Building a business on reselling goods: choosing competitive niches

Many modern people are thinking about starting their own business. This is an opportunity to keep the entire process of company development under personal control, while opening up new opportunities for its promotion, increasing their own income. But at the same time, there are many risks here, which can be minimized by careful and comprehensive preliminary work. And one of the most responsible and important tasks is to choose the right direction of business.

Quite often, beginning entrepreneurs rely on trade. But here it is also important to understand how to organize such a business and how to run it in the future, what exactly to sell, whether you need to engage in production yourself or where you can find good suppliers, what channels for selling products will be the most effective. Those who are just starting their work in the market as a whole, who would like to minimize the risks and efforts to launch a company often opt for reselling goods. This business format is much easier to implement than other formats. But here too there are a lot of nuances, risks, which must be taken into account.

Earnings from resale directly depend on the initial capital, on the correct choice of niche, sales channels. If everything goes well, then in principle a novice entrepreneur can achieve a marginality of over 20%, which is considered a fairly good indicator today. But how to implement all this and where to start in principle?

We will pay attention to starting a business on reselling goods in today's review. Let's talk about how this scheme works in general and where to look for the appropriate products. Let's look at the categories of goods that are currently in stable demand on the market. This means that you will always have demand for them. We will pay special attention to what channels can be used to resell products. We will tell you how to check the product before buying in order to minimize potential risks. We will highlight a number of other points that you will need to implement before starting a business. We will consider potential risks in detail and tell you how to minimize them. The information provided will allow you to assess the prospects of starting a business on the resale of goods and finally decide on the advisability of such for yourself.

What is the resale of goods?

Resale of goods is one of the classic business formats that has existed on the market for quite a long time, but today it does not lose its relevance. In parallel with the active development of online sales, a large number of specialized platforms for the sale of products appeared, this area received a new round of development. Not only individuals, but also fairly large companies work in this niche. Logistics companies have quickly adapted to such trends, providing goods delivery services for online stores and more. And the audience itself is betting on online shopping, having appreciated the convenience and advantages of such a solution. That is, today in this market niche there are all the opportunities for stable and effective work.

The essence of the resale scheme itself is quite simple: buy cheaper and sell more expensive. This business is characterized by a low entry threshold, but still, without a certain start-up capital and detailed development before launching, you can’t do without it. First of all, you need to understand what you would like to trade. You can’t thoughtlessly buy the first batch of products, and then think about how to sell them. That is, it is important to think over a strategy before entering the market, to assess the current prospects on it, the potential for development. You also need to understand who your target audience will be, what level of sales you can regularly carry out. It is also important to navigate your closest competitors.

The next step is to monitor the market to find the products you need at the lowest cost. Here, the main focus should be on wholesale purchases, sales of leftovers with big discounts. Often, manufacturers or larger suppliers liquidate warehouses, offering a good discount on goods. At this stage, it is important to determine how much it will cost to purchase a batch, add here the costs of delivery and storage. Next, the market value, the activity of competitors are assessed, and distribution channels are selected.

Here it is important to understand that you need not only to recoup the invested funds, but also to make a profit, while allocating money for further development. Therefore, a markup is necessarily added. In most cases, the margin should be in the range of 20% to 30%. And only after all this preparatory work is completed, you can begin direct trading. The idea is to enter the market and launch an advertising campaign, attract an audience and finally get your first sales. But it is too early to relax, as you need to earn a good reputation and then maintain it. As a seller, good reviews are very important to you, because this is the key to attracting customers in the future.

That is, despite the fact that reselling goods is considered one of the easiest ways to start a business today, the work here is quite large-scale, complex, requiring a competent approach and professional solutions. Therefore, it would be a good idea to get acquainted with the specifics of such a business in more detail.

Finding goods for resale

We have already said that finding goods for resale at the most attractive prices is a great way to start a business. This is one of the key tasks that will face aspiring entrepreneurs. The overall success of the business, as well as the level of income, directly depends on the correctness and success of the implementation of this stage. So, here you can use the following options:

