If you think reselling products is a lucrative business model, you’re on to something!
Consumer demands are continuously changing, and in recent years, they have been shifting to resale and secondhand products. According to a report by CNBC, these markets are expected to expand to $53 million by 2023—a shift is mainly fueled by consumer trends.
There are plenty of reasons for business owners to look into this market. Keep reading as we explore why starting a reselling business is easier than you think.
What Is Reselling?
Reselling involves the purchase of goods or services with the intention of selling them to consumers. A reseller or a reselling business will buy products in large amounts for a lower price-per-product. They will then mark these products up and sell them to consumers for profit.
There is often some confusion between resellers and distributors. They are entirely different. Distributors work directly with manufacturers to deliver products to consumers, whereas resellers buy products from manufacturers, liquidators, retailers, and other suppliers.
Reselling can involve new or secondhand products. It is a low-risk business and a potentially very lucrative model that does not require owners and entrepreneurs to delve into tasks like product development or manufacturing.
Let’s take a look at the reasons why starting a reselling business is easier than you may think:
Consumer Demand and Marketing
The main reasons to consider a reselling business are the ever-increasing consumer demand and how easy it is to market products nowadays.
Consumer behavior and mindset are shifting rapidly toward sustainable products. This is fueled by climate change and the now well-known ill effects of fast fashion. This shift has increased the demand and interest in resale products, which makes marketing and selling these products easier.
That’s not all. There’s another aspect of resale goods that has always attracted demand from consumers: the appeal of vintage or antique products. These types of reselling businesses provide tons of value to consumers.
There has long been consistent demand for such products, and modern marketing processes make everything easier for businesses.
Other reasons driving consumer demand in the world of reselling include:
- Access to luxury goods at a lower price
- Access to limited edition goods
Ease of Doing Business
Many platforms allow small businesses and even individual entrepreneurs to run reselling businesses online. The rise of ecommerce has opened the floodgates, and there are many options to choose from: traditional website storefronts, apps, online marketplaces, social media, and more.
Starting a reselling business is not nearly as resource-consuming as you may think. You don’t have to be a coding expert or marketing guru to navigate these intuitive selling platforms.
Additionally, finding products for reselling is easier than ever. From trade shows to liquidation marketplaces, you have lots of options to source inventory.
Another reason why reselling is easier to begin with is that it offers business owners a lot of flexibility. You do not need huge capital or too many resources to get it up and running.
Easy to Set Up
A reselling business is very simple to set up, especially if you opt for reseller dropshipping. With a dropship provider, you don’t need to worry about inventory management or order fulfillment.
And since you don’t need to worry about the supply chain side of things, you can immediately start your business. You only need the following:
- Do your research on the niche audience you’re catering to
- Choose the best marketing channels for your products
- Figure out how to purchase liquidation pallets
- Find the best supplier for your chosen products
- Simply find your niche and get started!
Low Financial Risk
From microbusinesses to large-scale enterprises, all businesses require some type of investment initially. Not every aspiring business owner or entrepreneur might have access to the kind of money needed for traditional storefronts.
With reselling, this problem is taken care of. This business model doesn’t require owners to make a substantial financial investment for manufacturing a product or building a physical store. This eliminates the risk of potential losses.
And when you work with an efficient drop shipping provider, you’re also free of the risks and costs of managing inventory and logistics.
You’re already buying customer return pallets for sale at a very low cost-per-piece from the manufacturers. But then you’re also free to set your own margins.
This is a lucrative opportunity for resellers because there is a wide range for pricing the products. Marking rare, high-quality products at a very high price can lead to significant returns and continuous profit.
In a different scenario, resellers can choose to mark the products at a profitable but lower price point than what other retailers are selling. This way, the resellers can attract their target audience and make up for the thin profit margin with large sales.
If you price your products correctly, you can just watch the profits flow in. This profitable and flexible product pricing is hard to find in any other business model.
Ease of Expansion
Expanding into other verticals isn’t necessarily similar to starting a new business, but it is close.
For traditional businesses, expansion is nearly impossible to execute if you don’t have years of continuous high profits. But for a reselling business, it is easier than it seems!
Once your business has a good consumer base, you can delve into other verticals closely related to your niche. Since you already have a handle on your products and corresponding consumer demand, it should be easy to explore similar options.
You can ease the process even further if you work with a drop shipping provider to sell your products online. You won’t have to worry about buying pallets before selling them!
Final Thoughts on Reselling Businesses
The bottom line is that reselling is not as difficult as other business models. All you need is a bit of time, research, effort, and some intelligent strategizing.
Once you’ve got your business off the ground, you can even look at scaling opportunities and expand your niche.
Are you motivated to start your own reselling business? What industry are you looking into? Write to us!