It seems simple: You buy products at low prices; you resell those products at a profit. Unfortunately, having a successful reselling business is more complicated than acting as a price-inflating middle man. As with any new business venture, reselling takes copious amounts of research before you can make your first purchase from a supplier. Here are some valuable lessons to guide you as you start a reselling business with a hope for success.

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Understand Your Product

No reseller peddles everything. The reason for this is plain: No salesperson can come close to being an expert on every product under the sun, so customers rarely trust businesses that offer an all-embracing stock. Ideally, your reselling business will focus its efforts on marketing a single valuable product, or at least a specific industry, like technology or health and beauty. Then, you should work to thoroughly understand your product(s), memorizing its details like you will be tested ? because you will be.

Understand Your Product’s Market 

Just as you cannot sell everything, you will not be able to sell to everyone. Before you accumulate products to resell, you should have a handle on your target market. Through research, you should have concrete answers to the following questions:

  • What demographics make up your audience?
  • How does your audience think and behave?
  • What does your audience want?
  • What challenges does your audience have?
  • How does your product help your audience?
  • What drives your audience to make purchases?
  • What media does your audience use most frequently?

Often, you can use secondary research published online to use in pursuit of these answers, but you may also wish to complete your own market research for more personalized results. Armed with this information about your customers, you will have more success in marketing and selling your products.

Understand Your Suppliers

Few manufacturers actually sell their products themselves, which means it won’t be particularly difficult to find a supplier for your reselling business. However, finding the right supplier takes time, energy, and more research. There are several qualities that compose a good supplier: high-quality goods, fair prices, availability, dependability, and good customer service are but a few.

It is also beneficial to have a distributor that offers services on top of providing products. For communications resellers, working with KBZ will net them Cisco products, as well as sales, training, and marketing programs to ensure they fully understand the products and how best to sell and market them.

Understand Your Partners 

Some reselling industries require not only suppliers and customers but partners that facilitate the sale of products. Of course, you should avoid jumping head-first into any partnership. Though you may need a partner to succeed, it is still crucial that you thoroughly read the partnership agreements to ensure your partner doesn’t take more than it is due.

When selecting a partner, it’s good to understand how close they are to you as this could help reduce shipping costs and speed up how quickly you can provide products to your clients. Also, you want a supplier you feel confident communicating with, so when your customers’ needs change, you can ask your distributor to change without fear.

 Understand Your Competitors 

The less competition you have, the more you stand to profit. However, it is highly unlikely that you will find a lucrative reselling industry that does not already have at least one or two competitors. Sometimes, suppliers will limit the number of resellers in a particular region to prevent price wars that cause profits to plummet. Thus, it is essential that you get to know your competition before you begin. Most importantly, you must investigate your competitor’s prices and marketing methods. Then, you can set your own reselling company apart with better products, better prices, and a distinctive business identity.

Understand Common Mistakes

Even after all this research, you will probably make a few blunders during the first few months of operation. Fortunately, you can avoid the worst (and most common) by learning from other resellers’ mistakes.

  • Not adding value. Value-added resellers (VARs) are some of the most sought-after companies in the business. If you can find a way to enhance your product ? perhaps by bundling it with other useful products or services ? clients will come to you.
  • Improperly calculating price. Prices that are too low prevent you (and your suppliers) from earning profit, while prices that are too high will drive your audience away. The process of pricing is delicate but crucial to your business’s survival.
  • Failing to understand. It might seem that reselling doesn’t require the ingenuity of regular business, but reselling is work just like anything else. Once you put in the research, you have a much better shot at succeeding, so you should put off opening your doors until you truly understand what reselling is about.