A reseller business can be a great option for first-time entrepreneurs. With this business model, you don’t need a revolutionary new product idea to start your own ecommerce business. In fact, you don’t even have to manufacture your own products, meaning it’s less of a hassle to get the business started.
Interested? Then read on to learn the meaning of reseller, why you should become a reseller, and how to start a reselling business online.
What is a reseller?
A reseller is a person or company that buys products from different suppliers and sells them to their own customers (usually at a profit). Resellers often provide some value-add in terms of the customer experience, which enables them to mark up the price of the items they sell. This could be something as simple as an in-depth product description, a customer loyalty program, or live chat support.
Sourcing products isn’t necessarily easy and often requires a large capital investment. Resellers are able to navigate this by purchasing products only after they’ve made a sale and have been paid by the customer. Think of reselling as a form of dropshipping, where individuals source materials and products from a variety of suppliers but do not commit to selling through any purchased inventory upfront.
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This business model is easier for the average person to start and can be highly profitable, especially if you have niche expertise. For example, someone who is highly knowledgeable about fashion could start a reselling business around the different clothes that are currently on trend.
What are the advantages of being a reseller?
There are a number of benefits to starting an online resale business:
Launch your business sooner
Becoming a reseller allows you to start a business quickly. You don’t need to wait for inventory to arrive or wait for anything at all, for that matter. You can set up and launch the same day you build your online store. After you’ve added a few great reseller products and some content to your store, you can start marketing your business.
Carry no inventory
Another advantage of becoming a reseller is that you don’t have to carry inventory. You can source products from dropshipping suppliers, who allow you to resell without having to purchase inventory in advance. You only pay for goods as customers order them from your website, making it a great choice for new entrepreneurs. Even if you sell niche products or boutique clothing, you can still make a profit without holding stock.
Resell an extensive range
If you become a reseller, you’ll be able to sell a vast range of products. If you resell clothes, you can offer shoes, jewelry, accessories, handbags, lingerie, or related products as your business grows. Adding other products to your reseller online shop won’t cost more, as you only pay for goods that customers buy from your store.
Lower your financial risk
A benefit to starting a reseller business is that the financial cost is low. This is the perfect business for budget-conscious and risk-averse entrepreneurs. You won’t need to buy bulk inventory. Shipping fees aren’t sky high in a reseller business. You only pay for goods as customers order them through your reseller online shop. Thus, the financial risk of doing business is low.
Set your own Margins
When you become a reseller, you’re free to set your own margins. You can choose to price your products however you want. Since the cost of goods is low, you can price your products to ensure your reseller business is profitable. The higher you set your price, the more you can make. Be sure to look at industry standards for product pricing.
How to become a reseller
- Register your business. Get a business license where you do business and/or are incorporated. To resell in other states, you’ll need to file a Foreign Qualification.
- Check into state laws. In most states, you should be able to use an out-of-state reseller’s permit that eliminates the need to pay sales tax on resale items. However, this won’t apply in every jurisdiction. Make sure to check the state laws on reselling before you open for business.
- Get a resale permit. File one for each state where you purchase and sell items. Some fees may apply.
In the United States, a resale permit allows individuals to purchase certain items free of sales tax. However, you do have to collect the sales tax from customers and send it to the state.
The sales tax laws vary by state, with each state levying its own sales tax rate. Some states also require resellers to collect local sales tax, which must be sent separately from the statewide sales tax. Check with your local jurisdiction to learn what taxes apply in your case.
4 reseller business ideas/opportunities
In a reseller business, you can sell virtually anything. You can start a clothing store or resell shoes or even vintage products. The fact that you don’t have to invest in manufacturing and product development makes reselling a great home business idea to start and grow as you see fit.
1. Clothing business
Clothing is a huge opportunity, as you can resell to women, men, and children of all ages. When running a reseller clothing business, you can test a few different clothing niches at a time and decide which ones work the best for you. You can remove low-performing styles without incurring any cost and add new items as they come into fashion.
When setting up a reseller business idea like clothing, it is important to plan ahead, because clothing lines are cyclical depending on seasons and popular holidays.
2. Pet supplies store
Pet supplies offer a wide range of choices—from clothing to food to leashes and everything in between. Pet parents always need supplies, so there’s ample opportunity to turn a profit by reselling.
Dog and cat parents are the most popular audience to target, but you can also resell products that appeal to owners of niche pets like rodents, pigs, or fish. Use social media to share your products and get customers to show off their purchases online in order to gain traction.
3. Cosmetics business
As a reseller business idea, selling cosmetics online can be a great way of making money, as shipping is relatively low and order volume is normally larger than the average.
