How to Become a Reseller: Make Money Selling Online

A reseller is a critical link in the commerce chain, purchasing items from manufacturers, dealers, and other businesses and individuals, and offering them for sale to consumers. Resellers may do business on major platforms like Amazon and eBay or via smaller outlets.

There are real profits to be had by setting up a resale ecommerce business. However, starting a new business as a reseller requires taking the right steps professionally, such as finding capital to make an initial purchase of inventory, establishing a supplier network, and marketing your inventory as a reseller. Read on to discover if this career could be right for you.

What Is a Reseller?

Resellers buy merchandise, such as clothes, shoes, toys, electronics, jewelry, and appliances, and resell it on online marketplaces or physical discount stores for profit. Online resellers often buy merchandise in bulk and at a discount from wholesalers and manufacturers. They then resell items individually on digital platforms like eBay and Poshmark. Reselling can be a profitable business to start in 2026.

Because the reseller does not manufacture the goods they sell, they typically have no production costs. However, they can face steep marketing costs. Depending on how well a seller manages these costs, they could see a steady stream of profits flowing into their checking account.

Resellers in some markets, such as luxury goods or in collector markets, such as the watch or vintage furniture market, often have a background in the product category and are experts in their field. They use this expertise to ensure the products they trade are authentic and not fake.

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How Does Reselling Work?

Resellers first have to source their merchandise or inventory. Some may seek liquidation pallets of customer returns or overstocks from big retailers. E-commerce resellers then market their inventory on their platform.

Once customers purchase products, the reseller ships packages and manages returns. Other than buying inventory, shipping and managing returns may be the biggest expenses for resellers, so they build these costs into their markup on the items they sell.

For luxury goods, like collectibles, watches, jewelry, and high-end fashion, resellers must authenticate the products to show that they are not fakes. Some buyers may only buy these items from dealers they know are trustworthy.

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How to Make Money Reselling in 5 Actionable Steps

1. Choose Your Niche and Target Audience

Many resellers have a specialty, and for a newbie reseller it may be wise to focus on one or two categories of product. Choose something that you are familiar with, and research the market. Do an advanced search on Ebay to see “sold” prices for the category you are thinking about — don’t just look at the prices sellers are asking for their merchandise, as there is no guarantee the item will actually sell. Consider whether you would have a lot of competition if you sold a particular item.

As you are selecting a niche, you’ll need to think about where you will store your inventory (don’t choose furniture, for example, if you live in a studio apartment and don’t want to incur the cost of a storage facility).

2. Source Your Inventory Strategically

There’s only profit in reselling if you can sell items for more than it costs you to purchase them. If you are thinking about selling vintage pottery or vinyl records, for example, consider where you would source those items locally, or whether you would need to travel to purchase large lots of merchandise from, say, an auction house.

3. Pick the Right Online Sales Platforms

Many sellers sell on more than one platform, but if you’re just starting out you’ll want to focus on one or two platforms as you get on your feet. Online sales platforms such as Etsy or Vinted allow vendors to sell many categories of product. But if the audience isn’t there to purchase, a platform might not be the right place for you. Again, checking “sold” prices can give you a sense of the type of merchandise that actually moves on a platform and whether it sells for the asking price or less.

Some platforms to consider include:

•   Craigslist

•   DePop

•   Discogs

•   Ebay

•   Etsy

•   Facebook Marketplace

•   Mercari

•   Poshmark

•   The RealReal

•   Ruby Lane

•   Vinted

4. Price Your Products for Profit

As you begin to list your items for sale, you’ll make the crucial decision: how to price them. If you’ve done your “sold” research, you’ll have a sense of what you can command. You’ll need to factor in a profit for your work or your business will just be treading water. As you think about your profit margin, don’t forget to add in costs such as the gas you bought for the car you drove as you combed tag sales, or the storage locker you had to rent to hold your merchandise.

5. Streamline Your Shipping and Fulfillment

Resellers often live and die by online customer reviews, and if you don’t have a solid shipping operation in place, you will garner one star at best. You need to be able to pack items securely and send them out the door quickly. Shipping — both supplies and postage — can be costly, so you’ll either need to charge for shipping or offer free shipping and mark up your item accordingly.

