Buying & reselling for a profit. What's the catch?

JackieChang

A certain product is very cheap to buy overseas but you can sell it at a high markup here. I'm thinking about importing this product in bulk and selling it for a profit. Customer service should be minimal, I'm pretty sure I won't need to deal with any customer queries or complaints after purchase is made.

This seems very easy, which is why I came here. It's too easy. Is there a catch? Basically I just need to know what to look out for while buying and selling online and trying to make a profit. (By the way I've been wheeling and dealing online for years, just not for profit)

Also, these products are not from outside the EU.

jimmii

Is the market big enough to to bother? It's possible you're the first to come across it but it's more likely that's its just not as possible as you think.

dudara

You'll need to consider import duties & VAT, plus the cost of shipping. Will there still be as high a margin after they are factored in?

SixSixSix

dudara wrote: »

You'll need to consider import duties & VAT, .... Will there still be as high a margin after they are factored in?

JackieChang wrote: »

Also, these products are not from outside the EU.

Within EU?

jimmii

SixSixSix wrote: »

Within EU?

Sometimes you do come across sellers positing as EU based and then get stung when it actually comes from China so wouldn't rule it out if the margins seem to good to be true.

mrawkward

jimmii wrote: »

Sometimes you do come across sellers positing as EU based and then get stung when it actually comes from China so wouldn't rule it out if the margins seem to good to be true.

Easy test, Ask them for their EU VAT number!

dudara

SixSixSix wrote: »

Within EU?

Apologies, for some reason I read that the other way. However, it's still worth checking that the goods are coming from within the EU.

Depending on your turnover, you may also need to register for VAT. If you buy as a consumer you will be charged VAT, but you can use the reverse charge mechanism if registered.

A lot depends on the expected values.

Dades

Do you have any kind of marketing plan? Marketing costs are a substantial chunk of any online sales budget and unless you introduce the customer to your product you won't sell anything. Is your market easily targeted?

Bandara

The most obvious problem of this to me is that there is very likely an exclusivity deal in place for Irish distribution already ?

mrawkward

Bandara wrote: »

The most obvious problem of this to me is that there is very likely an exclusivity deal in place for Irish distribution already ?

No problem with "grey" import of goods sourced within the EU. It you can source the product and have it landed here at a very attractive price that yields a juicy margin, just do it. This is all about backing your own judgement and taking whatever risk is involved, if you are wrong, you lose.

JMR

JackieChang wrote: »

I'm pretty sure I won't need to deal with any customer queries or complaints after purchase is made.

I'm pretty sure you will!

At a minimum you need to have a plan for customer service / returns. Even if you are not the type of person to return goods bought online, plenty of people will return goods and you need to have a plan in place that is legal and works from both your perspective and the customers.

You need to consider the following...
Market size - can you sell to the UK? Is there an exclusive distributor there? (Ireland is a small market)
Cost of goods / currency fluctuation?
Cost of shipping goods to your location
Cost of storing goods
Cost of insuring your stock
Cost of website build / hosting
Cost of customer service - who will answer the phone when it rings?
Cost of payment processing - PayPal / Stripe / Merchant account etc
Cost of shipping to your customer - Most expect free shipping
Cost of marketing your products / SEO
Cost of returns

If you cover all of the above and can still sell at a healthy margin, you're sorted.

I would advise selling on ebay to begin with to prove a market exists before you spend on anything other than an initial small order from your supplier.

Best of luck with it

Bandara

JMR wrote: »

I'm pretty sure you will!

At a minimum you need to have a plan for customer service / returns. Even if you are not the type of person to return goods bought online, plenty of people will return goods and you need to have a plan in place that is legal and works from both your perspective and the customers.

You need to consider the following...
Market size - can you sell to the UK? Is there an exclusive distributor there? (Ireland is a small market)
Cost of goods / currency fluctuation?
Cost of shipping goods to your location
Cost of storing goods
Cost of insuring your stock
Cost of website build / hosting
Cost of customer service - who will answer the phone when it rings?
Cost of payment processing - PayPal / Stripe / Merchant account etc
Cost of shipping to your customer - Most expect free shipping
Cost of marketing your products / SEO
Cost of returns

If you cover all of the above and can still sell at a healthy margin, you're sorted.

I would advise selling on ebay to begin with to prove a market exists before you spend on anything other than an initial small order from your supplier.

Best of luck with it

Excellent advice.