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Costs Associated with Getting Started
Make these investments for a successful business
Starting a business can be quite lucrative whether you’re doing it full-time or on the side of a steady salary job until it takes off, however, there are costs associated with getting off the ground that needs to be considered as you get started.
Our full-time sourcing partners have provided some insights into how they started their businesses and what costs they incurred to ensure it was successful from the start.
RESEARCH: While it won’t cost you money to research, your time will be used quite heavily in the beginning. Since time is money, this is one cost associated with getting started that should not be overlooked. This is the personal investment you need to do in order for success with minimal trial and errors along the way. So, what are you researching in the beginning?
First, you’ll be researching your sourcing options. There are a lot of partners in this industry you can source from, and all have positive and negative reviews. From researching their inventory, to current prices of the merchandise on the resale market, to factoring in all your upfront costs. In the beginning, expect this to take around 20 hours per week to complete. Over time, this will decrease by half as you get more familiar with the sourcing vendors and the current prices of the merchandise on the market.
Second, and maybe the most prone to trial-and-error is condition testing. Frankly, a lot of new sourcing buyers enter this business expecting merchandise to be in ‘New’ or ‘Like New’ conditions, especially from the Returns condition, however, that’s not always the case. Merchandise in this industry may need some TLC before it goes up for sale. This can range from a simple cleaning or steam to cosmetic repairs to maybe even dismantling and selling for parts. Start small with each condition from each seller. Find what works for your business and slowly expand after conducting more research.
Finally, the resale channel you’ll use will be the last bit of research needed in the very beginning. This too is a trial-and-error step as you need to identify which channel will give you the most competitive listing without taking too much of your profits in fees. You may even find that one channel is good for clothing without tags, and another is better for clothing with tags – so it’s good to experiment across a variety of channels.
In your research of resale channels, find the one with the ability to speak to your buyers in a public and private environment. Having positive, public feedback can help boost your business by giving it the credibility for other buyers to notice and eventually purchase.
BUSINESS EXPENSES: Since most our Buyers operate their business out of their home, you not only don’t need to worry about getting office space, but you can also write it off on your taxes! Win-Win. So, what actual expenses will you need to make?
First, you’ll need the equipment to conduct your research. If sourcing and reselling online this means computer, internet service and/or a smartphone to do on-the-go sourcing. If sourcing offline, and depending on where you live, you may need access to a form of transportation to get around. Additionally, there are other general supplies from boxes, packing materials, tape, flat-envelopes, and maybe even cards if you wish to go the extra step in your shipment process by including a handwritten thank you card.
Specialty items such as a shipping scale, barcode scanner, magnetic security tag remover, label printer, replacement pieces, or membership/subscription fees may also be needed for your business, although you may not need to purchase these unless it becomes a necessity.
Finally, don’t forget about the costs needed for your business license, taxes, labor (if needed), as well as any unexpected business expenses you may encounter if items are returned for any reason.
PRO TIP: Remember to keep the receipts for anything you need to buy for business purposes. These can all be written off on your taxes!
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