A reseller business.
Starting a reseller business could be a lot easier and cheaper than you think! Traditional resellers or retail businesses require stock and premises to store and perhaps sell the stock.
These days with the evolution of the internet it’s possible to run a reseller or marketer business entirely online and without having to purchase any stock. Hence, it is possible to start a business as a marketer quickly and with very little or no investment.
The basic idea is to buy a product at a certain price and resell it at a higher price. Obviously, the profit you make depends on the price you pay, how popular the product is, the competition, and the demand for the product.
Before starting you should plan your business, do you want to start a reseller business to work full-time or part-time as a secondary source of income. This article will give you an idea of some of the things you should think about before starting.
Let’s start with a few definitions.
Reseller is actually a very broad term and covers many different methods of earning revenue from a product or service that is not owned or made by you. Here are a few examples of the most common.
Value Added Reseller
An individual or company actively selling a product or service owned or provided by another company for a profit or commission. Resellers may buy stock from the supplier and ship the products themselves or they may simply process orders through a website or by phone.
Affiliate
An affiliate drives web traffic from his own website to another by links and is remunerated on any sales made via those links.
Retailer
A retailer may be online or offline (shop). The retailer purchases a number of products and resells them through a shop or website for a profit.
Dropshipping
A drop shipper is a retailer who sells products without physically handling the stock. For example, an online store can easily take an order through their website and then forward the details to the manufacturer or vendor to ship the product directly to the customer.
Different people use different methods to buy and resell online.
There are a number of different ways to buy and resell stuff online. Some people may start offline buying products at garage sales, car boot sales, jumble sales, or flea markets. These products are then sold online for a profit.
Other people may start online, buying products directly from a wholesaler or manufacturer and they then resell those very products via their own website.
Resellers can generate sales with their website and refer the clients to the suppliers who in return pay a commission. You can choose any way you like, your decision will depend on the capital you have, what you are selling, and also the amount of work you wish to do – packaging and posting, etc.
Make a plan
There are several things you should consider when planning to buy and resell online.
- Decide if you want just a little additional income or if you are looking at buying and reselling online to become your main source of income.
- How much time do you have to commit to this project?
- Do you intend to do this for a long time?
- How much can you invest?
- Be realistic, remember this is a business, and if it was that simple to earn good money everyone would be doing it.
What do you intend to sell?
It’s an advantage to have some knowledge of the products and industry before starting as a reseller. This is particularly true if you are counting on referring the sales to the supplier. You should also try to sell products that interest you and that you are sure of. This should be within a market that is not oversaturated and not too competitive.
Before starting, you must research the products you intend to sell – you must know if there is a demand, the profit margin, can the supplier match the demand?
After you have investigated the market a little, it will be easier to decide which products you should sell online.
What will you need to run your business?
When running a business from your own home the list of things you will need is much reduced. The basic things you will need are a computer, a printer, internet access, an email address, and a few bits of stationery.
A digital camera might be useful for taking photos of products. If you intend shipping yourself you will need boxes, tape, etc. Probably you already have the majority of these items!
Who are your customers going to be?
After you have done your research and you know what you are going to sell, you need to consider who will be your customers and their location. Are you going to need to ship the goods to them? How will you promote your products?
How much competition will you have?
The less competition you have to sell your product the easier it will be to sell and you will be able to make more profit. You 
should consider the price your competitors charge and the price you can charge to make a profit and stay competitive.
The price is one criteria perhaps the most important, but not the only criteria. For instance, you may have better marketing – photos and a full description, you could give away extra products, your service may be better.
Verify that your reseller business is feasible
Once you have researched your product and found a supplier, you will know how much it will cost to purchase your product, the cost of shipping (if you go down that road), and how much you will sell it for.
You will need to do some simple calculations to see if your business is viable. Sure you can consider the best-case scenario, but always also consider also the worst scenario. It’s always better to start small and expand when you have some experience and you know what you’re doing.
Test on a small-scale
One good thing about reselling online is that you can test the business on a small-scale. Buy one or two products and try to sell them online via auction sites or on your own website, however, you like. You can see how you like it and also learn about reselling by the methods you have chosen. Like this, you will have a better idea of how you want to proceed without having to spend much money.
You are ready to start!
When everything is checked you are ready to start your reseller business. As an online reseller, you will need a domain and a website. You can choose and register a domain name online easily and cheaply. It is even possible to create a website for free, if necessary you can build your site so that it is possible to accept payments online and process orders online.
All you need to do now is order your products, put them on your website, and hopefully start selling!!
If you don’t want a website you can always sell on an auction site.
To learn about starting an online reseller business you could go to Wealthy Affiliate, my number one choice, for more information, see my review.
I am Ernest from Ghana there are a lot of things here that can be sold to people outside for example gold, drinks, shoes etc but the problem is how to start them and make money. I did start a site to promote made in Ghana goods like alibaba but unfortunately it didn’t get the needed attention.
Please any help?
Waiting
Hi Ernest,
Yes, there are many things that can be sold online both physical goods and digital products. The easy part is setting up a website, then it’s harder to get traffic. I would suggest you write articles or reviews about the products you promote, to try and get a good ranking in Google. Prior to writing your article, you need to carry out keyword research to see what sort of competition you are facing and the number of searches every month.
This is a lot of hard work but if you have the determination and patience you can be successful.
Best of luck,
Peter
Hi i just started with reselling of cloths it was good for extra income and also I faced some issue of the product with one or two customers I’m thinking to improve this business with part time if it helps me an lot to do on full time job also but I dont have investment to do and also Everytime searching customer is also difficult can u suggest me how to do my business with online and also I’m not getting proper manufacturers details only I’m getting wholesalers please suggest me
Hi Kavya,
If you haven’t much money to invest in merchandise you could either try affiliate marketing or drop shipping. For more info on dropshipping, you could check out this article from Shopify
For affiliate marketing, you could read this post. You would have to spend time writing content to get ranked in the search engines to drive traffic to your website. This is a lot of work to start with but can be worth it in the long run.
Best of luck,
Peter
I like that you point out that it is important to decide if you want the money earned to be your main source of income or just a side income. I can see why this would help you know how much time you need to put into it. For example, my cousin is looking for a way to make a little extra money while he goes to college. I’ll have to talk to him about looking into reselling things.
Hi Scott,
I think the secret is to find something you enjoy doing. Then you can put all your spare time into it and it won’t seem like work. Personally, I like the affiliate marketing model – cheap to get started, no stock to buy or store, you don’t have to ship the goods and no after sales service. It does take time and effort to get started and you can build a business around one of your hobbies.
Cheers,
Peter
Hi,
I’m interested in running an online business here in South Africa…please advise and recommend products I can try.
Hi Nicedo,
If you are unsure of what products you can market, I would recommend starting withaffiliate marketing. You promote other people’s products so you don’t need to find your own products or deal with stock and deliveries. As to products you can promote, I would start with something you are interested in, passionate about or a hobby.
Another alternative would be drop shipping, if you’re not familiar with this business model read this article
With both these alternatives, you will need a website and have to put in some work to get traffic. You won’t make money overnight!
Best of luck,
Peter