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My name is Shawn Coomer and I have built a $1M+ reselling business by buying and selling merchandise, tickets and gift cards. Find out about my reselling journey here.
How to Begin Reselling
It’s a story as old as time. Procure some sort of product in high demand for a low price and turn around and sell it to someone for a higher price. This type of arbitrage existed long before the internet, but in today’s world we have access to more people and thus more opportunities to pair a product with a market that is demanding it.
While perhaps you clicked on this article hoping to find out how to sign up for Fulfillment by Amazon or eBay that isn’t the information I will provide in this post. Why not? Because more important than signing up for a seller account, is developing the skills that will allow you to find products to sell.
Find Hot Products
As with anything, reselling is a skill learned over time. One of the ways to start reselling is to find pretty obvious hot products to sell. (Using Amazon rankings can be a good way for a new person to do this.) For example we have talked lately about Fire Tablet sales at Amazon. Mark has made some money buying those and selling them on eBay. This works for a couple of reasons.
- He is buying a product with a lot of demand.
- He is getting that product at a substantial discount over its normal price.
In other words, he is able to sell the tablet on eBay for less than Amazon sells it normally. Customers see that they are getting a “deal” by shopping on eBay and Mark gets to make a few dollars. But perhaps more important than that, this type of deal is fairly low risk, because Mark’s costs are relatively low.
Limit Your Risk
So much of reselling is about taking risks. At some point you will make a bad decision and lose money, but do that too often and it ain’t pretty. That’s why in the beginning you should do everything you can to limit the risks of reselling.
How to limit reselling risks:
- Don’t buy too many of a product
- Factor in returns if applicable into your profit calculations
- Avoid high return items such as certain electronics and headphones, etc.
- Don’t spend more than you are willing to lose
The Chromecast Story
Waaaay back in 2013 out of nowhere Google announced their $35 Chromecast streaming device and released it for sale the same day. As a tech nerd I was excited to purchase it for myself, but I also decided that I should probably purchase a few to resell.
Just moments after the announcement Amazon began selling them with no quantity limit and I ordered a few. (They began limiting the quantity shortly thereafter and sold out by the end of the day.) For a few moments I contemplated ordering 100 of them, but then I determined that wasn’t practical for me. In the end I sold a couple of Chromecast units I had for about $60 plus shipping or a profit of roughly $15ish per unit.
This story is interesting to me for a couple of reasons.
- Obviously I could have made a lot more money had I purchased 100 units, however my risk tolerance was too low.
- I made the right decision, because I had no assurance this product would sell out and that I would be able to make a profit. $3,500 was a huge outlay for me at the time given I only resold stuff occasionally and in small numbers.
But this story is important for another reason. That type of deal is exactly the one you want to start with. The way I see it, here is what you should look for when beginning to resell merchandise.
- Find a low cost high demand product (or three) with at least some profit margin
- Order a few units and sell them across whatever platforms you want to try
- Develop your processes and skills for selling on each platform. (i.e. shipping, customer service, etc.)
If you are able to successfully do this, then a few things will happen. First, you hopefully will make a few dollars or at the very least won’t lose too much. You’ll also figure out where you want to sell your products and how reselling fits into your life. Finally, something in your brain will click and drive you to the next deal. And to the next one and so on.
New Resellers Biggest Mistake
Ok so this sounds great right? Well, I hate to hit you over the head with risk one more time, but this is important. You see, it’s in some people’s nature to jump overboard when it comes to things that excite them. Many of us know someone who has learned of miles/points and jumped in by applying for 50 credit cards which caused the banks to shut them down. In other words, slow and steady wins the race.
So how does this apply to reselling? Well, certain people will want to go “all-in” after their first reselling victory. (It’s A TRAP!) Unfortunately that turns out badly for most. Just because you do this once or twice, doesn’t mean you should increase your risk factor 100X. If you do, you might just end up regretting that decision.
Reselling can be fun and lucrative, but as I have mentioned before it really is a business. If you approach it like a business and put in the work the rest will follow. Follow that first product to the second and then the third and before long your brain will see money making opportunities where seemingly none existed before.
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.