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Reselling: Get into trading with low capital

Even though many think about taking the step into self-employment, only a few actually make it. The reason for this is probably the many prejudices associated with starting a business. Be it the supposed lack of start-up capital or economic know-how, the fear of failure or the high bureaucratic effort. According to a survey from 2020, the first plays the most important role: the lack of start-up capital.

Of course, it is not unfounded to assume that starting a business involves certain investments, which are larger or smaller depending on the size of the business. So one could say that the smaller the start-up capital, the smaller the business. But isn’t a small business that grows slowly and can be run part-time without a large time investment better than not getting started at all? After all, in this phase you gain an incredible amount of experience and can avoid expensive mistakes, since the cash flow is still very low.

This article is about exactly that, in relation to online trading. Because although it is basically a very capital-intensive business, there is an entry option that works completely without start-up capital. We are talking about reselling, i.e. trading with second-hand goods/merchandise via marketplaces such as Amazon, Ebay and Co. The basic principle behind reselling is to specifically look for offers that can be upgraded, that are offered too cheaply, are to be given away or can be sold at a higher price for other reasons. This approach initially only applies to second-hand goods, but can also be applied to trading goods, remaining stock and mixed pallets when the business expands. For example, you can buy pallets with returns from Amazon from certain wholesalers.

To search for offers, one basically searches on marketplaces with a smaller clientele (e.g. flea market, Ebay classifieds, wholesalers) and then sells the purchased products with a professional offer on marketplaces with a larger clientele (e.g. Ebay or Amazon). Example: Products at a flea market can only be sold to the visitors there, i.e. a few hundred or thousand people. So the demand, at least for general flea markets, depends on luck and is not particularly high, especially for special products. However, if you sell a product on Ebay, it is available to millions of customers and is even played to the target group when they search for it. The demand is therefore significantly higher, which ultimately means that a more expensive price can be charged.

The general demand for such products, for example, is quite low, but a marketplace can still be used to address exactly the right target group.

Tip: What you don’t do in reselling is buy products from large marketplaces in order to offer them on smaller ones. If you are really well versed in certain product areas (e.g. sneakers, stamps, clothing, etc.), poorly marketed offers can be bought and offered again on the same marketplace with optimised marketing. However, this requires a certain expertise.

These are the achieved sales prices of two offers with exactly the same product.

The basic principle behind reselling should now be clear, but how does one start in concrete terms and can this work at all without start-up capital?

Offers to give away

The longer a household exists and the more people live in it, the fuller the cellars and bookshelves usually are. It is not uncommon for families to want to get rid of these piled-up products in one fell swoop and offer entire boxes on Ebay classifieds as an ad to give away. Books in particular are popular items to give away, as selling individual copies is too costly for most. These boxes can be collected, more valuable books sold individually on Ebay and the rest sent bundled to Rebuy or Momox. This method can usually raise enough seed money to buy the first real items.

Clean out yourself

Collecting many products over time may also apply to you. So it can’t hurt to go through your own things or clean out your cellar. You can often find interesting things there that you might not have thought there was a market for. Most of the time, however, you can always assume that for every product in good condition there is a demand somewhere that can be met on marketplaces like Ebay. This is because people search there specifically for special, rare or used products.

Important: These methods are especially important in the beginning to build up some start-up capital. If you want to earn money with reselling in the long term, you should choose a specific area and become an expert there in order to find the best offers both on a small scale and in the B2B area.

General requirements for the start

As for any other self-employment, a trade must be registered for reselling. This costs about 15-65 € and usually works online. If you don’t have the money for this yet either, you can register the business after selling your own items. However, as soon as you buy products to sell them for a profit, you need a trade licence.

This is followed by tax registration. This is a form from the tax office that must be filled out in order to obtain a tax number and VAT ID. A VAT ID is not legally obligatory, but must be applied for as a reseller, as this number is required for sales on marketplaces. The small business regulation can still be claimed. Now all that remains is to open a business account (e.g. online at N26) and register for buying and selling on all relevant marketplaces.

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