20,000 stores sell used goods, which produces about $17.6 billion in annual revenue.

There are so many opportunities to make money reselling used items.

You can decide to resell goods that are older than 50 years. You can also get some inspiration from vintage trends. 

A great example is COAL N TERRY, a reseller shop that deals in vintage clothing collections.

Other vintage items you can resell include handbags, shoes, antique furniture, and other knick-knacks you lay your hands on. As long as they’re valued by consumers, you should consider reselling them at your online store. 

You also need to understand your target audience and what items people are looking for. A good example is Corningware, which is in high demand right now in the U.S.

#5. Consignment

Consignment Shop

In this reseller business idea, you can open a consignment shop to resell luxury used goods. Although you don’t have to only resell antique items, new on-demand or products with a limited edition label can be resold as well.

Love That Bag etc, is a great example of a reseller business that operates an online consignment shop. They usually resell designer bags that are cheaper than brand new, but you’ll often find more expensive ones there if you look around. 

Best Places to Find Suppliers for Your Resale Business 

Suppliers For Resale Businesses

First, you need to identify the types of products you want to resell online. Also, what type of customers are you aiming at. 

Do you prefer high-income earners or average-income earners to visit your online reseller store?

Next, do you want to connect with a supplier that operates as a distributor, who can provide wholesale products to you at a reduced cost? 

Or would you prefer a drop shipper, who should be responsible for supplying the needed products and handling all of the logistics including customer service, order fulfillment, refunds, etc.?

Online directories are great platforms to find suppliers. If you belong to a Facebook group where drop shippers and eCommerce entrepreneurs hang out, ask them for referrals. 

You can also find verified drop shipping suppliers at Worldwide Brands, Doba, SaleHoo, and AliExpress. While browsing these websites, you can easily spot products that are available for resale.

Better yet, you can use a product sourcing app like Oberlo. This is ideal if you’re a Shopify merchant. Oberlo is also a directory that helps you find on-demand products (across different categories) to resell online.

How To Make Money With a Reseller Online Store

Making Money Through Resale Business

The ultimate goal of starting any business is to make a profit. You want to make money in your reselling business to stay afloat and scale. 

To increase your chances of making more money from your reseller business, you should take proactive measures towards marketing your reseller online store. You should also consider creating a sales funnel using Clickfunnels or Builderall if you want to engage, nurture, and turn leads into customers.

Essentially, you need to implement proven marketing strategies such as content marketing and paid advertising if you want to generate consistent sales. 

Here are some of the steps you can take to make more money with your own reseller online store:

#1. Use Value-based Pricing

Value-based Pricing

There are several ways to price your products online. While some resellers may price their products based on industry standards, it’s important to identify and understand the value of your product and price accordingly.

Once you do that, don’t be afraid to price your products a little higher than what the competition is doing. How do you scale and build a profitable reseller business if you have a $3 profit per sale?

The price of your product should cover the cost of procurement, marketing, overhead (when you start hiring employees), and also Shopify fees (if this is your hosting choice).

As long as your product price is reasonable and you’re confident in the value of your product, there’s no need to underprice yourself. Most reselling businesses are on the verge of failure because they’re lowering prices to stay competitive. That’s the wrong approach!

#2. Content Marketing

B2C Content Marketing

Content marketing is the process of creating helpful content that attracts that ideal customer. From blog posts to videos to infographics to podcasts, you can build authority with your online reseller store and make more money.

With the right content, customers who need the products at your online store will find you easily. About 90% of businesses (including resellers) that sell directly to customers employ content marketing.

By creating useful and interesting content consistently, you’ll find that over time your sales will increase. You can also make additional money from your videos by monetizing with YouTube ads.

For your blog posts, you can retarget your traffic and make more money from customers who didn’t purchase products from your store after reading your product reviews, for example. 

#3. Run Online Ads

Running Online Advertisments

Online ads can generate a high ROI if you do it right. According to research by Nielsen Analytics Consulting, for every $100 invested in online ads, the ROI is $218. That’s a 118% return.

With online ads, you’re sure to get consistent traffic and customers to your online reseller store.

When you first start your reselling business, creating ‘helpful’ content may not be the right approach because you’re still new to the market. Besides, no customer knows your online reseller store.

However, you can run Facebook and Instagram ads to reach potential customers in your niche. Facebook ads, in particular, work very well for drop shippers. 

Because impulse buyers are always looking for new products to buy on this platform. Here’s an example of a Facebook ad:

Facebook Advertisments

With Google ads, for instance, customers may not know which products to buy — since your competitors’ ads are also showing up. But this is different when you run Facebook or Instagram ads. 

Only your ads will be seen at a particular time as the customers scroll through their feeds. Thus, this monopoly increases its likelihood to be clicked. And with the right clicks comes sales.

Conclusion 

There you have it, the practical guide on how to start a reselling business. If you’re looking for a business that lets you control your branding, the reseller business model is the one.

You can grow your own customer base on social media and build a loyal email list. These people will keep buying from you as long as they’re satisfied with your product. 

You can also use a professional theme to bring life to your website. You’re in control! 

To thrive in your own reseller business and make a boatload of money, it makes sense to build strong relationships with your customers.

In This Article

Burkhard Berger

Burkhard Berger

Follow me on my journey from $0 to $100,000 per month. I'm sharing everything I've learned in my income reports here on Novum™ so you can pick up on my mistakes and wins.

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