Some resellers will choose to sum up all their ideas for their shop by writing a business plan; others will just dive in and see what merchandise they can move.

What Are the Best Reselling Industries for Beginners

Practically any item you need or want can be found on the secondary market. The key isn’t what to sell so much as how to make money from reselling. As you consider how to make money reselling, try to pick a category that you have some familiarity with, and one where there is good customer demand. Bonus points if you can carve out a category where competition is limited. These are some common resale categories.

•   Apparel

•   Shoes

•   Luxury goods (high-end fashion, handbags, jewelry, and vintage jewelry)

•   Collectibles (wine, art, watches, whiskey, vintage cars)

•   Household goods (exercise equipment, household appliances, furniture)

•   Technology goods (smartphones, tablets, and tech accessories)

•   Electronics (stereo components, home entertainment systems)

•   Video games, DVDs, and Blu-ray discs

•   Vehicles

•   Baby products (toys, strollers, accessories)

•   Musical instruments

•   Power tools and garden equipment

Depending on what product you select to resell and how much time, energy, and investment you put into your business, reselling could be a job that pays daily or one that provides only occasional income.

How Much Does it Cost to Start a Reselling Business?

Startup costs for resellers mainly involve sourcing inventory, storage, marketing, and shipping.

•   Inventory: The costs for inventory will depend on what you are selling. You will need significant capital if you plan to resell high-end items like designer handbags or jewelry. Clothing resellers will need capital to buy oversupply or liquidation pallets from big retailers like Nordstrom Rack, Costco, or wholesale clubs.

•   Storage costs: Resellers need to store their inventory, particularly if they buy in bulk from wholesalers.

•   Marketing: Marketing costs run high for resellers and focus on email outreach and ads, often on social media platforms like Facebook, Instagram, and TikTok.

•   Shipping: Shipping and returns may be the highest cost for resellers. Vendors need enough capital to ship items and cover returns costs.

Navigating Reseller Taxes and 1099-K Rules

When you buy and sell as a reseller, you are essentially opening a business, whether or not you incorporate as such. So you are responsible for paying taxes on your profits. Opening a business checking account so that the funds aren’t mingled with your personal accounts can help you track your income and expenses related to your business.

Depending on how much you sell on a platform such as Ebay or Poshmark, you might receive a 1099-K tax form from the platform. This means it has reported your earnings to the Internal Revenue Service for tax purposes. But technically, even if you don’t get a 1099, you are responsible for reporting your income. This is why it’s essential to keep track of the cost of your inventory and other costs you incur, such as money you spend on gas or packing supplies. When you prepare your tax return, you’ll be able to subtract legitimate business expenses from your profits to arrive at the tax you owe.

If you’re choosing to be a reseller in order to make money from home, talk to a tax advisor about the home office deduction. “The home office tax deduction is available to self-employed people — independent contractors, sole proprietors, members of a business partnership, freelancers, and gig workers who require an office — who use part of their home, owned or rented, as a place of work regularly and exclusively,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi.

Navigating sales tax as a reseller can be somewhat complex. Resellers generally don’t pay sales tax when they purchase their merchandise. But in order to bypass paying sales tax, you will need to obtain a retail certificate to show the seller. What is required will vary by state.

When it comes to items you sell, you are required to collect sales tax from buyers if your business has a physical presence in the state in which the sale takes place. In the case of ecommerce businesses, you’ll need to collect sales tax if your business has an economic presence in the state — meaning you have a significant number of transactions or dollar value in sales there. Fortunately, ecommerce platforms such as Ebay tend to compute the tax for you. But if you are starting out and thinking about how to make money from reselling, it’s a good idea to research taxes online and consult a tax professional to help you better understand the rules.

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Reselling vs Dropshipping: Which Strategy is Right for You?

As you explore how to become a reseller you’ll probably run across references to dropshipping. Reselling is different from dropshipping because the former requires owning and storing inventory, while a dropshipper is more of a middleman. Here are the key differences between dropshipping and reselling.

•   A reseller buys stock from wholesalers or distributors to sell at a profit.

•   Dropshippers don’t ever take physical ownership of products. They accept orders from customers and then buy the products from suppliers who package and ship the products to the customers.

•   Dropshippers require less capital than resellers because they do not buy or stock significant inventory.