• Little-known or not represented on the network brands that are not interested in online retail. Today, there are a huge number of companies, including quite large ones, that just want to open their own sales offices - they work on wholesale orders. Also in this category, you can find a large number of aspiring manufacturers who cannot yet find distribution channels for themselves. Information about them can be found on specialized bulletin boards and even at offline fairs.
• Search for products at specialized auctions. This option is suitable for those who would like to sell not everyday goods, putting their business literally on stream, but for entrepreneurs who rely on collectibles, antiques and other unusual things that will definitely find their connoisseurs.
• Buying out leftover goods from large warehouses. Here we are talking about finding sellers who, for a number of objective reasons for them, are getting rid of a batch of goods. Perhaps these are manufacturers who are in the bankruptcy stage, those who decided to close their business altogether. There are quite a few options here.
• Wholesale suppliers of goods. We would like to draw attention to the fact that these can be both local and foreign manufacturers. Quite often, entrepreneurs choose products from China. A fairly wide range will be presented on such retail platforms as Aliexpress, Taobao, but still the prices here are quite high for resale. Therefore, it would be more appropriate to use local wholesale platforms, such as Alibaba, 1688, etc. Many people are also attracted by Vietnam marketplaces, as you can find quite good products at excellent prices here.
• Dropshipping. Involves purchasing a batch of goods for resale after you have buyers. That is, first you accept orders, and then order the product from the supplier. It turns out that in this case you simply act as an additional link.

It is still best to choose products that are well known to you, those that you have encountered in your everyday life and have learned to understand them well. So, if you are a coffee lover and are well versed in varieties, you know which producers you can buy really good products from, then bet on this direction. This means that you will be able to offer your customers quality coffee, which they will definitely appreciate. But, nevertheless, it is also important to take into account which products are currently in stable demand on the market. The secret to the success of any resale business is stable demand.

The best categories of goods for resale

If you choose products from the point of view of demand, then the best results here will be given by sales of non-food products in mass demand. They are always needed by consumers, but the competition in such niches will be at a fairly high level. You can also bet on an extremely popular category of goods. This is what will cause a massive stir in the market, but the problem is that it will be temporary.

Remember the children's soft toys-monsters Huggy-Waggy, which were extremely popular a few years ago, and today children have completely forgotten about them. The same fate awaited the so-called "tapo-paws", which about a year ago almost every child had. Now the Labubu keychains have caused a massive stir in the market. It is certainly not worth talking about what awaits these toys in the foreseeable future. Here you must understand that at any moment their popularity in the market will fade, and you will be left with a bunch of unsold goods in your warehouses, and without money. Therefore, entrepreneurs who are just starting to work in the market should clearly not use this category of products.

An excellent option for starting in the field of resale is these are products of mass demand, but such where you can choose your own unique product, thereby standing out from the competition. The following categories will be striking representatives here:

1. Electronics and accessories for them. The niche is quite wide and includes both fairly bulky goods, be it personal computers, office equipment, and laptops, smartphones, tablets. You can also bet on various products for a smart home, which are in fairly stable and high demand among consumers today. These can be various light bulbs, switches, specialized curtain rods. Alternatively, you can offer products from brands that have not yet gained mass popularity in your country. But in any case, the quality must be high, because otherwise you will not be able to gain a good reputation, which will automatically put an end to the development of your business in the future.
2. Household goods. Listing the products that can be presented in this category and will be in demand among consumers can be very, very long. These can be all kinds of trays, containers for food, spices, various organizers, dishes, furniture, textiles. So, if you analyze the statistics of Yandex Market, who over the past year, the sales level in the category "Decorative pillows" increased almost 9 times, in the category "Organizers for things" - more than 3 times, and in the niche "Tables and chairs" - 1.5 times. Moreover, there are so many different products in home goods that you can easily choose what your competitors do not have.
3. Clothing and footwear. Here you can bet directly on goods for women, for men, for children, or cover all categories of consumers at once. You can offer exclusively branded products or the most simple and unknown brands. But here the mandatory requirement for high quality is still relevant, because this is the only way you can gain authority in the market and ensure a stable flow of buyers and good reviews. It is very important to build a pricing policy correctly. So, if a buyer is interested in a T-shirt from Tommy Hilfiger, he may well pay $30 for it. But at the same time, it is completely unreasonable to sell a T-shirt for the same amount, which does not even have a brand.
4. Seasonal hits. Here, of course, you will need some experience, since it will be necessary to take into account seasonal fluctuations in demand, adapt your sales strategy to them. But then you can buy such goods at a good price during the off-season, and then sell them, making a good profit. So, the audience is little interested in sunglasses, beach umbrellas, inflatable rings in the fall or winter, but at the end of spring and in the summer such products will be the most popular.
5. Children's products. Along with clothes, these can also be toys, all kinds of accessories, items for arranging a children's room, for bathing, care. The main emphasis here should be on the environmental friendliness and quality of the products. Modern parents are very picky about what they buy for their children and they want to know that their purchase will not harm the baby. It is also necessary to take into account age characteristics, as well as current trends in the modern market. Various products for children, from strollers to bicycles, exercise bikes, and walkers, are also in consistently high demand in this niche.

