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Ultimate Guide to Buying and Reselling Online

Posted in general, tagged , , , , , , , , , , on March 25, 2010| Leave a Comment »

Welcome to DEAL Chasr’s Ultimate Guide to Buying and Reselling Online, where entrepreneurs can learn about online reseller opportunities and make real money. DEAL Chasr itself is a useful tool for finding outstanding deals online, but it can also be a powerful asset for aspiring online resellers. So whether you are interested in learning how to resell online or looking for ways to expand your current reseller business, this guide will be the key to your success!

Skip ahead right now to any section of the guide using the handy outline below:

I. Buying and Reselling Online: The Basics

What It Means to Buy and Resell Online

Since the dawn of the Internet, there has been an ever-increasing desire for entrepreneurs to make money online. Sometimes it seems like the money-making options are limitless as the Internet continues to grow and bright minds come up with new ideas everyday. One option in particular, buying and reselling online, continues to show promising results for those people who have a good business sense and the right tools.

Buying and reselling online has its roots offline, because in all reality the retail business as a whole is made up of people who buy and resell products. The concept is not so dissimilar on the Internet, and now people with little or no background in retail can buy and resell products online from the comfort of their own homes.

The basic theory is this: buy a product at a lower price and resell it at a higher price. The higher price may in fact be the regular price, but since you paid a lower price you can make a profit. How much profit you make depends on a number of parameters, including how low of a price you pay, how popular the product is, and how much supply there is.

Different Ways People Buy and Resell Online

As diverse as the Internet is, there are indeed a number of ways to buy and resell products online. Some people start offline and buy products at garage sales, thrift stores, antique stores, estate sales, or flea markets. They then resell these products online for a profit. Other people start online, buying products directly from the source they intend to use to resell those very products. A great example of this is people who participate in eBay reselling, buying products on eBay that are priced lower than they’re worth and then posting them right back on eBay for a higher price. This practice is not all that dissimilar from the main focus of this guide. The next section will discuss in detail how resellers can use special tools like DEAL Chasr to make money online.

Using DEAL Chasr to Buy and Resell Online

A popular but admittedly more difficult way to resell products online is to watch for great sales, deals, or random price drops on products and then buy at just the right time so you can later resell those products for profit after the price goes back up. While sales are often advertised ahead of time, it can be difficult to predict other types of price drops that are more random. DEAL Chasr is a unique tool that helps solve the problem that resellers have in needing to spend so much time and effort constantly monitoring product price fluctuations. DEAL Chasr watches for price drops so you don’t have to, letting you know about outstanding deals as soon as they happen. Furthermore, the useful ranking system of “Amazing Deal”, “Great Deal”, and “Good Deal” gives you more insight into the quality of the deal, helping you make a better decision when it comes to reselling (for more information about how DEAL Chasr actually works, read the FAQ). The bottom line is, DEAL Chasr is here to help online resellers by providing valuable information that is vital to making real money online.

II. Getting Started Buying and Reselling Online

Make a Plan

Any successful entrepreneur knows that the first step in the process of creating a viable business is to make a plan. Without a plan, online resellers can quickly become nose deep in problems. There are (at least) three major considerations when constructing a plan to buy and resell online. First, it is important to decide upfront the scope of your venture: do you simply desire some additional side income or would you like buying and reselling online to be your main source of income? Second, you need to take an inventory of your time. How much time do you currently have to commit to this project? Can you make more time? Is this venture something you see yourself doing in the long-term or just the short-term? Finally, it is vitally important that you address the investment end of a reselling business. With any business, you have to spend money to make money and buying and reselling online is no exception. While you will have the expectation to make back more money than you spend upfront, it is wise to evaluate how much money you have in the first place to spend upfront. In addition to these three major considerations, your plan should also get you thinking about the details of how your reselling business will actually function. The next few sections of this guide will focus on some of these matters.

Address Your Business Needs

Even though most people will end up conducting their buying and reselling business from home, they will still need certain tools and supplies to effectively run their business. Basic needs include a computer, printer, Internet access, e-mail address, and the appropriate office supplies. Other needs may include tools to enhance your online auctions, such as a digital camera. Beyond that, resellers will have to consider methods of shipping and might want to purchase their own shipping supplies such as boxes, envelopes, tape, and a scale. Finally, depending on how large the business grows, successful resellers might benefit from tools to improve their workflow, such as special software.

