If you're thinking of starting a resale business, there's never been a better time. According to ThredUp, the resale market is expected to grow 11 times faster than the broader retail market in the next several years, with more new sellers — and buyers — joining the market each year. Whether you're thinking about how to start an online thrift store, how to become an antique dealer or just looking for a way to turn your hobby into income, the time to try is now.
1. What’s a Resale Business?
The term "resale business" is a pretty broad one, encompassing everything from selling your unwanted belongings at a thrift shop to setting up a retail shop where you can sell items bought from a wholesaler. Whether you're selling thrifted finds from local stores, vintage clothing or craft supplies from your favorite brands, starting a successful resale business involves some common strategies and steps.
Starting a Resale Business
If all you really want to do is sell a few pieces of your wardrobe or find a home for your grandmother's dining room set, check our blog posts about selling your belongings on eBay, Facebook Marketplace and Craigslist. If, on the other hand, your intent is to turn your hobby or side hustle into an ongoing income stream, this article is for you. From figuring out what you should sell to keeping your business and personal life separate, these tips cover the basics.
2. Find Your Niche
While you can run a profitable thrift store that doesn't specialize in any particular area, you'll face a lot less competition if you narrow your focus. There are two ways to go about this: specialize in something you love or research the most profitable niches and choose one of those. There are benefits and drawbacks to each method, but if you focus on something you already know very well, you'll avoid the mistake made by entrepreneurs like these, who managed to offend nearly the entire knitting community because they dived headlong into an area they didn't know well.
On the other hand, it definitely helps to have an idea of what types of products sell well, especially if you're starting from scratch and your primary goal is to supplement — or replace — your household income. Here's a list of 10 very popular niches you might consider in starting a resale business.
Top 10 Types of Resale Businesses
- Technology (including laptops, tablets, phones and televisions)
- Clothing (especially vintage and name brand designers)
- Furniture and homewares
- Toys and baby items
- Health and fitness equipment
- Sneakers (especially designer kicks)
- Craft supplies and equipment
- Jewelry (especially watches)
- Personalized Items
3. Check Your State and Local Laws
Save yourself a lot of headaches by checking with your local state and municipal officials to find out what you need to operate as a business in your city or town. Depending on location, you may need to file with your city as well as with the state, and you may need a mixture of licenses and permits in order to do business legally. If you need help with this — and most people do — contact the local office of the Small Business Administration for help and advice.
4. Set Up Payment and Banking Options
Decide how you'll accept payments and register for the accounts you'll need in order to make and accept them. It's generally a good idea to open a separate bank account for your business as it will make it easier for you to track your expenses and income. Shop around your local banks and credit unions — credit unions in particular may offer benefits and services you won't get from larger national banks.
Most ecommerce experts also recommend that you create a business PayPal account, which will make it easy for you to accept credit and debit card payments. Don't stop there, though. Whether you decide to sell at a physical location, such as a flea market or craft fairs, or keep your sales strictly online, do a little research to find out which payment options your target customers prefer. Venmo and Cash App, for example, are particularly popular among millennials and younger folks, while Zelle is growing more popular for small businesses that do a lot of business-to-business transactions. Other options include Apple Pay and Google Pay, both of which make it easy for customers to pay at point of sale or online.
5. Set Up a Good Bookkeeping Process
Just a little more business bookkeeping before we get to the more fun stuff. Keeping meticulous records may be the single most important thing you can do as a new business owner, and that's even more important if you're starting a resale business where you source inventory from thrift shops, estate sales and online sales platforms. You can set up your own accounting ledgers on Google Sheets or in Excel, but actual accounting software, like QuickBooks, can eliminate a lot of extra work and minimize mistakes. It may seem like a lot of extra work to enter everything you spend and take in, but it will become second nature quickly, and you'll be glad you did it when it's time to figure out your profit and loss.
6. Choose a Selling Platform
This is where things start to be fun. The combination of the growing trend toward minimalism and the desire to make a little extra cash with your side hustle has led to a veritable explosion of online spaces where you can sell your goods. While eBay, Craigslist and Amazon are the big boys on the block, they're just the tip of the iceberg. Nowadays, you can list new and secondhand items on apps and websites like Poshmark, Depop, OfferUp, Decluttr, Etsy and Facebook Marketplace, just to name a few. So how do you decide which ones to choose? These are a few of the considerations:
- How well do they work for your items?
- What’s the fee structure like?
- Does it reach the market you need?
- How hard is it to get set up?
- What kind of support do you get?
Each of these marketplaces tends to work best for different types of merchandise, so do a little research to see where your niche works best. This list isn't exhaustive, by any means, but here are a few tips and pointers.
Poshmark says "fashion, home decor, beauty and more," but the focus is really on brand name pre-worn fashion. This is the place to sell your gently used J. Crew, Lululemon and Nike clothing. Their fee structure is subject to change, but as of this writing, they have no listing fee, and you pay $2.95 for sales under $15, and 20% for larger sales.
DePop is a lot like Poshmark in theory, but it's cooler, younger, and hipper. While you'll find it's a great place to sell pre-worn fashion, they've positioned themselves as the place to discover cool, new, indie designers. If you're upcycling clothing, this might be the right marketplace for your creativity. Getting set up to sell on DePop is easy, and you only pay a fee if your items actually sell — a flat 10% of your sale.
Etsy is the place for all those who love crafty, vintage and handmade goods. Their inventory goes far deeper than clothing. It's a great marketplace for vintage jewelry, handcrafted accessories, and — surprise — crafting supplies. If you make or resell things that other crafters need, such as custom boxes, cool knitting gear or personalized clothing and housewares, Etsy has a niche for you.
Facebook Marketplace launched in 2016 and quickly became a big name player for folks who wanted to sell big, hard-to-ship items like furniture and household goods. It's also a good market for used cars, and, believe it or not, plants and seedlings. If your pandemic hobby filled your house with baby cacti and spider plant babies, this is a great place to connect with locals who want to add some greenery to their environment. Facebook Marketplace has no listing fees, and only charges you a fee if your buyer uses the Marketplace checkout to pay.
eBay is still the number one place to sell electronics, household goods and collectibles of all kinds, including kids' toys. They've had a couple of decades to figure out how to cater to niche markets, and they do it well. eBay's fee structure is complicated, so your best bet is to check their support pages.
There are many, many more places to consider when setting up your resale business — and this list doesn't even include brick-and-mortar options, such as your own store or local flea markets and craft fairs. No matter what, the more carefully you do your research, the more likely it is that you'll find a good match between your inventory and your target customers.
7. Set Up Storage and Inventory Space
One of the biggest barriers you'll face when you decide to take your thrifting hobby to the next level is where to put all that stuff. Even small items, like jewelry and watches, can quickly overwhelm your living space if you don't plan for it — and if you're dealing in bigger items, like selling vintage furniture, storing even one or two pieces can crowd your den or home office. SmartStop’s self-storage units offer you a smart, scalable way to handle inventory overflow when you're starting a resale business. Our month-to-month, no-contract rental fees mean you only pay for storage when you need it — and it's easy to expand in the busy months when you're collecting inventory before selling. Check out the many amenities and types of storage space we offer to make it easier to run your business.
The most important thing to keep in mind when starting a resale business — especially if it's one that grows from a hobby — is that it is a business. Do your market research, find good sources, keep meticulous records, and get organized before you get started, and you'll be off to a successful new business launch.