After learning why becoming an online reseller is a great option for increasing your income, you’re probably curious about how to actually make money selling online.
So let’s jump right into it, shall we?
Finding Profitable Inventory
Flipping. Reselling. Online arbitrage. Retail arbitrage. You’ve heard these terms thrown around. The basic principle is the same: buy low, sell high. That’s the key to making money selling products you didn’t produce yourself. But how and where do you find products cheaply that others are willing to pay more for?
Having a good source for high-margin inventory is the first part of the “buy low, sell high” equation. That’s why knowing your sourcing options is key. The good news is that you’re not limited to just one source for products. Successful resellers often source many types of things from many types of places.
Flea markets: For most of the country, flea markets are open during the warmer weather months of Spring and Summer. These markets offer a huge variety of goods for the patient treasure seeker. And every week, new treasures await. For more information on where to find a flea market near you and best practices, check out Flea Market Insiders.
Yard sales: Like flea markets, yard sales are most prominent when the weather is nice. Yard sales usually provide great options for home goods, clothing, and toys for can’t-beat bargain prices from people who are highly motivated to get rid of their stuff. Stay updated on yard sales in happening in your area with Yard Sale Search.
Thrift stores: Thrift stores are a major go-to source for sellers. You can find designer, brand-new, and vintage items in all departments and usually for a fixed price (depending on the store). If you’ve never thrifted before, luckily there are plenty of veteran thrifters willing to share their tips on how to thrift store shop.
Auctions: Physical auction types include (but aren’t limited to) wholesale warehouse auctions, police auctions, and self-storage auctions and can include anything from art to automobiles. But fair warning, auctions are not for the novice sourcer. Often, you only get a quick peek at the top contents of a pallet (if that) or are just told the general category and condition, and bidding happens so fast you might lose track of your ROI if you get swept up in a bidding war.
Facebook: Facebook forums and neighborhood groups aren’t very reliable as a primary source for flipping inventory, but can uncover the occasional gem. (And don’t forget that seller forums on Facebook are an invaluable source for information about selling, as well!). In a nutshell, join community groups and keep an eye out for sales (and tips!) that will benefit your business.
Craigslist: Craigslist is a great place to source inventory to resell, especially because you can seek out free items. From the Craigslist homepage, simply click on the “free” subcategory of “For Sale.” You can browse page after page of free items in your area that you might then be able flip for profit online.
Retail Arbitrage: Arbitrage is the act of exploiting differences in price by buying something for one price and immediately selling it for a higher price. Retail arbitrage (or RA) is when you purchase an item from a store and resell it for a higher price. Big box and department stores often have huge markdowns on clearance items they are willing to sell at discounts in order to clear floor space, creating opportunities for flippers like you.
Online Arbitrage: Like retail arbitrage, online arbitrage is the act of purchasing items for the specific purpose of exploiting a price mismatch, except the buying and selling happens online. Drop shipping is one way an arbitrager can sell items without the cost of processing and overhead.
Liquidation Channels: Online liquidation is a way to access excess and returned goods from major retailers who are motivated to move large quantities of inventory off their shelves and off their books. Unlike a consumer retail experience, many liquidation channels provide inventory with minimal information about what you can expect and little logistical help. BULQ, a leading source of wholesale and liquidation merchandise, offers detailed manifests, flat rate shipping, and buy-it-now prices, while others offer online auctions and arrange-your-own shipping.
These channels are just a few ways you can stock up! Keep your eyes and mind open for new opportunities and don’t limit yourself to just one or two familiar sources.
Tips for Sourcing
- Start with What You Know
If you’re already a savvy shopper, use those skills to seek out products for the sake of reselling. Sell products you know and can evaluate. If you have an idea of what people are willing to pay for vintage bags, video games, or kids toys, that’s the best place to start.
- Know the Competition
As you’re doing your product research, make sure you’re also doing research on who’s selling that item. If the market is already flooded with a particular product, you’re going to have a hard time moving it without getting into a price war.
- Don’t Limit Product Options
Online selling beginners often make one limiting mistake. They’re only considering brand-new, sealed, in-box merchandise. By doing that, they are missing out on opportunities for bigger profits and a bigger sourcing pipeline. Source products of varying condition types and don’t limit your profits by only sourcing brand-new inventory.
