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Owning a small business is no easy feat! And if you’ve made it this far, that’s something to celebrate. According to Investopedia, approximately 20% of new businesses fail during their first two years. If you’ve just recently joined the resale business industry, or have pivoted your business to focus on it more recently, then you made a good call.
In 2020, 120 million items were sold across the B-Stock recommerce platform. That’s a lot of business! You can have a successful resale business based on the concept of retail arbitrage—which is essentially purchasing products from a retailer at a lower price and reselling them for profit. So if you’re already started, or are just looking for some good industry tips, we’ve got you covered.
There is a seasonality to certain product categories. A slower storm season may lead to an influx of customer returns on generators, after winter, you’re more likely to see overstock in coats, jackets, and warmer clothing. And then there are trends. Home & garden inventory isn’t subject to as many quickly changing trends because furniture and fixtures are pretty steady year-round. However, with electronics and apparel, between new releases and new trends, merchandise can depreciate fairly quickly
In order to buy your inventory tax-free, you will need to provide a resale certificate. You submit one when you register to the B-Stock platform. What it really does is save you from paying taxes twice! You pass those savings on to your customers and are required to charge tax when an item sells. But did you know that you have to renew this certificate in certain states?
It can get confusing tracking all the auctions you’re interested in. Worse yet, get outbid because you didn’t see an auction was closing soon! Luckily, on B-Stock, you can add auctions to your “Watchlist” and also opt-in for SMS notifications on your account. Alternatively, you can also track auctions you’re interested in by utilizing spreadsheets. If you like organizing your data all in one place, check out Airtable. Airtable databases can store all sorts of data including images, videos, links, files, and so much more.
This tip is for the new resellers out there. Spend some time familiarizing yourself with common auction terms! Words like “proxy bids” and “popcorn bidding” can sound confusing if you’re new to the world of online auctions. Don’t get outbid and miss out on inventory you’re interested in because you didn’t know how an auction works.
Shipping can vary drastically depending on the category you’re buying. Consider how much space furniture and large appliances take up on a truck versus a pallet of men’s polos. There are ways to save on shipping, but always be conscious of the category you’re buying and bidding on, too. You may find apparel lots are quicker to turn around rather than home & garden lots based on your customers’ needs. Or, that your higher shipping costs are worth it for the bigger profit you can make from furniture/ home & garden inventory.
Consolidated shipping combines multiple LTL shipments into one full truckload shipment. By doing this, you can save time on shipments and significantly reduce your costs. However, your won lots must be coming from a single warehouse location. Keep in mind, not every warehouse location offers consolidated shipping. You must also win the minimum amount of pallet spaces necessary within a certain number of business days to take advantage of a single truckload delivery.
Some marketplaces allow for buyer-arranged shipping. If that happens to be cheaper for you and you have a truck and the proper loading equipment, then this can be an option. Especially if you live in close proximity to a retailer’s distribution center, you can potentially save big and pick up liquidation inventory more frequently!
More inventory at once with less individual shipping costs. Need we say more? If you know you’re looking to make a big order, try and avoid multiple, smaller shipments and see if it’s cheaper to go big on a full truckload. Better yet, some marketplaces, like Walmart for example, provide subsidized shipping rates, discounting the first 100 miles for most categories.
Organization is key! Inventory tracking tools are available for your resale business at any stage. These can help you keep track of inventory that has just arrived, been sold, and shipped. You can catalog SKUs, UPCs, and quantities with a simple spreadsheet, or in a more elaborate inventory tracking software. Paid software, like QuickBooks and Shopify, have multiple membership tiers. So depending on the breadth of your operation, you can work with a free version or upgrade. You can even start a free trial on apps like Sortly as a test and see how it goes.
It’s hard to list items and make sales if your inventory isn’t properly organized. That goes for your workspace as well. Keep your area organized, whether that is a brick-and-mortar location, stockroom, home office, garage, storage unit, or even a warehouse. Install proper storage racks and shelving units, and have space to receive, sort, photograph, store, and package orders. Read our blog 9 Tips for Organizing Your Liquidation Pallets for more ideas!
Stay on top of customer demands and source inventory before you run out. Keep your bestsellers on hand and if possible, source sooner rather than later. You always have to buffer in shipping time when sourcing liquidation inventory as it comes straight from retailers and their distribution centers.
We can’t stress this tip enough! Prior to listing your inventory for resale, test every single unit. Did it come with batteries? Is the charger for the power tool or iPhone still working? When you’re purchasing liquidation pallets, you always want to test the merchandise. Sometimes you can end up with a dud – but always check your condition codes before bidding!
Have you tried Mercari? Instagram? Facebook Marketplace? It doesn’t hurt to branch out. You can cross-promote on social media, so if you haven’t set up business pages yet, you should! Seller fees will vary depending on the site. And you will also want to consider where your buyer bases will be the strongest. For example, specific sites are geared towards apparel. And others offer more of a variety.
Look for free trials and sites that will help you sell inventory. There are sometimes plug-ins that will allow you to enhance your product listing. You can also pay to have software tools at your disposal like QuickBooks Plus, where you can have your accounting and bookkeeping done. Or Canva, where you can create beautiful templates for product listing. Or even SEO plug-ins on WordPress and Shopify.
This extra help can be in the form of a virtual assistant, contractor, or even employees if you’re ready. They can help with miscellaneous things like administrative work, listing, receiving shipments, organizing inventory, or even marketing.
Customer service should be a top priority. Sometimes things go wrong during shipping, or the product wasn’t what they were expecting, or could even be defective. Despite all your best efforts to mitigate problems like that by offering accurate product information and photography, and testing inventory yourself, things happen. It’s always better to have a generous returns policy than create negative experiences and a bad reputation.
Whether that be a certain percentage off or a first-time buyer discount code, shoppers love promotions. You can encourage them to spend more on your site if they are getting a good deal out of it! Even offering a limited-time free shipping promo on your website can be enticing enough to turn viewers into customers.
Pricing will vary depending on which reselling platform you’re using, but don’t write it off completely. This can help your listings be at the top of search results and increase sales. If you have the budget for it, you can boost certain posts and see how it goes! For an easy rundown of how to advertise your resale business, check out this article.
You can set up an at-home studio, or pay a photographer, but whatever you do, don’t skimp out on the photography. Take a Skillshare course if you want to improve your photography. In addition to that, you might consider investing in professional lighting equipment and a nice camera. Or even just a phone with decent camera capabilities. Always, always, always, shoot for realistic photos—better that the customer knows exactly what they’re getting and if there are any defects to be aware of.
Make it easy to leave a review on your site or Google. You can also follow up with customers individually via email and ask for a testimonial about their experience ordering from you! These reviews will ultimately bring in more customers as it establishes stronger consumer trust.
The B-Stock Network includes 60+ marketplaces where you can source bulk lots of returned and excess merchandise – ranging from pallets to truckloads – from retailers like Best Buy, Target, Walmart, Wayfair, Amazon, The Home Depot, QVC, Walgreens, and GameStop. Categories include apparel, cell phones, consumer electronics, home & garden, furniture, appliances, groceries, health and beauty, kids toys, and more.
Catch up on Buying Basics: How to Become a B-Stock Buyer Part 1 & 2 to start your reselling journey. Or if you’re ready to grow your resale business to new heights, start sourcing with B-Stock’s liquidation auctions today.