Research the Market

Before diving into buying and reselling online, is crucial to do your homework. If you want to successfully resell products for profit, there needs to be a demand for these products. The best way to start is to carefully research the market. Which products are popular? Which brands are popular? Are any products selling so fast that supply cannot meet demand? Which products provide the best chance for a profit? Once you begin investigating the market, it will become clearer which products are ideal to target for buying and reselling online.

Weigh the Risks

If buying and reselling online carried no risk at all, then everyone would be doing it, right? The truth of the matter is, all businesses have inherent risk. In the case of a reselling business, the most obvious risk is that you’ll spend money upfront to buy a product and will not make a profit reselling it. The worst-case scenario is that you will not be able to resell a product at all. As discussed above, doing careful research can lessen much of this risk. But you also just need to ask yourself if you’re willing and able to accept occasional failures. Are you a risk-taker in general? How much time and money can you afford to lose? This exercise is not meant to paint a negative picture of buying and reselling online. In fact, the inherent risk to a business model such as this demonstrates how much potential there is for success if you do things right. Remember, if it were that easy, everyone would be doing it.

Get Your Feet Wet

The nice thing about buying and reselling online is that if you have any concerns about getting involved with such a venture, it is not too difficult to first test the waters on a small scale. Get your feet wet and see how you like it. Buy one or two products and try to resell them online. After a few practice runs, you might have a better idea about your level of commitment when it comes to buying and reselling online. The next section of the guide will help you get started testing the waters by exploring the various reselling platforms.

III. Reseller Options: Which Reselling Platform Is Best for You?

Reselling Platforms: The Big 3

While there certainly are many different ways to resell products online, including having your own e-commerce website, there are three reselling platforms that stand out amongst the rest as being excellent choices for resellers. All very popular and each one carrying unique attributes, the “big 3” are (in no particular order) eBay.com, half.com, and Amazon.com (formerly known as Amazon Marketplace). The next sections will break down each platform by highlighting important characteristics and comparing the pros and cons of each.

eBay.com

eBay.com, founded in 1995, is an online shopping and auction website that caters to buyers and sellers worldwide. Originally targeted towards people interested in buying and selling used items such as antiques and collectibles, eBay has grown into a large and successful website that offers two main kinds of product sales formats: set-time auctions and “Buy It Now” sales. eBay sustains itself by charging a variety of fees to sellers in exchange for an opportunity to sell almost anything they desire (some restrictions apply). eBay is by far a very popular and flexible choice for people interested in buying and reselling just about anything online.

Half.com

Half.com, founded in 1999 and purchased by eBay in 2000, now exists as a subsidiary of eBay in which sellers can only sell certain items at a fixed price. These products include books, textbooks, music, movies, games, and game systems. Rather than charging fees to list an item, half.com takes a commission of every completed sale. Half.com offers more a standardized buying and selling process — what might be lacking in flexibility is made up for in ease of transaction.

Amazon.com

Amazon.com, founded in 1994, is America’s largest online retailer. More recently, Amazon also offers an opportunity for people to sell products online. Formally known as Amazon Marketplace, the “sell on Amazon” platform is similar to half.com in that transactions are standardized and Amazon charges commissions based on sale price. Amazon does offer more categories and optional pricing plans as well.

Evaluating the Pros and Cons of Each Platform

Each reselling platform discussed above has its own set of advantages and disadvantages. While eBay.com offers the most flexibility in terms of sale format, product options, and the ability to customize, it also requires the most amount of work and carries a more complicated fee structure. Both half.com and Amazon.com have limitations regarding what you can sell, but seem to make up for it with how easy it is to sell products through their standardized platforms. Most of the time all you need to do is provide the UPC or SKU product code plus an asking price and you’re set to go.

Choosing the Best Reselling Platform for You

As a unique online reseller, the choice is ultimately up to you as far as which reselling platform works best for you. Ideally, resellers do not need to choose just one of the platforms and stick with it exclusively. Rather, it seems clear that trying a combination of the three platforms, followed by careful testing and evaluating of individual results, will yield a clear strategy for your reselling business.

Choosing the Best Reselling Platform for DEAL Chasr

Currently DEAL Chasr identifies and displays deals from both Amazon.com and Newegg.com. If your strategy is to buy a product from Amazon while the price is low and then resell it after the price has gone back up, by far the most obvious way to accomplish this would be to use the Amazon.com selling platform. Why? Right after you buy the product from Amazon, you can turn around and list it for sale on Amazon without much effort at all. However, you might find that you can fetch a higher price using the other two platforms depending on Amazon’s new current price. The bottom line is, there is no single reselling platform that works best with DEAL Chasr every time — rather, each case of buying and reselling should be treated individually to maximize profits.

