Starting a reselling business is an exciting venture that combines a good eye for products and sharp negotiation skills with business savvy. The barrier to entry can be low, which makes it an attractive market, but that accessibility doesn't mean success comes easy.
This guide will take you through the practical steps of validating your business concept, building supplier relationships, acquiring inventory, and getting the right licenses to help you launch a successful reselling business in the U.S.
Step 1: Validate your niche and map out your finances
Research your market and competitors
Before you buy any inventory, confirm there is a market for it. Spend a few hours on platforms like eBay or Poshmark and filter for “sold” listings in your chosen category. This shows you what people actually buy, not just what is for sale.
A common misstep is buying products based on a hunch. Instead, use data. A platform like Terapeak, which is available to eBay sellers, provides sell-through rates. A rate below 50% suggests you might want to reconsider that product category for now.
Once you have a niche, identify 3-5 top sellers in that space. Study their pricing, photo quality, and product descriptions. For collectibles or antiques, a resource like WorthPoint can show historical sales data, giving you a deeper understanding of an item's value over time.
Estimate your startup costs
With a validated idea, you can build a realistic budget. Initial costs often fall between $700 and $3,000. Your main expenses will likely include:
- Initial Inventory: $500 - $2,000
- Business Formation (LLC): $50 - $500, varies by state
- Shipping Supplies: $100 - $300 for boxes, tape, and labels
- Platform Fees: Typically 10-20% of the final sale price
Under-budgeting for platform fees is a frequent oversight that can shrink your profit margins. Always factor these percentage-based costs into your pricing from day one.
Here are 4 immediate steps to take:
- Spend a week tracking sold listings for 5-10 potential products on eBay.
- Identify three successful competitors and analyze their pricing and product photos.
- Create a spreadsheet to list and total your estimated startup costs.
- Research your state's requirements for a business license or LLC formation.
Step 2: Set up your legal structure and get licensed
You might want to form a Limited Liability Company (LLC). It separates your personal assets from business debts. Many resellers start as a sole proprietorship, but this offers no liability protection. An LLC provides a formal shield. You can file with your state's Secretary of State for $50-$500.
Next, get an Employer Identification Number (EIN) from the IRS. It is a federal tax ID for your business. Applying is free on the IRS website and you receive the number immediately. You will need an EIN to open a business bank account.
Secure your permits
A seller’s permit is your ticket to buying inventory tax-free from wholesalers. You apply for this through your state’s Department of Revenue or taxation agency. A frequent misstep is not getting this permit early, which forces you to pay sales tax on your inventory purchases.
Finally, check with your city or county clerk for a general business license. These requirements vary by location, but the license typically costs between $50 and $150 per year. Operating without one can lead to fines.
Here are 4 immediate steps to take:
- Apply for a free EIN on the IRS website.
- Register your LLC with your state's Secretary of State office.
- Find and apply for a seller's permit through your state's Department of Revenue.
- Check your local city or county government website for business license requirements.
Step 3: Insure your business and manage risk
With your business legally formed, the next step is to protect it. You should consider a general liability policy with at least $1 million in coverage. Annual premiums for this typically range from $300 to $700 for a small reselling operation.
A key risk for resellers is a product causing harm. Product liability insurance covers this and can often be bundled with your general liability policy. Ask your agent about this specific add-on, as it is not always standard.
You also need to protect your inventory. Many new resellers assume their homeowner's policy covers business stock, but it usually does not. Look into an inland marine policy, which protects your goods while stored at home or in transit to customers.
When you shop for quotes, consider providers like Hiscox, The Hartford, or Next Insurance. They specialize in small business and e-commerce policies and understand the risks you face. Getting the right coverage from the start prevents major financial setbacks later.
Here are 4 immediate steps to take:
- Get a quote for a $1 million general liability policy.
- Ask potential insurers about adding product liability coverage.
- Review your homeowner's policy to confirm it excludes business inventory.
- Request quotes from Hiscox, The Hartford, and Next Insurance.
Step 4: Secure your workspace and equipment
Most resellers begin at home. A 100-square-foot space in a garage or spare room is often enough. Before you start, check your local city's rules for home-based businesses and any HOA restrictions to avoid future headaches.
