Buying and Selling the Right Products

November 4th, 2014 by Jason Hartman | Comments Off on Buying and Selling the Right Products

People are more excited than ever about the possibility of working from anywhere. Established jetsetters and young graduates alike are keen on the idea of making money by working for themselves in a location of their choosing–and it is more possible than ever.

While businesses can take on many forms, buying and selling remain essential components of both. If you are prepared to begin a business, you’re going to have to choose a product to sell–and this may mean a number of things. When you’re thinking about products, it is important to note that you need to think about a specific product rather than just a niche.

Defining product

Your product should be narrowed down even within the niche in which you will operate. While not all niches are created equal, they all contain profitable products that tend to do well. This focus can make a new business seem less overwhelming. It can also be small enough to give you some side income–it needn’t be your full time job if that’s not something you’re interested in. If you are successful, you may later consider branching out.

Identifying your product

Not all products will make money and not all of them will be easy to sell. Identifying a product that will work for you is your first step to business success. It may seem silly to think about actual object size and shape, but it can be important. Good products tend to be small, light, and mobile.

Good products are extremely specific–you won’t sell pillows but goose down couch pillows. If you’re new to business, you’ll probably want to sell things that don’t cost a ton of money–think $200 and below. They’re affordable for everyone and tend to have a high profit margin, but you should make sure you’re selling for at least double the cost of purchase. They also seem to maintain buyers, ideally through all seasons and economic trends.

Avoid products that are overly mechanical, need warranties, and are sold at larger retailers for similar prices. As with any investment, you’ll want to minimize risk. Avoid fragile products, trademarked products that will get you in legal trouble, and products without universal appeal.

Price checking

We’re very luck to live in the age of information, so take full advantage of it in all of your investments. Do your research and check around for price comparisons. You’ll want your product to be competitive but you’ll also want it to make you money. Amazon and Ebay are great places to start your research and establish a price point for your product.

Finding a supplier

For every product you decide to sell, you’ll need to find and contact at least three suppliers–more, if you’d like. You’ll be in touch with salespeople who can feel pushy, but don’t be intimidated by them. They’ve got answers and you’re not obligated to buy from them. As you begin your communications process, create a separate email to avoid spam in your primary account.

Identify the suppliers that look promising to you and begin contacting them. Email or use a contact form that asks for general information and explains who you are. Ask for a price list, shipping information, payment details, and a sample of the product. Suppliers will typically be quick to respond to your request, as it means business for them.

Response time is a pretty good way to evaluate potential suppliers, so this should help you narrow your list to two or three suppliers you can test out. Purchase samples, making sure that you’re paying through a reputable service that provides records so that you’ll be protected from scams. You’ll also need to think about minimum order quantities and your ability to place an initial order, especially if this is a new business.

Once you’ve chosen a supplier, you’ll probably have to negotiate a little bit. Everything in business is negotiable, so don’t take anyone at their word when they say that rates are firm–they’re not. To negotiate the best price, you might say that another supplier is offering the product for a quarter less or negotiate cheaper shipping costs for continued business.

While many suppliers are similar, it’s important to find one that you are able to develop a good working relationship with. You’ll work closely with them for the duration of the life of your business, so don’t be afraid to shop around.

Selling your product

Once you’ve been through all the nitty gritty of product supplier selection, it’s (nearly) time to begin selling your product. First, make sure that the sample products you received are up to par. If they’re of low quality, your customers will complain and you won’t be able to build a strong reputation as a good businessperson.

Before you place a bulk order, sell your samples and wait for feedback. If something is very wrong with a product, your customers will let you know and you can address the problem before you’re stuck with 200 or them. Limit your risk by testing things first.

Congratulations! You’re now ready to sell your product. List it on eBay, Amazon, etc. from your seller account. Get those samples out there and wait a week or so after they’ve been delivered. Because your samples cost you money and shipping, you probably won’t begin making money when you sell them–but it’s an important part of the process.

If you’ve listed your products, conducted your research, and written good, clear copy, you should be making sales. If you aren’t, it may be time to reevaluate price, product quality, etc. Solve any problems you may have before you order in bulk. You may also find that your product simply isn’t in demand. While you may be frustrated at your wasted time, you should understand that this is simply part of growing a business. As you continue to buy and sell products, you’ll find that your business sense also grows. It does get easier.

For more information and next steps in the buy and sell process, read next week’s “Part 2” article.

(photo credit: Nic Taylor Photography via photopin cc)

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