We repeat that here it is best to make a choice in favor of those categories of goods in which you are well versed. This is the only way to select truly worthy products, which you can then easily sell, having received a lot of positive feedback from the audience.

A bit of statistical data

The selection that we provided above is based not only on, let's say, common sense, but also on statistics from leading marketplaces. So, if we talk directly about the leader in this niche, the Wildberries platform, then over the last reporting period, the leading positions in sales volumes were occupied by the following categories of goods:

1. Women's clothing with an indicator of 140 billion rubles.
2. Footwear with an indicator of 45 billion rubles.
3. Home goods with an indicator of 43 billion rubles.

Such trends are confirmed by other popular marketplaces. As an option, on Ozon over the same period of time, clothes, shoes and accessories were sold for about 45 billion rubles, electronics - for 25 billion rubles, and goods for the garden and home - for 10 billion rubles. slightly more than 20 billion rubles. On Yandex Market, household appliances occupy the leading positions with an indicator of 3.5 billion rubles, followed by electronics with figures of 2.3 billion rubles, and household goods with a value of about 1 billion rubles are in the top three. If you want to ensure that your products are in high demand among consumers, then you should focus on the most popular and widely sought-after products. Again, it will be great if you find something here that competitors do not offer. This is a kind of key to success.

Platforms for starting a business for the resale of goods

Now we have systematically approached such an issue as the choice of sales channels. This will also be one of the key elements of successful business development. In any case, you need a platform where you can post cards of your products, where you can launch advertisements, where you can inform the audience about promotional offers and even communicate with consumers. Now let's look at the most popular options that are great for starting a new resale business.

Marketplaces

Marketplaces are an extremely popular option for business development platforms, including those related to the resale of goods. Here, a budding entrepreneur will get access to a huge audience of buyers from any region of the country. But in most cases, you will have to pay a commission for using them, and a rather large one at that. On average, modern marketplaces charge up to 25% of the product price and assume that the seller will take on all logistics costs up to the pick-up point. But all your work related to launching a store will be optimized and significantly simplified. The marketplace offers a special product card designer, using which you can launch a store as such as quickly as possible. Also, such platforms provide many tools for promotion, there is an established system of payment and delivery of goods.

The choice of platforms themselves is quite wide today. If we talk about the Russian Federation, these can be platforms such as Wildberries, Ozon, the Russian representative office of AliExpress, Yandex Market. But still, you need to approach the choice of a suitable marketplace very carefully, study all partnership agreements, rules, take into account the audience that you will be targeting in sales. So, Wildberries sells clothes and shoes, children's goods best. Ozon is replete with all kinds of household goods, bags, wallets, backpacks. AliExpress has an abundance of all sorts of small items, as well as Chinese-made gadgets and much more. The sales leaders on Yandex Market today will be household appliances, auto parts, etc.

But keep in mind: the rules for working with marketplaces are constantly changing. As an option, the size of the commission is often revised, additional requirements are imposed on the packaging of goods, fines are added for non-compliance with certain requirements, etc. That is, in order to ensure stable work here, you will need to regularly monitor all current trends and respond to them as quickly as possible.

Social networks

Every entrepreneur, if desired, can literally create a business account or a group on social networks with just a few clicks and publish information about their business, as well as the products offered. The choice of platforms today is quite wide. As an option, these can be platforms such as Odnoklassniki, VKontakte, and with the use of additional tools, also Instagram, Facebook. Recently, the Telegram messenger has also become increasingly popular among business representatives. Today, you can create full-fledged stores here, provide their flexible and effective management through bots.

The most significant advantage of this solution will be the absence of payment and any other investments at the launch stage. The only exception: you decide to use the additional services of a designer to get a unique author's solution. The very same recruitment of an audience into the created groups can be carried out by exchanging reposts with other similar platforms, but if desired, you can also launch advertising. We would like to draw attention to the fact that by relying on social networks, you will receive not only a platform for sales, but also opportunities for direct communication with potential buyers, providing consultations literally in real time, and just active communication.

Creating your own online store

If you opt for your own online store, then in this case you will be completely independent of the whims of marketplaces, social networks and any other platforms. But still, this method will require a lot of time, effort to create a launch. That is, here you, on the one hand, get full control over the resource, you can set any prices, launch all sorts of promotions, add some sections and delete others. But on the other hand, you also take full responsibility for all risks and material costs.

