How to Start Your Own Resale Business

Running a business can be a rewarding experience, both emotionally and financially. A resale business is an excellent way for merchants to interface with customers while supplying a product customers want and need. Starting a resale business is somewhat less complicated than starting other business types, though the task is not simple by any measure. This article will explain some basic steps required to start a resale business.

Things You'll Need

• All required business licenses (local, county and state) All required tax endorsements Start-up grant or funding

Instructions

Start Your Resale Business

1. Develop a business plan. The business plan you develop when starting your business will set the principles of operation for the entire life of your organization. The plan should outline specific steps you will take to achieve and maintain profitability, detail how leaders are selected and managed, explain how employees are hired and justified, and provide guidance during tough business times. If you are unfamiliar with business plans or need professional assistance creating one, you may wish to consult your local Service Corps of Retired Executives (SCORE) office for assistance.

2. Partner with suppliers. With a business plan in place, you are ready to select the suppliers that will provide you with products to stock your business. Shop around for suppliers that offer quality products at low wholesale prices, and do not be afraid to diversify by buying stock from two or more suppliers.

3. Establish lines of credit. Depending on your personal and business financial situation, you may be able to buy your inventory up front or secure inventory on credit from your suppliers. If your suppliers are willing to send you products to stock your resale establishment without requiring up-front payment, maintain your credibility with these suppliers by always remitting payment on time. Good credit with a supplier can help grow your business later.

4. Select a location. If you intend to open a physical store where customers can come in and browse your products, select a store with ample foot and vehicle traffic (which will help offer free advertising for your store) as well as sufficient room for parking. Select a location in a safe neighborhood where customers will feel comfortable coming into your establishment. Do not overstretch your budget, however, by opting for premium locations unless you are certain you will be able to afford high rent prices.

5. Install business equipment. Depending on the needs of your store and the type of products you sell, the equipment you need in your store will vary. You will likely need a cash register and a credit card machine, as well as a credit card merchant account. You may need slatboard (a wall mounting fixture designed for display of retail products) for the walls, or gondolas for displaying your inventory. Shopping carts, bags and any utensils your customers may need while wandering about your store should be stocked and kept plentiful. Also, keep special considerations in mind; if you are selling groceries you may need refrigerated displays, or if you are selling cigars you may need humidors.

6. Secure your store. An unfortunate fact of retail sales is that thieves do exist. No matter what type of items you are selling, someone is likely to try to steal some portion of your inventory. For this reason, security cameras, security tags and even security guards may be necessary in your store to prevent loss.

7. Stock your store. With all of the fixtures and business equipment in place, begin ordering from your suppliers and stocking your store with inventory. You may want to observe the amount of traffic going in to and out of neighboring businesses to estimate just how much inventory you should have on hand for your opening day. Be careful not to underestimate your needs, as customers who venture into a store with very little inventory may be turned off and leave. On the other side of the token, of course, too much inventory can create expense problems that you may not be able to recover from. If in doubt on how much inventory to order, consult your business plan or ask neighboring merchants.

8. Advertise. Advertising is the way you will let customers know you are ready for their business, and may be your singular link to them. Craft a thorough advertising plan using all resources within your price range (such as radio, television, newspaper, Internet, flier, direct mail and billboards) to get the word out about your business. Advertising can consume a large portion of your start-up budget, but it will likely generate a considerable return on your investment.

9. Greet customers. On opening day, be available to help customers, answer their questions and make their shopping experience as pleasant as possible. As long as you provide a needed service and keep your customers happy, your business is likely to flourish.

Tips & Warnings

• Always make customer service a priority; the number one rule of business is that if you do not keep your customers happy, someone else will. Maintain a significant advertising presence; if your customers forget about your store, your business will decline.

• Always file your taxes as required by your local and state government; retail businesses are subject to sales tax regulations that require strict adherence.

Resources

• SCORE: Service Corps of Retired Executives