IV. Buying and Reselling Online: Tips and Tricks

How to Decide Which Products to Buy

The idea of doing research before buying has already been discussed above, but there are further tips that can be provided to help an online reseller get started. Simply stated, a prospective buyer should always be paying attention. While hot-selling products are hard to miss, it is important not to overlook other products that might fetch you just as much profit after reselling, if not more especially since you will have to deal with less seller competition. This is where DEAL Chasr really shines because it includes deals from a wide spectrum of categories and many levels of popularity.

How do you determine which products are popular enough to resell? A sound way to accomplish this is to use tools provided by the reselling platforms themselves. For example, eBay allows you to look through a limited number of completed listings to see not only which products are selling, but how much they’re selling for. On the other hand, Amazon.com calculates a sales rank for all of its products which can be useful to resellers trying to evaluate the popularity of an item.

Finally, common sense is really your friend when it comes to buying and reselling online. Obscure products are obscure for a reason and probably will not resell at a very high rate. Products that continue to be popular over time consistently fall in the same categories: electronics, DVDs, video games, video game systems, and the like. That is not to say that other products outside of these categories will not be good resellers, but you can be sure that the above categories are a safe bet for success.

How to Decide What Quantity to Buy

After you decide which products to buy, you then have to make a decision about what quantity to buy. Many of the tips and tools listed in the above section will aid in this decision but it is also important to consider another factor: risk. You will quickly find that no amount of research will provide you with an exact answer about how much of a product to buy. In the end you will just need to decide how much risk you’re willing to take. Research will give you a good feel for an appropriate number, but a combination of your experience with buying and reselling online and your level of comfort will dictate what you ultimately decide.

How to Decide When to Buy

Yet another factor to consider in the buying and reselling process is timing. Time of year can have a significant impact on your success. For example, holiday seasons are consistently a great time for buying and reselling. Black Friday, Cyber Monday, Christmas, and other holidays offer not only tremendous deals, but an opportunity to capitalize on consumers’ need to buy gifts in a timely fashion. These times of year also tend to produce the most “hot items” where supply usually does not meet demand and resellers can fetch high prices for their products. All this aside, it does not mean that other times of the year are not suitable for buying and reselling online. Consumers make purchases all year long and in fact, resellers will be rewarded with reduced competition from other resellers if they focus on the less popular seasons.

Time of day can also have a significant impact on your success when it comes to reselling products on eBay. Using this platform, sellers have the option to set a specific start and end time for their auctions. Be careful that your auction is not ending at an inconvenient time of the day for your target customers.

A final timing consideration has to do with product price history. Just how low will the price drop on a product? When and by how much will the price go back up? At what point after the price climbs back up is it appropriate for a reseller to begin selling the product? Unfortunately there are not clear answers for these difficult questions because in all honesty the retailers keep these secrets heavily guarded. By far the most important asset a reseller has is experience and that only comes with time.

How to Design Your Auction or Sales Page for Best Results

As discussed above, sales pages on half.com and Amazon.com are pretty much standardized, with little room for customization. But that does not mean you can’t put forth any effort in order for your product to stand out among the rest. Pay special attention when writing your product description not to have any spelling or grammar mistakes. Additionally, consider including a professional-looking and colorful graphic for your profile image. Finally, use persuasive yet professional language and don’t forget to be competitive with product price and shipping.

On eBay.com, resellers can really shine in the area of auction or sales page customization. Experienced resellers include thorough and comprehensive descriptions, high-quality photographs, and professional graphics. Customers feel much more comfortable buying from a source that looks professional (and therefore appears reliable and trustworthy) rather than a seller who just has a couple lines of plain text.

How to Price Products for Resale

Perhaps one of the most important factors to consider when buying and reselling online is how to price products for resale. Price is always the first thing a customer looks at and can be the sole determining factor in whether your product sells.

As discussed above in the section about how to decide which products to buy in the first place, it was noted that there are several tools at a reseller’s disposal to evaluate how to set prices. eBay in particular has a very useful tool (completed listings search) that provides real data about how much products are selling for. While eBay only allows you to see data from the last 15 days, a company called terapeak (an eBay Certified Provider) offers even more valuable data going back much further than 15 days for a monthly or yearly subscription fee.

