Planning your business
Whether you will be selling small quantities or large quantities you will want to have business plan. Unless you are going to just try selling as a hobby, sit down and write down a plan that is doable with goals that are attainable so that you are prepared. Just remember if you do good planning at the beginning of any business it will help you not run into as many problems in the future. Some things that you will want to include will be listed below.
*Name for your business
*manner in which you will conduct business
*merchandise you will be selling such as tools, home electronics, housewares, small electronics, toys, outdoor, furniture and many more categories to choose from. You may want to pick items that are not being sold by everyone in the area that you choose to sell.
*How and to whom will you be selling (swap meets, on line, local or mail, garage sales) make sure that you include the cost specially if you will be shipping your merchandise to the end user.
*Check to see what type of licensing if any may be required in your area. Some areas do not allow garage sales every week and not all neighbors are ok with sales on their streets on a weekly basis. Some storage units will not allow constant sales out of their complex and some warehouses will not allow retail or for you to set up a small store in the unit, some don’t allow open to the public. So it’s best to do your homework before committing specially to a long term lease.
*Storage space for your merchandise, very important because very quickly your home can be overtaken with merchandise so you may consider a warehouse or storage unit to start. When renting/leasing any space make sure that it is compatible with your business structure to ensure longevity of your business. You do not want to have to make changes of business structure midway, it is not effective.
*For purchasing at the bigger liquidation sites they will require a tax exempt certificate which you will need to get anyway if you are serious about this business, you can get info from google about your states requirements but most companies will require you to have them.
*Time you will set aside for this business whether it’s part time or full time.
*Marketing materials such as business cards, flyers, signage and all materials needed to promote your business.
*Employees and how you will be paying them whether commission or payroll as independent contractors.
*How will you be accounting for the merchandise and money, it could be something simple as a spread sheet but you should consider some kind of accounting that will also help you with inventory.
-where and how you purchase will be crucial to your business no matter what size your business is your purchases will be actually where you make or lose your money so choose wisely, especially when you are first getting started and money is limited.
- Pick your merchandise what type and price points can be very important. You want merchandise that moves and probably would be best to start with specific types of products at first and then branch out to different merchandise. I started with Walmart, Amazon and Lowes because here in my area it was the more attainable merchandise.
- Search for the best liquidators in your area, if you are buying local or from online liquidation sites you should do some research to help you make an educated decision. Call around and talk to different suppliers to see what best pricing and shipping fees you can get.
- Facebook is a great deal of help to find people especially in your area and you can also look for the reviews and see what people are talking about in your area. Also can be used to contact different suppliers and many liquidators use this way to market their products.
- Study your competition see who has been successful in this business and in the industry for a long time. Usually the more established companies will be more helpful and willing to give you a bit more insight into the industry.
- Make it a point to meet people face to face when possible but make sure to reach out and ask questions even if it’s on the phone. This business is made of relationships with your clients, suppliers and drivers so keep in constant contact with all of them.
- Plan where you will store your merchandise (if your space is limited it may force you to sell at a price point that reduces your profits) and if you are serious plan for growth.
There are several approaches for marketing that you may have all can work if you put effort into them. Below is some that may be considered. We will also look at sales in a larger scale such as pallet sales and truckloads in later sessions but for right now we will stick to the basics.
- Local on the internet:
With sites like Craigslist, Offerup and Feabook Marketplace you can sell many items especially tools, bigger items such as furniture and appliances and many more that can be sold through these sites.
- Online shipping
This can be done with sites such as Amazon, Ebay, Poshmark and Mercari. I have done very little of this kind of sales but I did implement this in my second year and set up a Mercari account and has worked successfully. These sites are highly regulated and your buyers comments and reviews are very important to the overall performance of the account. For instance someone may prefer to buy from another seller if their rating is higher than yours due to the trust factor, so you have to really pay attention to this type of sales platform.
- Swap meets
This can be a great way to sell larger quantities of merchandise. Usually the profit is not as high because it will be more competitive. You may have several sellers trying to sell the same type of items and historically buyers go to swap meets to get good deals and basically trying to get it for pennies on the dollar. Still I have seen many people become very successful and use this model to do very well and build their business.
- Garage sales
This is where a lot of my clients have started and still use this method. This one has its own set of challenges depending on your location and jurisdiction. Where you choose to do a Garage Sale may have limits on when and how often you can do this and some areas you are not allowed at all so you must inform yourself as to the limitations that you may have. Remember that HOA areas as a rule will not allow any type of business to be ran out of the home so even if you are able to get a permit the HOA usually is in control. Do not let yourself be fooled just because a neighbor was able to do one because if you are serious about this business more than likely it will grow and you could find yourself with lots of merchandise and no way to sell it so do your homework.
- Storage units
Trying to sell from storage units also has a set of challenges for the same reasons listed above along with what the management may say or if they have rules that do not allow you to sell from there so again its best to do your homework and make sure you will not be shut down.
This is a great option when you get to the point that you have seen that this business is something that you will be pursuing. Just remember that as a rule Warehouse rentals require a commitment of time and money so this should be considered when creating a budget. Remember that most business require 6 months with of reserves saved so before you make this commitment make sure you have funds to leverage this type of decision.
This is probable the most profitable way at least in regards to
ROI (return on investment) because this is where you are able to price
Items with a more favorable margin. Now this usually will require the
most investment up front it may be the most profitable and if done
right the most long lasting potential.
- Marketing/Name Recognition
There is several things that you can do to create brand recognition for your business. Depending what your vision is for this business the sky is the limit because there are so many ways to be successful that you can implement to your business that if you are serious you should consider a robust marketing and name recognition campaign.
- Facebook marketing
This is usually where most people start now a day’s. They can contact friends and family and usually have a good deal of success. You can also create a group or page for your business and start by doing your post for products and advertising your business altogether. This is also a place where most likeminded people meet such as distributers and liquidators so you can get a lot of information
This is a great way to market and get your pics out there to be seen
- Web site
This may require quite a bit of work because as you know to be in the top at Google search is very hard so consider where you will be investing your money because a Website may be needed one must consider how much you are willing to invest in this platform.
- Flyers and business cards
Business cards will always be good and a handy way to present yourself a little more professionally. In these times they are used less than they were before but my opinion is that they still have some value during your presentation to clients and vendors.
- Ads in local advertising
There is a lot of local advertising that can be done to promote your business and especially local it can be fairly reasonable. Just look and see what would best fit this type of business and how fast you want to grow. Just remember to budget according to your ability and try to use all the free advertising avenues before you put too much money into ads.