Get the right gear
Your initial equipment investment does not need to be large. Focus on items that speed up your listing and shipping process. Good photos and accurate shipping weights are where you should direct your funds.
- Photography Setup: A simple lightbox ($50-$100) and a smartphone tripod ($20) will dramatically improve your product photos.
- Shipping Scale: An accurate digital scale ($20-$50) prevents postage errors with carriers like USPS or UPS.
- Thermal Label Printer: A Dymo or Rollo printer ($150-$250) eliminates the need for ink and tape for labels.
- Storage: Basic metal shelving units ($50-$150 each) keep your inventory organized and off the floor.
Stock up on shipping supplies
Once you have a few sales, buy shipping supplies in bulk from suppliers like Uline or local packaging companies. A frequent misstep is buying too many box sizes at once. Start with a few versatile options, like 6x4x4 and 10x8x6 boxes, to control costs.
Here are 4 immediate steps to take:
- Measure a 100-square-foot area in your home for your workspace.
- Check your city's website for home-based business regulations.
- Price out a thermal label printer and a digital shipping scale online.
- Identify three standard box sizes you will need for your products.
Step 5: Set up your payment processing
Most online platforms manage payments for you, but you need a plan for in-person sales. A frequent mistake is ignoring transaction fees, which average 2.5% to 3.5% and can quickly eat into your profits. Slow fund transfers can also disrupt your cash flow.
For resellers who need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone. Just tap and done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for flea market sales or local pickups. This rate is often lower than what other payment providers offer, which helps protect your margins.
- Get Started: Download JIM app for iOS
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers
Here are 4 immediate steps to take:
- Factor a 2-4% payment processing fee into your pricing for all items.
- Research the payout schedules for the platforms you plan to sell on.
- Download the JIM app to see how it works for in-person sales.
- Decide if you will accept cash only, cards, or both for local transactions.
Step 6: Fund your business and manage finances
Plan to have at least $1,500 to $4,000 in working capital. This amount should cover your first six months of inventory purchases, platform fees, and shipping costs before your sales become consistent. A frequent oversight is underestimating these ongoing expenses.
Explore your funding options
For inventory, an SBA Microloan is a solid choice. These loans range from $500 to $50,000, with interest rates typically between 8% and 13%. They are designed for new businesses that may not qualify for traditional bank loans. Another option is a business credit card with a 0% introductory APR.
Many cards offer this for the first 12-18 months, which gives you a runway to buy inventory without immediate interest charges. Just be sure you can pay off the balance before the promotional period ends. With your funding secured, open a dedicated business checking account immediately.
Mixing personal and business funds complicates tax season and can put your personal assets at risk, even if you have an LLC. A separate account creates a clear financial record from day one.
Here are 4 immediate steps to take:
- Calculate your working capital needs for the first six months.
- Research local lenders that offer SBA Microloans.
- Look for business credit cards with a 0% introductory APR.
- Open a separate business checking account to manage your funds.
Step 7: Build your team and systemize your workflow
When your monthly revenue consistently exceeds $5,000, you might consider hiring help. Your first hire is often a part-time Listing Assistant. This person handles photography, measurements, and drafting descriptions. Expect to pay an hourly rate of $15 to $25, depending on your location.
Many new resellers misjudge the time it takes to train someone. Before you hire, document your entire process from sourcing to shipping. A simple guide with screenshots ensures your new hire can work independently faster. This also makes your business operations more consistent.
Create your operational playbook
As you grow, a Shipping Coordinator can manage packing and postage. Often, one person can handle both listing and shipping duties for 10-15 hours per week. No specific certifications are needed for these roles, as training is typically done on the job.
To manage tasks, you can use a free project management app like Trello. Create columns for "To List," "Listed," and "To Ship." This gives everyone a clear view of the workflow. As a benchmark, aim for each full-time team member to support at least $75,000 in annual revenue.
Here are 4 immediate steps to take:
- Draft a one-page guide that details your listing and photography process.
- Create a sample job post for a part-time Listing Assistant role.