Finally, deciding how to price your products for resale has a lot to do with what other resellers are charging for the same product. Sometimes, the simplest solution may be to just price your product slightly less than everyone else to appeal to customers. On the contrary, certain reselling platforms like eBay aren’t necessarily as competitive in this way and prices can vary a lot more. In many ways, pricing is psychological and a combination of experience and skill can go a long ways for a reseller.

A Couple of Helpful Examples

Now that you have a good set of tricks up your sleeve for buying and reselling online, it is useful to consider a couple of helpful examples. The first example recalls a very popular and well known attempt by resellers to make money online from the 2006 holiday season. The second example is hypothetical but provides a more realistic strategy for a sustainable reselling business.

Example #1: Many of you might remember the launch of the Nintendo Wii in November of 2006. Expectations were high and supply could not meet demand well into 2007. Online resellers took advantage of this and attempted to buy any and all of the available Wii consoles where they could find them. Many online resellers enjoyed success and considerable profit, however competition was intense due to the high number of people attempting to make money from reselling the Wii. Profit margin was high initially, but eventually tapered off as the demand dropped and the number of people trying to sell the consoles online grew to an unsustainable level.

Example #2: Anyone who frequently browses deals posted by DEAL Chasr will quickly notice that products such as DVDs tend to randomly drop in price for a short time and then go back up to a higher price. While a single DVD may not cost very much, a DVD set (such as a TV series) costs much more and has a much higher potential for reselling profit. If Season 1 of a TV series suddenly drops in price from $39.99 to $19.99, it would be beneficial to buy several copies and then sell them for profit once the price goes back up to $39.99. Better yet, if an entire boxed set of Seasons 1-8 of a TV series suddenly drops in price from $149.99 to $69.99, it would be even more beneficial to buy several copies and then sell them for profit once the price goes back up.

The point is, a product does not have to be in extremely high demand or very low supply in order for it to be a good product for reselling. While the Wii example above is a great example of how people capitalized when the time was right, products like that only come around every once in a while and competition can be much too high to benefit many online resellers.

V. The Secret to Buying and Reselling Online: Never Give Away Your Secrets?

If Everybody Does It, Nobody Makes Money

You might already be thinking it: if everybody tried buying and reselling online, then nobody would really make any money. This fact is true of many types of businesses — if too many people jump on the bandwagon, then the market gets saturated and profit margins all but die. However, also like many types of businesses, the lack of skills or desire to put forth much effort often weeds out the majority of people who think they can get something for nothing. Furthermore, the truth of the matter is this: (1) there are indeed a number of people out there who are trying to make legitimate money buying and reselling online, but (2) for every one of these people there are many more who are simply looking to find deals for themselves personally, and (3) there are infinitely more people out there who are simply everyday consumers that have little or no clue about the business of online reselling. This guide is only meant to share “secrets” with a small set of people who have serious goals towards making money buying and reselling online.

How to Achieve an Edge over the Competition

If it isn’t obvious by now, to be successful at buying and reselling online one needs to achieve an edge over the competition. Hopefully this guide has already contributed to your edge. Nevertheless, it is important for any aspiring online reseller to work hard, work quickly, and learn the system well enough to maximize profits. Buying and reselling online isn’t for the faint of heart, nor is it really ideal for a casual passerby. If you want to make real income, you need to put forth real effort.

How DEAL Chasr Can Be Your Best Friend

It’s true that there are many sources on the Internet that provide useful information about deals that online resellers can capitalize on. In fact many of these sources, such as the popular SlickDeals.net and FatWallet.com, are excellent communities where like-minded people passionate about deals can get together and help each other out. Unfortunately, what is good about these communities can also be a disadvantage for people attempting to buy and resell online because everything is out in the open. Many people who frequent these forums might have a casual hobby in reselling, but most are probably just looking for a great deal for themselves. DEAL Chasr is different in that it is a tool specifically designed with resellers in mind. The goal of DEAL Chasr is not to attract massive crowds around each and every deal, but rather to be an invaluable resource for those savvy entrepreneurs who desire to make money from buying and reselling online.

So, what are you waiting for? Head on over to the deals page on DEAL Chasr and start making money online! Also, don’t forget to subscribe via RSS to stay up-to-date with the latest deals.

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