How to Start an Online Resale Business

by Shanika Chapman; Updated September 26, 2017

As more people turn to the Internet for their shopping needs, what better time to start an online business? A resale business can be particularly lucrative, as long as you’ve got popular products and competitive prices. Your overhead is minimal—for about $3,000 you can get your business up and running.

Items you will need

  • Website
  • Supplier
  • Packaging materials
  • Storage space
  • Liability insurance
Step 1

Find a niche. Start by examining your hobbies, interests and expertise. Then look for products that complement these. For example, if you are particularly knowledgeable about cameras or electronics, consider selling them. If you’re a stay-at-home mom and cloth diaper enthusiast, you may be able to make a living selling cloth diapers and accessories. The more you know about your product, the better your business will be. Insider knowledge will save you money when you negotiate prices with suppliers and help you provide better customer service.

Step 2

Conduct market research to determine the profitability of the products you intend to sell. Start by creating an account on eBay. You can search the completed listings section for your products to find out for how much they sold. Visit Yahoo Buzz and Google to learn the most searched terms in the past day or week. Search Google Trends for keywords related to your products to get an idea of their popularity. Visit related forums to learn about hot items and about issues or concerns with products you’d like to sell. Or hit the streets and poll people who you expect will buy your products.

When you do your research, consider the season. During busy seasons like back-to-school and Christmas, you may be able to charge more than you would during off-seasons. For example, backpacks that sell for $30 during June and July may sell for only $10 in March and April. Keep this in mind when deciding whether your product will be profitable.

Step 3

Find a wholesale supplier. If you don’t have room to house your products, you’ll need to find a supplier that can ship directly to customers. Drop-shipping is convenient but will eat into your profits. Instead, convert a spare room or garage to house your inventory. Then purchase business liability insurance.

When working with a supplier, implement security measures such as paying with a credit card or debit card that offers buyer protection and speaking to the supplier over the phone.

Step 4

Create a name and logo for your resale business and then purchase a website. At a minimum, you will need a domain name, web host, template and shopping cart. Your web host may provide all of that, or you may choose to purchase each component. Select a web host that will provide constant customer support and tutorials that will show you how to set up your site. Look for a host that offers a variety of free templates, marketing credits and the ability to create coupons and newsletters. Get a basic understanding of hypertext markup language and search engine optimization. Knowing how to use HTML will allow you to adjust your template or website, and knowledge of SEO will ensure that your site is searchable.

Step 5

Detail your shipping policy, return policy and commitment to customer service on your website. Tell customers how you obtain your goods and assure them the goods are authentic. Put quality images on your site. Suppliers may provide you with stock photos.

Step 6

Purchase packaging materials for your online store. Select a packaging company that can provide you with materials that include your business logo. Then contact UPS and FedEx to obtain discounted shipping quotes. You may find that it is cheaper to use the post office. In that case, create all of your shipping labels online for discounted rates. Implement a packaging and shipping system, such as every other day or twice per week.

Tips

  • Learn your tax liability as soon as possible. You may be expected to submit quarterly self-employment taxes. Consult with a lawyer or accountant to determine what business structure is right for you. It may be advantageous to establish a limited liability company. Other places to procure resalable goods are estate sales, thrift stores and clearance racks. Consider selling your products on eBay, Etsy or Amazon.

About the Author

Shanika Chapman has been writing business-related articles since 2009. She holds a Bachelor of Science in social science from the University of Maryland University College. Chapman also served for four years in the Air Force and has run a successful business since 2008.