Cosmetics don’t just mean makeup, though. It can mean skin care creams and hair care products also. This means you can start a reseller business that caters to men and women of all ages in one store.
4. Car accessories business
Starting a reseller business for car accessories can be very profitable if you understand the market. People spend a lot of time in their cars nowadays and want to make them as comfortable as possible.
Research what your customers want and source them from reputable resellers to ensure your reviews are always positive. Some product ideas are car seat storage bags, car seat back hooks, luminous car parking cards, radio receiver tuner with FM transmitter, and car Bluetooth speakerphone.
How to make money with a reseller online shop
You likely want to make money fast with your new reseller business. Fortunately, there are many strategies you can implement to ensure your reseller online shop grows and remains profitable.
Price your products well
While marketing your products is important, pricing your products well can help ensure that your business remains profitable. Some blogs recommend having a $2 profit to stay competitive. This is terrible advice.
Your product price shouldn’t just cover the cost of goods. It also covers the cost of marketing, employees (when you start hiring), expenses such as Shopify fees, and more. As long as your product price makes sense for the market, you don’t need to underprice yourself.
Run social media ads
In general, Facebook ads tend to be the most popular choice for resellers. But TikTok and Instagram ads are also gaining traction due to their growing user base and commerce features.
You’ll need to experiment with different platforms to see where your brand resonates best with the audience. Perhaps TikTok could be your best-performing marketing channel, especially if you’re good at making personalized short videos. Experiment, analyze, and double down!
Create content around your business
From video marketing to blogging, content creation can help elevate your brand’s presence. The more high-quality content you create, the more likely you are to drive traffic back to your store. By consistently creating content for your brand, you’ll find that, over time, your sales will grow.
Need more marketing ideas? In our post How to Market a Product, you’ll find 24 different effective marketing tips that can help you drive more traffic to your store. Using the tips in the article, you’ll be more likely to land your first few sales in your reseller business.
Best app to find suppliers for your reseller business
DSers is a great tool for those interested in sourcing products to resell. While DSers is a dropshipping solution, the same principles apply to a reseller product dropship program. You’ll be able to resell goods from a manufacturer without carrying inventory and more. Here are a few other great reasons to consider DSers:
- One-click product import: You can choose to add hundreds of items to your store with one simple click. You can sort through order volume, high reviews, and seller rating to find the right products for your reseller online shop.
- One-click order processing: DSers’ reseller dropship app allows you to process orders in one click. Rather than manually typing in the customer’s address, you can click a button and all of the customer details will be sent directly to the corresponding supplier.
- Choose from millions of products: As someone selling reseller products, variety allows you to find the best products to sell to your customers. You can choose from millions of great products to sell to your customers. By offering customers variety, you’ll be more likely to land a sale.
- Suppliers ship products for you: In a reseller business, you won’t have to package or ship goods to customers. Your suppliers will do that for you. This saves you time and money from fewer labor costs. You’ll have more time to focus on marketing and growing your store’s sales.
- Automatic price changes: When a supplier changes its price, you can have your store automatically update your product pricing. This allows you to maintain a profitable business or offer special discounts.
- Track shipments: You can easily track your customers’ shipments in the DSers app. When customers ask questions about their package, you can give them specific information, as tracking information is easily accessible.
- Easily find products with affordable shipping: With DSers, reseller businesses can sell products with affordable shipping costs. You can choose to sort items with free shipping or ePacket shipping. This allows you to send customers their products quickly and affordably.
- You can earn more money: You’ll be able to set your own margins and keep your reseller business costs low. This type of business model gives you a better chance to earn more money than many competing brands. With low product pricing, you’ll be able to offer market pricing which still allows you to run a profitable business.
To use DSers, you’ll need to have a store on Shopify. Learn how to create a Shopify store in less than 30 minutes.
Start your reseller business today
Reselling is a low-risk way to dip your toes into launching and running an ecommerce business. Your website can be designed and styled any way you like, and you just need to add products without investing in inventory upfront. Promotions, sales, and product pricing will all be done by you. Follow the tips above to launch and grow your resale business today.
How to start a reseller business FAQ
How do you become a reseller?
- Get a business license.
- Research state laws and regulations.
- Prep all the necessary documentation.
- File for a resale permit.
Is being a reseller profitable?
In general, resellers earn anywhere from 15% to 40% profit on the products they sell. However, your exact profit will be determined by several factors, such as your markup and overhead costs.
Is there anything else you’d like to know more about and wish was included in this article? Let us know in the comments below!