I didn’t know a lot about reselling before I actually started doing it. In fact, I sort of just stumbled in to it. You can read about that story here: https://lifeaslovely.home.blog/2019/03/02/why-i-started-reselling/
I feel like I’m always learning something new and regularly look for ways to improve my business. But when reflecting back, there are some pretty crucial things I only WISH I would have known before I started. Read on to avoid these common pitfalls!
- Source Smart
I started reselling stuff that I already had. But when I ran out of items in my home and closet I ventured out to find new places to find inventory. One of the biggest lessons learned for me is to Source Smart. I know, that can mean a lot of things. But for me the two biggies are: Avoiding Brand Shock & Understanding how to Check Comps!
Brand Shock is a term I like to use to explain that feeling that rushes through your body when you find a brand that is just well, AMAZING! Usually this happens if I find a brand that’s on my thrifting bucket list or that I know will resell for a good return. But it’s so so so important to not get blinded by the tag. Take a second to thoroughly check out the item before swiping your card. Is it a good style? Style is just as important as the brand! Don’t get me wrong, there is a buyer for everything – I honestly believe that. BUT (and that’s a big BUT) I like to source things that are going to move quickly. If it’s an older style or it’s just ugly, I don’t want it hanging out in my Inventory Bins taking up space for months on end. I try to find trendy pieces that I know are in demand and that I can move from my mannequin to my buyer’s closet – stat!
Another important tip is to understand how to check comps. Comps are a comparative look at what similar items are have sold for recently. Keyword being: SOLD. When you’re checking the value of an item, don’t just look to see what people are listing for. I can take a pack of pencils and list them on eBay for $400, that doesn’t mean someone is actually going to buy them for that price. When you search SOLD comps, you can see what people have actually paid for the items. After all, it’s not really about what the item is worth, it’s what the buyer is willing to pay!
2. Understand your Bottom Line!
Often times when I’m sharing my thrift hauls on my Instagram, (follow me here!: https://www.instagram.com/_lovelyfinds/) I’ll mention when I have paid up for an item. This means that I a paid more than what I would typically spend per item in order to purchase the piece. Sometimes it can make sense to pay more when you are confident in the return you are going to get. However, all of that is completely pointless if you don’t understand your bottom line. You have to know what your costs are in order to determine how much you are willing to spend on any one item.
How much does it cost to package your item? Are you paying for shipping? Does the platform you are selling on charge you any fees? Are there any repairs/cleaning that the item will require in order for you to sell it? What about your time? How much do you need to be paid for your time sourcing, prepping, listing and storing the item? Know that number. That number can help you determine how much you need to profit on each item and will help you decide what you’re willing to spend when you are out sourcing.
3. You Don’t Have to Pay for Packaging
I used an old Citizen Watch box to pack my first sale. Then, I bought boxes from Walmart. Never, ever, ever, ever again! You can pick up boxes for free to ship your items from the Post Office. You can also order them online and have them delivered to your house. You can do that here: https://bit.ly/2BDr8gs
I like to purchase printed poly bags to ship my items to give it a little something extra. But this is absolutely not required and definitely not needed when you are just starting out.
4. Create a Solid Inventory System
I. Hate. Losing. Inventory. The WORST feeling ever. My inventory system was joke in the beginning. I had an area in my living room where I kept all my items. Then, I took over a coat closet. Then, I had some weird combination of boxes, my closet and the living room – it was taking over my house. Then I learned about bins. I organized them by the type of item: Bright dresses, Dark dresses, pants, etc. This got frustrating because I would start running out of space in one bin but I couldn’t move it to another because it didn’t match the bin description. So I scrapped that. Now days I have numbered bins with each individual item assigned to a bin number. It’s so easy to manage and has saved me a tremendous amount of time – and money from not losing sales from lost products! Not saying this is the only way to go – but it’s really important to have a fool proof system in place as you start added to your inventory.
5. Look for Sourcing Opportunities Everywhere
Tell people what you do, this could potentially turn in to a consignment opportunity. Try thrift stores, a lot of them. Do some retail arbitrage. I’m a big fan of keeping my options open and I like to diversify whenever I can. This helps give your business some insurance. An example – I used to source at the same thrift store all the time. They eventually went under new management and their prices skyrocketed. It became few and far in between that I was able to source quality items for a good price. So I moved on. Having other options allowed me to quickly have a back up plan in place without any down time or lost sourcing opportunities.
There you have it, 5 things that I know now but definitely wish I would have known when I got started. What have you learned from your reselling journey?
Find me on Instagram and tell me about it! @_lovelyfinds
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