Getting Started & Finding Products for Resale

What to sell Online

Strange as this may sound, one of the most perplexing questions and most times the biggest roadblock to starting your own business is determining/deciding what to sell. Initially most people, myself included, know they want to start their own business and are determined enough to push through but lack enough product sourcing and product marketability knowledge. Even worse some people start out with a product they believe will be a revolutionary hit in the market and throw all their time and resources promoting it only to realize that nobody really wants to buy it!

The truth is you can sell almost anything. I have sold products online and offline that I could have sworn would never sell. New and used, odd and awkward, hits and boring… they all sell (eventually). Through this experience I have learnt that you don't really have to reinvent the wheel to be successful. All you have to do is present it better and to the right audience.

As an example, we once received a pallet of one “As Seen on TV” health and fitness product (which I will not name for fear of disparaging it). It was part of a large liquidation shipment that we received from a National Retailer. My personal opinion of it (which I actually voiced to my wife) was “who the heck is going to buy this!” What made it worse (In my eyes) was that some of them had obvious signs of use. Now keep in mind we had received this pallet along with other products. So we set it aside with the intention of processing what we considered to be the “Hot Items” first and returning to this one later. Like most people, we considered electronics like laptops, tablets, smartphones, and home theater systems our hot items.

A couple of weeks later we finally processed and listed this product. Amazingly, within 2 more weeks we had completely sold out of every single piece! Both new and used! It sold faster than our supposed “hot items”

We have had experiences similar to the one above with other products and in a wide range of product categories. However, our reaction now is completely different. This experience led us to question our original perspective. We asked ourselves several questions:

1.Why do people buy what they buy

2.Why did this cheap looking item do better than our supposed “hot items”

3.How can we figure out what our top sellers so we can buy more of them

While we are still trying to answer these questions, we have concluded that most products at the right price will sell. So how do you determine the right products for your resale business?

Below we will explore

So let's dive in:

Finding the right products

Several factors go into determining the “right” product. In my opinion and in no particular order, they are:

o Your purchase price relative to the market price

o Your Knowledge of the product

o Seasonal Timing

o How fast will it sell

o How easy is it to market

o How easy is it to acquire it for resale

However in one factor absolutely trumps them all… PRICE. I once read somewhere (several places actually) that you make money when you buy not when you sell. If you take nothing else away from reading this article, don’t ever forget that. To us, this meant if we were offered an item being sold to us at $9 per piece, with a current, retail price of $32 per piece; and another sold for $5 retailing at $10, we always picked the $9 item no matter how “hot” or “awesome” we thought the $5 item was.

We apply this principle to every single purchase we make. No matter how hot or dull we think it is. Our perception doesn’t matter because the numbers don’t lie especially when you know what numbers to look for.

Again we just happened to “stumble“ on to that wisdom and here’s how it came about.

Now, as a backdrop, just so you have an idea of how this worked for us, when we receive the truckload, we have no idea what is on it, what condition it’s in or what quantities (this is where the reliable sources section below comes in)

So on a recent truckload we received two pallets full of VCR/DVD Combos. These play both DVD’s and VCR tapes. That was almost 20% of the entire load. Once again I’m thinking “in the 21st century who the heck is still using VCRs?” However, since we are a little smarter now, we go online and price them out. Our purchase price per piece averaged out to be about $19 per piece. Upon more research we found that a used one of these was selling at $92 and a new one was selling at $129. The most recent seller had sold 6 in the last week! So guess what we were listing first? 

On the other hand, right about the same time we had another one of our vendors offered us a wholesale load that had a Pallet of iPads (average purchase price was $140 selling for $180) and some 32 inch LED TVs (average purchase price $90 selling for $180) and Bluetooth Home theater equipment (average purchase price $55 selling for about $120)

In the past we had bought these types of loads and learnt an important lesson which I will describe in the Pricing section. We passed on this load.

Finding reliable sources

How to determining a reliable source

To us and most in the liquidation industry, a reliable source would include the following:

o They would have a steady source of inventory

o They know their product well including pricing and product condition (a really important factor in the liquidation industry)

o You make money when you buy not when you sell. Although you are buying from your source, you should get the sense that they have your interests at heart. And nothing shows your best interests being taken care of as much as keeping your costs low. They should be helping you with shipping logistics, bulk discounts, selling tips etc. Tampabay Wholesale excels at this.

o  They should be honest about their products’ condition, availability, their delivery time (if any). These are important because they will directly affect how you run your business.

Consider other expenses

o Freight Costs – cost of shipping and handling to you.

o Damage costs – any damages to the products while in transit, or even before purchasing in the case of store return products

o Storage Costs – what will it cost you to store the products. Do you rent a storage locker, warehouse, your garage? Are there any other overhead costs involved

o Expect to have some unexpected expenses.

Pricing to sell - Remember cash is King

o  Always Price to sell fast sitting on inventory could put you out of business fast!

o  Don’t be greedy, even if “you think” an item can sell for more in the future, but you have an offer to sell it today at a smaller profit, take the sale. Remember you have no guarantees about tomorrow so take what you can today.

An example of this was when we received a shipment of some Sony Smartwatch2’s. At the time they were selling at $130.00 this was in the September October period. We felt that we may be able to get more come the busy holiday season. However, knowing that our supplier still had more in stock we decided to list them for sale at about $140 and if we ran out by the time Christmas rolled around we would order some more. We sold out in about 3 weeks and ordered some more (twice as many this time). What we had not factored in was the fact that during that period Sony came out with the upgraded Sony Smartwatch3. By the time the holiday shopping season came they were selling for $89! We had bought them at a great price (remember it’s all about how you buy?) so we were still able to sell them at a profit.

I know you’re probably thinking we should have known about the upgrade (and you’re right) but when you are dealing with hundreds of products from different manufacturers some end up slipping through the cracks.

In conclusion whether you are new to this or have some experience in this field, one personal characteristic that will serve you very well is being open and willing to learn.

You ALWAYS have to be willing and open to learning new things. In this business you will never know everything. You will encounter new products, new ideas, new processes, new marketplaces and new suppliers. While it is advisable to focus and master your niche you also don’t want to be static and rigid. We have learnt and continue to learn from other successful (and unsuccessful) businesses; from books and articles; we have gotten ideas from family and friends visiting our business; from our business networks and mentors; from our suppliers; and even from our employees. Never dismiss any one or any experience. In business lessons are quite expensive so we are quite appreciative of the free ones!

The moment you think you know it all is the moment you start to fail.

So in summary, what should you take away from this?

a)  Be ready to work – nothing good comes easy

b)  If you buy right you can sell anything.

c)  Price your products based on your market not what “you think”

d)  Consider all your costs

e)  Find a reliable source that you can trust

f)   Don’t be greedy take the sure deal today rather than hold out for more tomorrow

g)  Always be flexible and willing to learn and grow. 

Those are a few important pointers we have picked up along the way among many more. Look out for more tips and updates in the coming weeks. We have a ton more stories to share.