Essential Steps to Start and Grow Your Reseller Business

Understanding the reseller business model

Before we discuss the specifics of starting your reseller business, it's important to help you understand the different reseller models you can choose from for your online resale business.

Here are a few different types of profitable reselling business ideas:

• Dropshipping: With the dropshipping business model, you sell products without inventory. Customers place an order from your e-commerce site, and you purchase the item from a third party. The third party then ships the product directly to your customer.
• Wholesale: With this profitable business model, you buy products in bulk or at a discounted rate and resell them. The key here is reselling them at a higher price point to make a profit.
• Retail arbitrage: This is one of the most popular options because it's easy. In this business model, you buy products from stores at a discount and resell them on platforms like Amazon or eBay for a profit.
• Private labeling: With the private labeling reselling business model, you source generic products from manufacturers and sell them under your brand name.

Each model has pros and cons, but each can be profitable.

Pros of starting a reseller business include:

• Low startup costs compared to manufacturing your products
• Flexibility in choosing products and niches
• Potential for rapid scaling
• No need for product development or manufacturing expertise

Keep in mind, however, that there are drawbacks to starting a reseller business, such as:

• Intense competition in popular niches
• Potential for low profit margins, especially in saturated markets
• Dependence on suppliers for product quality and availability
• Limited control over product development and branding (except in private labeling)

Your chosen niche will influence the profitability and success of your reseller business. Here are some tips for researching and selecting a profitable niche for your online store:

• Follow your passions: Consider products you're genuinely interested in or have expertise in.
• Analyze market trends: Look for growing industries or product categories.
• Assess competition: Look for niches with moderate competition; too little might indicate a lack of demand, while too much can make it hard to stand out.
• Evaluate profit potential: Consider product costs, selling prices, and potential sales volume.

Make sure you analyze the market to make sure there is one for the products you plan to sell and to help you understand what your competition looks like. A few tools you can use for market analysis include:

• Google Trends: For analyzing search interest over time
• Amazon Best Sellers: To identify popular products in different categories
• Social media listening tools: To gauge consumer interest and sentiment

Finding reliable suppliers

Selecting the right suppliers can also impact the success of your business because they influence the quality of the items you sell through your online business. Consider the following criteria when choosing your suppliers:

• Product quality: Ensure the products meet your standards and customer expectations.
• Pricing: Make sure to balance pricing with product quality. Compare prices from different wholesale or supplier companies to get the best rates.
• Minimum order quantities: Ensure the supplier's MOQs align with your business model and budget.
• Return and warranty policies: Understand the supplier's policies for defective or damaged products.

Wondering how to find suppliers? A few platforms can help, but you can also purchase products anywhere to resell online. Your strategy will largely depend on your reseller business idea and how much time you want to put into it. A few ideas for where to source products for your reselling business are:

• Alibaba: Alibaba is a global marketplace for finding manufacturers and wholesalers. This platform offers a range of products at competitive prices for bulk orders.
• AliExpress: This option is suitable for dropshipping and smaller orders, allowing you to start with lower investment and test products before scaling up.
• Local trade shows and wholesale markets: These provide opportunities to see products in person, network with suppliers, and discover unique items not available online.
• Industry-specific supplier directories: Directories offer curated lists of suppliers specializing in particular niches, helping you find high-quality products relevant to your market.
• Thrift stores: These stores are great places to find unique, vintage, or second-hand items at low prices, perfect for resellers focusing on sustainable or retro markets.
• Garage and estate sales: These local sales offer opportunities to purchase high-quality, often unique items in bulk at discounted prices, ideal for resellers looking for premium or antique products.

Building strong relationships with suppliers can support the long-term success of your e-commerce business. Communicate clearly, pay on time, and be professional in any and all interactions. As your business grows, you may be able to negotiate better terms and pricing with your most trusted suppliers.