But, to tell the truth, the process of launching the simplest online store is not as complicated as it might seem at first glance. So, today there are a huge number of special designers and quite functional content management systems that significantly simplify and speed up the launch of such a project. You can take any of the template solutions as a basis, and then make certain adjustments to it, adjusting it to the specifics of your products or individual preferences. In addition, it will cost very little, since you will not have to involve developers and a number of other specialists.

Alternatively, you can create a simple online store using technical solutions such as Tilda, Craftum, InSales and a number of similar ones. The platforms themselves have a fairly simple and intuitive interface, as well as a set of instructions and even educational video tutorials. If you opt for a paid plan, you will get even more options for designing, launching blogs, personalization and even SEO promotion.

Bulletin Boards

Bulletin boards are specialized platforms where you can post ads for the sale of a particular product. If we talk specifically about the Russian Federation, the most popular platform here is Avito. It is followed by Yula and Farpost. Business representatives will be able to create absolutely any product cards here, even without any strict requirements. Also, there is no need to conduct a transaction through the financial system of the platform. In some cases, even payment for goods in cash is allowed. But there is also the possibility of a bank transfer or using internal services. If we talk about Avito, the platform has its own delivery service. This is very convenient for buyers, but sellers will have to pay an additional 9% commission.

We would like to draw your attention to the fact that in most cases, the use of such bulletin boards for business will also require the purchase of a special account. Most of these platforms only allow you to sell used items for free. Consider whether this sales channel option is suitable for your future business, and in the meantime, get acquainted with other options.

Personal offline point of sale

Opening your own offline point of sale is a kind of classic. Here we are talking about the fact that you will resell products in your own or rented premises. In comparison with other methods that we talked about above, this one will require maximum investment, which is typical for absolutely any offline sale compared to online trading. In addition, you will need a salesperson working on a schedule, or even several. But this way the audience will be able to get to know your products in as much detail as possible, literally touch them and buy them right away, without waiting for delivery.

Most offline points of sale are launched together with other online solutions, which significantly increases the efficiency of the business. You can also combine online sales, as an option to simultaneously launch your own online store, add product cards to message boards, and create a profile on social networks. Yes, in this case you will have to put more effort and time into launching each channel and subsequent monitoring of its efficiency, but this is the easiest and most effective way to scale sales.

Checking a product for resale before buying

We have already talked more than once in today's review about the fact that the quality of the product is a key component of its effective and stable sale on the market, receiving good reviews from the audience and promoting the business as a whole. Therefore, it is in your interests to purchase products that will not gather dust in warehouses, but will sell like hot cakes. Even if you have already decided on the niche in which you will work, it is still important to correctly select the product itself. You need to bet on all solutions that are in demand on the market. To understand this, you need to collect information from available sources and analyze it, in particular:

• Study user opinions about a particular product on the Internet. These can be relevant discussions on forums, social networks, small reviews. If a specific product is actively discussed, this will indicate its high demand and that you will be able to sell it. But with a high degree of probability, the competition here will be quite high.
• Pay attention to the number of search queries. Specialized services, such as Yandex Wordstat, Google Trends, will help to significantly simplify the collection of this information. This way you can understand how often a certain product was searched for by people over a specific period of time. It is advisable to ask the most clear and precise query in order to get a relevant answer for it. On average, you should focus on an indicator of 400-500 queries per month. Higher numbers will immediately indicate extremely high competition, in which you, as a novice entrepreneur, are unlikely to survive. But it is also clearly not worth buying for resale a product that 10 people were interested in in a month, because the demand for it is very low.
• Study product reviews and sales figures of your closest competitors. Here you can also use specialized analytics tools. Based on the figures you receive, you will be able to understand whether it is worth betting on this model or whether it is better to look for something else.
• Pay attention to the feedback directly about wholesalers. Most platforms through which wholesale purchases are made allow you to leave feedback both about the products and about the suppliers themselves. With a high degree of probability, you will find the opinion of other business representatives about the quality of the product, its popularity among consumers, and even about the responsibility of the seller.
• Make a test purchase. We are talking about a small batch of goods, literally up to 10 units. Perhaps you will have to overpay a little for it, but you risk less money if the product turns out to be of low quality and the audience does not like it. That is, take a small amount of goods, try to sell it, wait for feedback from consumers and only then make decisions about subsequent cooperation with this seller.

Adhering to these rules, you will be able to choose the right product for yourself and start sales with minimal risks.

What else needs to be implemented for the final launch of the business?

