Start An Online Resale Business Using Free Classified Ads.

A reselling business will be one of the best options for individuals who possess market knowledge but do not want to manufacture their products.

In simple terms, reselling means selling third-party products using your own effort to make a profit.

There are different reselling models available to sell products and services based on factors like

• Type of product or service.
• Target audience.
• The platform used.

Here, we are talking about the reselling model, which can run solely based on free classified ads. Let’s understand it deeply.

Analyzing the Market:

Before starting any business, it’s crucial to conduct thorough research to understand the demand and supply of the market. 

Here, supply means the availability of your products or services, and demand means the number of products or services customers want to buy within a specific time. 

You can estimate the market demand for your product using Google Trends. This is completely free and quite accurate. Here you can get complete details.

Now, if your product is in demand, then start collecting them.

Nowadays, classified ads are the most significant supply source for your products. People frequently use free classified platforms like Craigslist, OLX, and Facebook Marketplace to buy and sell used items. These platforms provide a convenient and accessible way for people to engage in secondhand transactions, often resulting in mutually beneficial deals.

Why is a third-party reseller needed?

Although online classified websites provide a platform for direct transactions between buyers and sellers, buyers may have concerns about the authenticity and reliability of sellers.

In such cases, a trustworthy third-party reseller could be the solution. Such a reseller can protect buyers from scams and take responsibility for the purchased products. For instance, resellers can provide warranties, free/paid services, etc.

How it works:

As a reseller, you can browse thousands of used products listed on free classifieds platforms such as OLX, Craigslist, and Facebook Marketplace. Individuals offer these products for sale, and you can purchase them at a reasonable price. 

After that, enhance the quality of these products, add value by offering free services and a warranty, and resell them at a higher price. This is a great way to make a profit as a reseller.

But this is not so easy. There are multiple challenges you are going to face in the real-world market. 

Challenges you’ll face as a reseller;

1.  Not all used products are sold instantly: Your selected products should be expensive enough to encourage people to consider buying secondhand before purchasing new ones.

2.  Travelling costs might be higher: When purchasing old products through classified listings, it’s necessary to physically inspect them before buying. This often requires travelling to the seller’s location for inspection. Additionally, there may be additional costs associated with transporting the purchased items to your own warehouse, which will depend on the distance between your location and the sellers.

Solution: Set product value higher and focus on providing better service. Used products are often creating problems for customers. Customers will not mind paying you a little higher than the market value if you offer better service assurance.

3. Need expert knowledge about your products: As a reseller, it’s important to remember that not all used products listed for sale are in good condition. Therefore, it’s crucial to have expert knowledge to understand the status of the products. This will help you make practical deals based on the market value.

Solution: Only purchase those products on which you have expert knowledge. You must have enough knowledge to understand the quality of the used products and how much it will cost to refurbish or repair them. 

4. There might be unlawful products: Online marketplaces are often misused by individuals who sell stolen or suspicious products using fake IDs. So, it’s very challenging to identify fraudulent listings. Although efforts have been made to regulate these platforms, illegal activities still threaten consumer safety.

According to a report by CNBC in 2022, stolen items have been sold on e-commerce platforms like Amazon and eBay. Amazon claims to have spent $900 million and hired approximately 12000 people to prevent fraud and abuse. 

So, there is always a chance of being scammed. 

Solution: Unfortunately, identifying stolen or suspicious items (Electronic devices that might be used in a crime) listed online is nearly impossible. However, there are certain signals that can help you spot an illegal item and avoid any associated risks.

1. There might be unusually lower pricing for new condition products. 
2. There is no detailed information about the products and sellers, such as the original bill.
3. Easy bargaining might be a signal of caution. The seller might be in a hurry to sell at any cost.

5. Need business documentation: To start a reselling business, you must register your business as per your government law. You need a business license, tax identification number, and other permits or certifications. You must comply with all legal requirements to avoid future legal issues and penalties.

Solution: Documentation of reselling business is an easy process. Governments are likely to promote any legitimate business. So, you need to talk to your local licensing authority and a business account to receive payment.

Tips to maintain constant supply;

After setting up your business, the next step is looking for products you wish to sell. You can browse through popular classified sites such as eBay, Quikr, and Facebook Marketplace to find products that match your business objectives.

Here are some tips to increase the success rate of your purchasing deals-

• Always make deals on behalf of your organization rather than individually. It will increase the trust factor. 
• Assure doorstep pickup. 
• Offer practical pricing. Your purchase pricing should justify the actual market value of the product. Don’t worry. You can increase the valuation of the product after refurbishment. 

Tips to maintain constant sales: 

• Advertise refurbished products on the same classified platforms where you’ve found those. You can also sell your refurbished products online by making an e-commerce website. However, I suggest selling on free classified platforms and the FB marketplace initially. Because people only pay online on a popular and trusted website/app. So, gaining trust among the physical customers first is better before going online.
• Consider using Amazon Renewed. It’s one of the fastest-growing platforms for buying and selling secondhand products. To qualify as an Amazon reseller, you must show them proof that you have purchased 8 lakh rupees of products in the last 90 days. Know more about Amazon Renewed here. 
• Tie up with local technicians to refurbish and service your products. Many skilled technicians in the local market offer excellent service at a low cost. You will get a clear idea about the highest and lowest cost of servicing your products.
• Now include service costs and profit in your selling price, but ensure it is not too high for customers to go for other options. As a reseller, your primary intention should be to increase sales, not short-term profit. 
• Always fulfil your promise of providing free servicing. This will create a positive impact on customers. And a happy customer will organically bring more potential customers to your business. 

For your safety

• Always take a sell letter from sellers. Ask them to provide original bills also.
• Never pay token money or any advance payment.
• Never buy unusually lower-priced products. It is a straight scam, or the product might have a bad past.
• Prepare your terms of service and print them behind the original bills. Otherwise, customers will take legal action if you refuse to provide service beyond your capacity. 
• There are many government websites where you can check whether an electronic device such as a mobile phone is blocklisted or not. If you are from India, then visit the CEIR website for details.