Diving into the world of reselling can feel like uncharted waters. The idea of capitalizing on customer returns and excess inventory, with minimum upfront investment, can be both exciting and unnerving. With the right approach, however, this venture can be a lucrative and fulfilling way to either supplement your current income or, if you dare, forge your path to self-employment.
When you return a purchase to the store, you might picture it restocking a shelf, waiting for a new customer. However, the reality is that many returned items, once opened or used, cannot be sold as new. This conundrum presents a unique opportunity for you.
The Nitty-Gritty of Retail Balancing Acts
Retailers strive to strike a delicate balance between maintaining a fresh product line-up and ensuring their returns don't clog their inventory. Every returned product that stays on their books is capital that could have been directed towards new inventory. Here's where you can step in to solve their problem and make a profit.
There are several ways you can acquire inventory as a reseller. One option is to buy directly from retailers, but this requires the commitment of purchasing multiple truckloads per week. If you're starting smaller, you might find a marketplace like BlueLots to be more accommodating, offering more manageable quantities, like cases or pallets.
One often-overlooked advantage of reselling is the complete waiving of sales tax on inventory purchased for resale. This is achievable with a valid resale certificate. If you're wondering how to get one, check out our comprehensive guide on resale certificates, which covers the free registration process for your state.
Navigating Product Categories: An Inside Track to Profits
Picking the right category of goods to resell can be critical to your success. A good rule of thumb is to stick with categories you're familiar with. For instance, if you spend your weekends camping or hiking, sporting goods and outdoor gear might be your goldmine. Your personal experience gives you an 'unfair advantage,' enabling you to spot deals instinctively, without time-consuming research.
However, if you're undecided about your niche, electronics and new shoes are often safe bets. These categories typically boast higher sell-through rates, translating to faster sales and more reliable profits.
Evaluating Profit Margins: The Art of Smart Buying
Profit in reselling hinges on finding inventory you can sell for 50%-300% above your purchase price. Sounds straightforward? Yes, but you'll need to know how to evaluate your prospective purchases carefully.
To start, always download the inventory manifest before you make a purchase. This document will list each product in the lot. Now comes the detective work.
Cross-reference this manifest with Amazon and eBay to gauge the current market price of each product. Dig deeper into the Amazon sales rank and eBay's recently sold listings to understand both the sell-through rate and average sale price of the products you're eyeing.
Remember, on eBay, focus on 'sold listings' only. Also, make sure the condition of the sold items matches that of the inventory you're planning to purchase. For instance, if you're looking at 'used' goods on your manifest, ensure you're comparing them to similarly 'used' goods sold on eBay.
This detective work will allow you to estimate the potential profitability of a lot and make a more informed purchasing decision.
Reselling liquidation goods from home may be an unexplored territory, but it's a promising one. With these actionable tips and insights, you are well on your way to transforming your home-based venture into a thriving, profitable business.