Determining a niche for starting a business, sales channels and the product itself is only part of the work that you will have to implement in practice. It is also very important to prepare legally for the launch of such work, and also think about attracting buyers. It is also important to find a place where your product will be stored, provide channels for its delivery. To begin with, in principle, you can use regular transport services and allocate a small space at home, but as the business develops, all this will need to be scaled up. You will have to provide your own warehouse, and also think through the logistics to the smallest detail.

But now we will dwell on the issues of business registration and attracting an audience in more detail.

Nuances of business registration

Both an individual entrepreneur and an LLC can start their own business reselling goods. In any case, without official registration and payment of all necessary taxes, you will not be able to work in the market. But here you can choose the most suitable scheme for yourself:

1. “Income” - USN 6%. This is a simplified taxation scheme that can be used by all those who cannot confirm their expenses or their amount is more than 60% of the revenue received.
2. “Income minus expenses” - Simplified tax system 15%. Special tax regime for individual entrepreneurs, legal entities in case of payment of 15% tax on the difference between income and expenses. That is, you must confirm that your expenses are higher than 60-65% of income.

Self-employed persons cannot open such a business. The only exception here is the sale of goods produced independently. In most cases, resale businesses are opened by individual entrepreneurs, since the creation of an LLC is a long and rather complicated process, which is mainly undergone by large organizations.

Launching an advertising campaign

Advertising is, although costly, a truly effective and working way to attract potential buyers to your business. Here you will have several possible options at your disposal:

1. Mutual advertising. Involves working with other business representatives in related topics. Alternatively, an online store of children's goods can be advertised on social networks of a site dedicated to the sale of clothes for pregnant women. It does not require material investments.
2. Contextual advertising. It involves displaying ads in search results in response to a user request.
3. Targeted advertising. It involves precise settings by geolocation, gender, age, interests and other individual characteristics. It will be displayed only to those people who meet the parameters you set.
4. Advertising with bloggers. It gives good results, as it is aimed at loyal subscribers. To implement such an idea, you need to find a blogger working in your niche and agree with him on advertising products for a fee or directly for the product itself.
5. Promotion through search engines. It is mainly used by online stores, but the process is quite lengthy. It can take at least six months for your site to be at the top of the search results. It will also require a lot of money for implementation.

If you choose to work through marketplaces, then in principle you can use their built-in advertising tools. Also, at the start of work, it would be useful to occasionally go to fairs with your products, resort to street advertising, distribute flyers with promotional offers and do everything that can attract the attention of the audience to your products, interest them and facilitate subsequent order placement.

Risks of a business on the resale of goods

Like any other business, the resale of goods is associated with a number of risks, and some of them can be really critical and lead to complete collapse. To minimize this likelihood, it is important to know about all the dangers and understand how you can get around them or at least reduce the negative impact. Here are the main points:

• Loss of funds at the start of sales. The problem here is high risks. You won't be able to completely eliminate this, but if you think about every step, weigh all the pros and cons, you will be able to minimize mistakes. The main thing is not to reduce costs at the expense of product quality. Also, you shouldn't immediately invest all the money you have in your business. You should always have a small reserve for unforeseen circumstances.
• Low quality goods, counterfeits. Products that are beautifully described are not always like that in reality. This is especially true if you are ordering from China. Therefore, it is important to carefully check the sellers' documents, study their reviews and similar products from their closest competitors.
• Illiquid products hanging in the warehouse. This includes all products that were not interesting to buyers, those with defects. You can minimize this by making a test purchase of no more than 10 units.
• High competition in the market. We have already said that the more popular the product for resale you choose, the more companies will trade it. You must understand that you will have to compete with a business that has been on the market longer than you, has its own base of regular customers, and established advertising channels. You can only survive in all this with the help of a truly high-quality product, a competent approach to customer service, and professional design of product cards. Let us remind you that a good option is to choose a unique product in a popular niche. In this case, the level of competition will be significantly lower.
• Logistics problems, returns. How the product will reach the recipient, whether he will pick it up - these are things that you, as a seller, have practically no influence on. Delays in delivery are possible, and it is not at all possible to foresee the buyer's reaction. In this case, you can minimize your own risks by choosing a reliable transport company, as well as preliminary communication with potential clients to understand their level of responsibility and make sure they are really ready to pick up the goods.

Summing up

A business on reselling goods has every chance of success, though with the most professional and comprehensive approach. It can be used by novice entrepreneurs with a fairly limited budget. But you can’t do without investing effort and time here. It is necessary to draw up a consistent action plan and implement it step by step, avoiding chaotic purchases of products at random.

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