Before selling anything online, you need to set up your business properly for legal and tax purposes. Here's how to start:

• Choose a business structure: Common business structures include sole proprietorship, limited liability company (LLC), or various types of corporations. Each option has different legal and tax implications, so consult a legal professional or accountant to determine the best choice.
• Register your business: Get any licenses and permits your local and state governments require. Licenses you need may include a business license, a sales tax permit so that your customers can pay sales tax or industry-specific licenses.
• Set up business banking: It's always a good idea to open a separate business bank account. This account will keep your personal and business finances separate.
• Craft a comprehensive business roadmap: Document your company's vision, including specific objectives, ideal customer profiles, revenue forecasts, and promotional tactics.
• Consider insurance: Depending on your business model, you may need general liability insurance or product liability insurance.

Creating an online presence

Your potential customers need to be able to find your business and its products online. Here's how to create an online presence that attracts customers:

• Make a professional website: Create a user-friendly, mobile-responsive website that showcases your products and brand. Consider using e-commerce platforms like Mailchimp to simplify the process.
• Display your products: Invest in high-quality product photography and write compelling, informative product descriptions. The better your descriptions, the more you'll encourage potential customers to take action.
• Make finding products easy: Ensure customers can easily find what they're looking for on your site with easy navigation and search functionality.
• Have a secure checkout process: Implement SSL encryption and offer multiple payment options to build customer trust.
• Establish a social media presence: Build a following on social media by maintaining active profiles on the platforms your audience spends its time.
• Create valuable content: Start a blog, YouTube channel, or social media account to share content related to your niche. This strategy can establish your expertise and attract potential customers.

An effective marketing strategy attracts and retains customers to help you grow your reseller business. Consider the following growth marketing strategies:

• Search engine optimization (SEO): Enhance your website's visibility by adding keywords throughout your site content and product descriptions. This approach helps your pages rank higher in search results, helping your customers find you online.
• Content marketing: Develop and share high-quality, engaging content that resonates with your target market. Produce articles, videos, or infographics that solve your audience's problems or offer valuable insights related to your products, establishing your brand as a trusted resource in your niche.
• Social media marketing: Engage your followers on social platforms, share product updates, and run targeted advertising campaigns.
• Email marketing: Build an email list, nurture customer relationships, share promotions, and drive repeat sales. This effective lead generation strategy gives you a direct line to your customers.
• Customer reviews and testimonials: Encourage customers to leave reviews and showcase them whenever possible on your website and social media. Implement feedback loops to gather customer insights and continuously improve your products and services.

In addition to these strategies, make sure you have strong branding to support your marketing efforts. Develop a unique identity for your business, including a memorable logo, consistent visual style, and brand voice.

Measuring success and scaling your business

To ensure your reseller business is on the right track, it's important to track key performance indicators (KPIs) and implement product growth strategies. Some important KPIs to monitor include:

• Sales revenue
• Profit margins
• Customer acquisition cost
• Customer lifetime value
• Website traffic and conversion rates
• Average order value
• Inventory turnover rate

As your business grows, consider the following strategies for scaling:

• Expand your product line: Add complementary products or enter related niches.
• Explore new sales channels: Consider selling on multiple platforms (e.g., your website, Amazon, eBay) to reach a wider audience.
• Automate processes: Implement tools for inventory management, order fulfillment, and customer service to improve efficiency.
• Hire help: Free up your time by hiring employees or outsourcing tasks.

Continuous learning and adaptation promote long-term success in the reseller business. Regularly review and celebrate your business milestones to stay motivated and track your brand's success.

Tips for a successful reseller business

The success of your reseller business depends on the decisions you make at every stage, from selecting your niche and suppliers to developing your online presence and marketing strategies. Stay agile and be prepared to adapt your approach as you learn more about your market and customers.

As you build your e-commerce business, use tools to streamline your operations and marketing efforts. Mailchimp offers a suite of marketing tools for reseller businesses, including email marketing, automation, and analytics. Our marketing suite allows you to focus more on growing your business and less on managing marketing minutiae.