The resale business model offers almost unlimited opportunities for all kinds of entrepreneurs, whether beginner or experienced. Apart from being easier than selling your products, a reselling business comes with a lower risk level since you can start selling another product when the sales for one product begins to decline.
If you are planning to start a reselling business but have limited cash to work with, here are the best strategies that can help you maintain good cash flow:
Find the right products
First things first, you have to select the right products you want to resell. Whether it’s something small like a sun stick or bigger-ticket items like electronics, you have to make sure that it’s something that you can actually sell and if there even is a demand for it.
Similar to selling your own products, researching the market is essential before you start reselling. Gauge the demand for the products that you want to resell and from there, determine if they will make a worthy investment. Otherwise, you might find yourself with an inventory that you can barely sell, which essentially means trouble if you already have limited cash to begin with.
Choose the right company
After you determine what kind of products you want to resell, it’s time to find the right company to work with. Ideally, you would like to work with a company that offers the products you want at low wholesale prices. At the same time, they should be able to respond to your orders and requests promptly, lest they cause delays for your transactions.
Finding the right sources of your products is one of the biggest challenges in starting an online business, especially if your capital leaves you with little room to move around. Shop around for companies that can offer you wholesale prices that best fit your budget. If you can carry only a small inventory, find sources that provide low MOQs (minimum order quantity) to start with.
Resell a wide variety of products
Don’t carry a large amount of the same product. Instead, have a wide variety of different products to resell. Doing this can help your cash flow remain consistent, especially if you want to resell seasonal products.
For example, if you resell mainly shoes, consider expanding your selection to hats, bags, jewelry, and other accessories. In this way, if your shoes aren’t selling, you still have revenue from your other products. Moreover, having a wide variety of goods helps you reach more customers, particularly those who want a one-stop-shop for their shopping needs.
If you are limited to a small capital, start your reselling business with only a small amount of inventory at first. The profit you gain from the first few weeks of business can then be used to invest in more products and a bigger inventory.
Don’t hold inventory
Alternatively, you can consider holding no inventory at all. Instead, you can serve as a middleman for businesses that offer dropshipping. In this way, you don’t have to pay for the goods until a customer has ordered them, making it easier to resell for entrepreneurs who have a limited budget.
If the funds that you have now are not enough to gain traction in the reselling business, it might be better to put your plans on the back burner for now. In the meantime, you can gather more money for your business by saving your salary from your day job, taking up freelancing jobs, and maybe even applying for a small business loan.
Once you’ve started your reselling business, it’s wise to keep your expenses as low as possible, at least for the first few months. Apart from the cost of the goods itself, try to keep shipping, marketing, packaging, and overhead expenses lean to maintain adequate cash flow.
Remember that you might not sell everything that you’ve bought, so don’t spend too much money lest you start running low in case the sales drop.
Having a reselling business is much like running a regular business, only that you have less risk and possibly higher profit margins. Moreover, a reselling business is easier to start, even if you can only make a small initial investment.
However, a reselling business is not immune to cash flow problems. But with these strategies, you can keep your business running smoothly despite having a small fund to work with.
Do you have reseller success stories to share? Please leave them in the comments below for our fellow entrepreneurs to see.