Based on over 12 years of experience in the Antiques Trade, this guide will show you how to flip used goods for a profit. Whether you're a seasoned flipper or just starting, follow these fundamental principles to boost your income.
Three Fundamental Principles
Knowledge Is Key: You have to know more about the value of the item you're buying than the person who is selling it. Profit is made at the point of purchase, so knowing that you can get more for the item than the seller is crucial.
200% Markup: Aim for items that have a 200% markup stitched in. This allows you to cover your business costs with 100% and make 100% profit.
Put in the Effort: Be prepared to make more effort selling the item than the person selling it to you.
How to Make a Profit
To succeed in flipping, you need to become an expert in a specific niche. Start by identifying a subject you already know about or are interested in, like clothes or 80’s music. Use online marketplaces like eBay, Etsy, and Vinted to understand what's in demand within your niche. Study successful sellers' stock and sales to identify trends.
Setting a Schedule
Decide on the amount of time you're willing to dedicate to your flipping business. This could include hours for listing and shipping items, as well as for sourcing stock. Make sure to diligently invest this time.
Funding Your Business
You'll need some initial capital to buy your stock. A simple way to start is by flipping items you already own. You can also cut back on non-essential expenses and allocate that money to your business. It’s essential not to borrow money on credit cards to fund the business, as this can drastically reduce your profit margins.
Where to Buy
Auctions: Clearance auctions are often the cheapest place to buy stock. Look for job lots to get the best deals, but be choosy – cheap stock that you can't sell is still tying up capital.
Thrift Stores, Charity Shops, Car Boot Sales & Garage Sales: These often have underpriced goods, especially if the sellers don't recognize the value. Be cautious, though, as some items may be overpriced.
Online Marketplaces: Websites like eBay, Craigslist, and Facebook Marketplace can sometimes have underpriced goods. However, competition is high, so finding bargains can be difficult.
Inspect & Authenticate
Always ensure items are genuine, especially if dealing with brands or collectibles. Check for damage or restoration, as this can significantly impact resale value.
Calculate Costs & Potential Profits
Factor in all costs, including buying price, listing fees, shipping, packaging, and potential returns. Aim for a 200% profit margin to cover your costs and make a profit.
Negotiation
When buying from an individual, let them set the price point. If the price is too high, politely walk away. If the price is reasonable, take your time to agree.
Where to Sell
Buy locally where competition is low and sell nationally or internationally where competition is high. Platforms like eBay, Amazon, and Etsy are good options, depending on your niche.
Presentation, Pricing, and Customer Service
Clean and refurbish items for better presentation. Use good images and detailed descriptions. Check comparable SOLD listings to determine a competitive price. Provide excellent customer service by shipping quickly, responding promptly to queries, and handling returns professionally.
Grow Your Business
Master one niche at a time, then expand to others. Re-invest your profits and hold back at least 10% to increase your stock base. Stay up-to-date with trends, demands, and pricing, and rotate stock that hasn't sold within a year.
Legal & Financial Considerations
Depending on your country and area, you may need to notify authorities of your business. Keep records of all transactions for tax purposes and ensure you report earnings and pay taxes accordingly.
Conclusion:
Like any business, flipping requires effort, research, and sometimes a bit of luck. Start slow, learn from mistakes, and continually refine your strategies. The longer you do it, the more money you'll make!