•   The potential returns for resellers are higher than for dropshippers. Because resellers buy in bulk, they pay less per unit to their supplier and add more mark-up. Dropshippers often may buy single items, which can be more expensive.

•   Reselling is riskier because merchants may be left with inventory that they cannot sell but that they have paid for and still need to store. In this situation, it could put a strain on money in your traditional or online bank account.

What are the Primary Benefits of a Reselling Business?

The beauty of reselling is flexibility in the products offered and the ability to run one’s own operation. However, the success of a reseller largely depends on the relationship between the reseller and the suppliers. If you can succeed at that, you may well be taking a step towards making quick cash.

•   Resellers can make money without having to manufacture a product.

•   Once a reseller has established suppliers, they can grow the business by acquiring more products and customers to sell them to.

•   Reselling is flexible. Merchants can change the products they offer according to market demand and depending on how much inventory they carry.

•   Reselling can be a way to make money from home.

What are the Potential Drawbacks of Reselling?

The disadvantages of reselling are that merchants must work hard to build a network of reliable suppliers, and a steady income is not guaranteed.

•   Finding inventory at the right price could be difficult until a reliable supply chain is established. This could drain funds in your savings account if you haven’t planned adequately.

•   Resellers must work hard to negotiate deals with suppliers and build relationships.

•   Quality control may be difficult because sending products back to manufacturers will mean delays for customers.

•   Shipping and storage costs can be considerable.

•   Your earnings may fluctuate, especially if you sell seasonal products, requiring you to create an irregular income budget.

•   Resellers are self-employed and have no health or retirement benefits from an employer.

Whether you can work from home depends upon your particular situation and the kind of items you are hoping to resell. If working from home is an important consideration, it might make sense to focus on small goods, such as fashion accessories, that don’t require much storage space.

What Are Some Financial Alternatives to Reselling?

Becoming an entrepreneur and achieving financial freedom by reselling can be an attractive idea, but it’s not for everyone. If reselling sounds daunting to you, take heart: There are ways to make money online without selling anything. You might consider writing or doing design work, monetizing a YouTube or Twitch channel, or becoming a product tester, for example.

The Takeaway

Reselling involves purchasing goods from a manufacturer, wholesaler, dealer, or other source and then selling it to consumers. Typically, the selling happens online. This is a broad industry and a competitive one, but the flexibility of the work and ability to scale quickly can be major benefits. The disadvantages are similar to any entrepreneurial venture. New resellers must find capital to set up their business, buy inventory, and market that inventory.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What are the best items to resell for a profit?

The best items to focus on when reselling products for profit are those that have a high potential markup because they are highly collectible (think vintage designer fashion or high-end furniture). Electronics, including vintage video game consoles and video games, can also bring high prices. When reselling these items for profit, it will help to choose a category where you are already somewhat familiar with the collectible marketplace.

How much money can you actually make as a reseller?

Reselling products for profit can be a replacement for a full-time job, but it will take time to establish sourcing and learn how to make money as a reseller. It’s best to resell on the side until you are confident that your income is sufficient and you can afford to leave your full-time or part-time job. Remember, you will not receive employer benefits and contributions as an entrepreneur.

Do you need a business license to resell products online?

Whether you need a business license to engage in reselling products for profit online depends on state and local laws in the area where you have your business. Most resellers who use online platforms do not need a federal license to sell, unless they sell a federally regulated product such as fish and wildlife or alcohol.

Is it legal to buy retail items and resell them for a higher price?

It’s legal to resell a physical item that you legally purchased for whatever price the item will command. You could get into trouble, however, if you market an item that is fake as real (think: designer watches, handbags, or fine art). Another possible pitfall: Selling an item that is expired (such as food) or recalled (such as an electronic device), as these may prove hazardous for a purchaser.

How do taxes work when you make money from reselling?

When you make money as a reseller you are required to pay taxes on the income, and online platforms will typically send resellers who earn above a certain threshold a 1099-K tax form to help with tax preparations. But even if you don’t receive a tax form from a platform, you are technically on the hook for taxes. You are also responsible for collecting sales tax from customers who purchase your item. Many online platforms will help with this part of the process.

Photo credit: iStock/Iryna Mylinska

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