A resale business has the potential to be very profitable, if it is run correctly. This type of business can be run entirely online, or it can also be located in a brick and mortar shop as well. Selling online continues to get easier, as social media sites provide an additional resource to go along with a merchant website and online auctions. However, there are some common mistakes that can steal success for resellers, if they are not careful.
Holding Too Much Inventory
Some resellers offer drop shipping directly from the retailer, rather than holding any inventory of their own. This works well for some online-only resellers, but not for all, and certainly not for anyone who has a physical store. The problem with inventory is that it is always hard to estimate need, especially in the early days of a business. However, over-buying to make certain there is never a shortage could mean having money tied up in inventory that is needed for monthly expenses. Without lights or a website, it is tough to sell anything.
Buying What They Prefer
There are some resellers that are amazing trendsetters who can pick out what will be hot just by what they like. This is not always the case. Just because the business owner likes something, or dislikes it, that does not mean they are speaking for all of their customers. It is better to be aware of trends, know the clientele and what they are seeking and purchase items to resell that match their interests.
Forgetting About Customer Service
All retail is about the product quality and price, but what makes a business stand out is customer service. Respect for the customer is hard to find today, and when it is done correctly it is noticed. Concentrating on getting the sale, without considering how the buyer felt about what they received, and how they received it, is a huge mistake that could reduce the amount of repeat buyers a business has.
Underestimating Their Overall Expenses
When pricing items, many retailers try one of two methods. Either they see what everyone else is selling it for, or they add a fixed markup percentage on everything. As long as they are selling for more than what they paid, they profit, right? Wrong. There are many additional expenses in any business. When selling is the only way to bring in income, it has to cover everything including payroll and taxes. This should be considered when agreeing to a price for purchasing merchandise as well as when pricing it for sale.
Resellers can buy in bulk or specialize in one-of-a-kind items like antiques. In order to be successful, they must understand the retail market, be willing to invest the time to stay updated on new trends and be continuously seeking new merchandise, at lower rates. Keeping costs low and increasing the volume of sales regularly is important to building a small shop or side job into a successful, independent business.