- Review IRS guidelines on classifying workers as employees versus independent contractors.
- Set up a free Trello board to map out your current workflow.
Step 8: Market your business and find customers
Use social media to build a following
Create a business profile on a visual platform like Instagram or TikTok. Post daily stories showing your sourcing trips or new inventory. Use 10-15 relevant hashtags like #resellercommunity or #thriftfinds to reach interested buyers. Short-form video showing a product's details can significantly increase engagement.
A frequent misstep is to just post product photos. Instead, tell a story. Share the history of a vintage item or show a "before and after" of a piece you cleaned up. This builds a brand and encourages repeat customers who follow your journey.
Leverage platform marketing features
Most marketplaces have built-in promotional features. On eBay, you can use Promoted Listings Standard. You choose an ad rate, typically 2-15% of the item's final sale price, and you only pay if the item sells through that ad. Start with a low rate like 5% on 10-20 listings to test its effectiveness.
This helps your items appear in more prominent spots on the site. Track your sales to see if the extra visibility justifies the fee. If you spend $10 on fees and generate $200 in extra sales, it is a worthwhile investment to scale up.
Here are 4 immediate steps to take:
- Create a business profile on Instagram or TikTok for your store.
- Identify and list 10 popular hashtags relevant to your product niche.
- Review the Promoted Listings feature on the platform you plan to use.
- Choose five items from your inventory and set a test ad rate for them.
Step 9: Price your products for profit
Set your pricing strategy
A simple starting point is keystone pricing. This means you double your item's cost. If you buy a vintage jacket for $25, you list it for $50. This 100% markup gives you a solid initial profit buffer before you factor in other costs.
For more competitive niches, you should price against the market. Search for your item on eBay and filter by "Sold Items." Analyze the top 5-10 recent sales to find the current market value. Price your item within that range based on its condition.
Calculate your actual profit
Your goal is a net profit margin of 40-60% after all expenses. One thing that trips up new sellers is forgetting fees. Your total cost is not just what you paid for the item; it includes platform fees (10-20%), shipping supplies, and any ad costs.
For example, a $50 sale might look like this: $25 item cost + $7.50 platform fee + $1 shipping supplies = $33.50 total cost. Your net profit is $16.50, which is a 33% margin. You might need to price higher to hit your target.
Here are 4 immediate steps to take:
- Research sold prices for five similar items on your chosen platform.
- Calculate the keystone price for three of your inventory items.
- Create a spreadsheet to track your cost of goods, platform fees, and shipping.
- Set a target net profit margin (e.g., 50%) for your next batch of inventory.
Step 10: Control your quality and scale your operations
Establish your quality standards
Your reputation depends on consistency. Create a simple quality checklist for every item. It should confirm that you have at least five clear photos, accurate measurements, and a detailed description that notes any flaws. Many sellers hurt their ratings by rushing this part.
A key metric to watch is your "item not as described" rate on your seller dashboard. Aim to keep this under 2%. If it starts to climb, review your recent listings to find the cause. It usually points to an issue with your photos or descriptions.
Know when to grow
Once you consistently ship over 15 items per day, your home workspace may become a bottleneck. This is a good signal to start looking for a small commercial space. Also, when your monthly revenue surpasses $5,000, you can revisit the idea of hiring a part-time assistant.
With an inventory of over 200 items, manual tracking can lead to errors like selling an item you no longer have. You might want to consider a cross-listing service like Vendoo. It helps you manage listings and inventory across multiple platforms from one place.
Here are 4 immediate steps to take:
- Create a 5-point quality checklist for every item you list.
- Check your seller dashboard for your current "item not as described" rate.
- Set a daily order volume that will trigger your search for a workspace.
- Research a cross-listing service like Vendoo to see if it fits your needs.
Starting a reselling business is about more than the thrill of the hunt. Your success will come from building a solid process for everything from listing to shipping. The steps are laid out for you, and now it is time to take the first one.
As you make those first sales, especially in person, you will need a simple way to get paid. JIM turns your phone into a card reader for a flat 1.99% fee, with no extra hardware. Download JIM to get started.
