The ongoing pressure from inflation has a lot of people looking for ways to save money. And with many now turning to second-hand items, it's been the perfect opportunity for online resellers to make some extra cash on their pre-loved home goods, sports memorabilia, and clothing.
According to ThredUP, an online resale platform, nearly 52% of consumers shopped secondhand apparel in 2022, and that number is expected to rise in 2023. The trend is so strong that ThredUP predicts the U.S. secondhand market will reach $70 billion by 2027, meaning there is plenty of money to be made by selling those gently used items collecting dust in your closet.
If you're looking to get into the resale game, here are some ways to ensure you're getting the most bang for your buck.
How to make money reselling your stuff
What to sell
The first step is to go through your home and collect the items you no longer want. This allows you to dip a toe into the resale world without making the financial commitment of buying inventory for your side hustle.
It's also a good idea to ask your friends and family if you can sell their unwanted items. Many people have gently used clothes or home goods that they want to unload, but don't want to do the work involved with posting them online.
"Whatever you make, invest it back into the business. That's how to get started without investing capital at the beginning," advises Chloe Binetti, who has been reselling handbags since 2012 and is a former Poshmark Ambassador, for which she says she was not compensated.
When you're ready to take the next step and buy items to resell, there are a few things to consider. Whether you're buying from a thrift shop, garage sale, estate sale or online marketplace, be sure to source items with lower prices. Resist the urge to overpay for an item, even if you believe it may resell for more. You can't be certain the item will provide a positive return on your investment, and purchasing it at a low price allows you to make more money or pass on the discounts to your customers.
Knowing what's popular and trendy is important to consider when sourcing items. Not all brands are created equal when it comes to reselling, and according to ThredUP, the top-performing clothing brands include:
- Torrid
- Lululemon Athletic
- Madewell
- Zara
- Free People
While it's important to follow trends, reselling items that are niche or cater to a specific audience can be a great way to increase your profits.
"Remember, you only need one buyer. If you buy something 100 people are reselling, you're limited to the price range set by other people," says Binetti. "But with a one-of-a-kind or special piece, you have more ability to price it higher."
How to sell
Choosing the right price for your items can feel like a daunting task, so it's important to go online and compare the prices of similar items. "Market research is important," says Binetti.
While the instinct may be to price an item low to attract buyers, Binettii warns that that could limit your earning potential. "When people buy [used] items, they always have the expectation to haggle, so give yourself room for haggling," advised Binetti. "If you buy something for $200 and you want to resell it for $300, after haggling you may be down to $250, so give yourself room for negotiation."
The most successful online resellers also know that presentation matters. Photos of the items you want to resell should be clear, well-lit, and cropped. When it comes to clothes, take a few pictures wearing that dress or suit you're trying to resell. People like to see how clothing fits and are more likely to buy if you model it for them.
Remember that transparency is paramount when listing items to resell. "Show pictures of the defects. People complain if there is a knick or pen mark they didn't know about, and that can lead to it being returned," says Binetti.
Where to sell
No matter who you are or what you collect, there is a platform out there for every kind of reseller.
When selecting where to sell your stuff, it's important to pay close attention to the fees each platform charges you for listing, shipping and processing your items. For example, Facebook Marketplace doesn't charge a fee for listing or selling any of your items, but you'll have to pay a 5% fee (with a minimum of $0.40) for shipping an item. Etsy, on the other hand, charges a listing fee of $0.20 per item for sellers using the free version of the marketplace.
Facebook Marketplace
Fees
There are no fees for listing or selling items, but there is a 5% fee (or $0.40 minimum) if you choose to ship an item.
Shipping costs
Either the buyer or seller can cover the cost of shipping; Facebook charges a 5% fee (or $0.40 minimum) for shipping items, which can be paid by the buyer or the seller.
Availability
There's a web version of marketplace on Facebook.com. You can also use marketplace through the Facebook app, which is available in both the App Store (for iOS) and on Google Play (for Android).
How do you get paid?
If you're using shipping as the delivery method, you'll need to enter your bank account information in order to get paid. After you've marked an item as shipped, it will take a few days for you to see the money in your bank account. If you're doing delivery in-person, you and the buyer can determine the payment method, such as cash, Venmo, etc.
Pros
- No commission or payment processing fees
- Since most people shop on marketplace based on region, you often won't have to deal with shipping
- You can easily post listings if you already have a Facebook account
Cons
- There's a fee for shipping items
- Your items will likely only be viewed by people in your surrounding area, so it could be harder to find buyers depending on where you're located
Etsy
Fees
There's a free version of Etsy and a Plus Plan that costs $10 a month. Free users have to pay a listing fee of $0.20 per item. Plus Plan users get 15 monthly listing credits. There's also a transaction fee of 6.5% per item. For US sellers, there's a payment processing fee of 3% plus $0.25.
If you're selling an item in-person and accepting an in-person form of payment, you'll need a Square card reader and will pay a 2.6% fee plus 10%.
Shipping Costs
The cost of a shipping label depends on the origin, destination, weight, mail class, package type and dimensions of the package.
What devices is it available on?
Etsy is available on the web and as an app through the Apple Store or Google Play Store.
Pros
- There are millions of potential buyers looking for handmade and vintage items on the platform
- You can use it for in-person deliveries or orders
Cons
- There are multiple fees and the fee structure can be hard to understand
- You have to pay a listing fee even if your item doesn't sell
Once the money starts rolling in, it's important to remember that payments received via online platforms, such as Venmo, eBay, Etsy or Facebook Marketplace, can trigger a Form 1099-K from the IRS. This form shows the money received for goods and services from certain third-party sites, such as payment apps.
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Bottom line
There has never been a better time to dip your toe into the world of reselling. Start with the unwanted items in your home, source low, and be sure to research the going rate of similar items online before locking in your prices.
Lastly, have fun! The reselling community is dynamic and growing. There is room for everyone to participate and make money. So before you give those secondhand items away, try listing them online, and good luck!
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