- Avoid Impulse Purchases
You may be tempted to go all in on a “great deal” on product you personally love. But before you bet the farm on the next fidget spinner craze, check to see the prevailing demand, prices, and number of competing sellers. Just because it’s cheap, doesn’t mean it’ll sell well..
- Keep Shipping Costs in Mind
Always keep shipping costs in mind, especially when sourcing larger or fragile items. If you find an outdoor patio set for an unbeatable price, make sure you consider how you’re going to ship it and how much that’s going to cost. If a fragile piece of equipment is poorly packaged and arrives damaged, think about how refunds and return shipping will impact your bottom line.
Where and How to Sell
Now that you’re inspired to always be sourcing, let’s not forget Step 2 for making a profit: selling!
You’re probably already thinking, “If I could buy inventory from other individual sellers in dozens of places, can’t I sell there too?” And you’re right! You can definitely find buyers for flipped goods on list-servs, social media, flea markets, and more.
Let’s explore a few more popular, and profitable, places successful resellers sell for profit.
Online Selling Options
eBay: Although eBay is best known as an auction site, it’s now much more than that. Individuals can set up shop next to major retailers and win sales based on attractive listings, price, and selection. eBay is a place to find great deals on everything under the sun and does particularly well for sellers of rare or unique items that appeal to niche purchasers. eBay offers auctions as well as fixed-price listings depending on what suits your strategy.
Amazon: Amazon has quickly become many consumers’ one-stop shop, due to its unparalleled convenience. If you’re not on Amazon’s marketplace, you’re missing out on a huge audience for your products. Amazon even offers fulfillment services to make your life as a seller easier. But be aware, Amazon can restrict new sellers in certain categories (a process known as gating), until you have proven to be a reputable distributor. Be sure to familiarize yourself with Amazon’s policies before putting all your eggs in this basket.
Etsy: Etsy is not a selling platform for all sellers, but it is perfect for those selling handmade and vintage items, as well as craft supplies. Etsy shoppers are looking for unique items and usually aren’t as bothered by paying for shipping. So if you find a vintage set of picture frames at a flea market, you may be able to sell it for more on Etsy.
Unlike sourcing, where more variety is often better, when it comes to selling platforms, there’s some benefit to starting smaller. When you’re just starting out, you may want to limit yourself to selling on two or so marketplaces; as you become more comfortable with the process of listing products, fulfilling orders, and managing customer feedback, you can then expand to keep a steady flow of sales (and earn more money!)
The benefit of selling on marketplaces such as the ones listed above is that they come with built-in audiences of motivated buyers, as well as all the ordering infrastructure. In exchange for a small fee, sites like Amazon and eBay take on the cost and hassle of those overhead expenses.
Getting Started Listing Your Products
Amazon: If you are selling on Amazon, you will have two options about how you’ll list (and fulfill) items.
- Merchant Fulfilled Network (MFN): Merchant Fulfilled refers to sellers who ship, fulfill, and therefore list their items all on their own on the Amazon marketplace. When you’re in Seller Central, you’ll click on “Add an item” and then be presented with a search bar and the option to create a new product listing. The simplest way to add a product is to enter identifiable product information (such as UPC, model number, and product name).
- Fulfilled by Amazon (FBA): Using Amazon’s FBA service leaves you to select the goods you want to sell, but provides listing information, such as product description and images, for items. When listing an item on Amazon, you set your price, the item condition, and your shipping rates.
eBay: When listing on eBay, simply click on the sell tab in the top right hand corner, and you’ll be led through the listings process step by step. While not all the product information is required in order to list, it will help your listing be seen by more shoppers looking for a specific item.
Etsy: Before you can start listing on Etsy, you’ll need to register as a seller. After you’ve done that, you’ll go to Shop Manager > Listings > Add a Listing. Like eBay, Etsy’s workflow guides you through the listing process step by step.
Excited yet? By now, we hope the gears are turning about how you’ll turn your next shopping trip or weekend outing into a sourcing expedition. Now that you know to keep your eyes peeled for good deals (and freebies!), and the many places you can sell, you should feel confident about putting together your inventory sourcing strategy. Ready to source? Check out what’s new on BULQ.