This month alone, I sold 7 items that yielded at least a $100 in profit (per item). Sounds promising, right?
Secret sauce – PAY UP!
This may sound like a broken record but.. paying up is not everyone’s cup of tea due to high cost and higher risk. However, with proper execution, the high cost can equal to higher profit margin. The risk can also be lowered if you are searching for high demand brands.
So, how exactly do you determine “what’s worth paying up”?
It all comes down to Four Habits. These habits are responsible for Dress Confidently’s monthly gross sales of about $8,000 with a net profit of $3,000.
Habit 1: Focus on a category.
You can even be more specific and find a niche. For example, your selected category may be dresses and your niche can be career pieces, boho styled dresses, cocktail wear or evening gowns.
Paying up can easily add up so you need to spend wisely. By focusing on a category or a niche, you can be selective and not pick up everything on sale. It will also save you time if you are sourcing in a thrift store or big retail stores.
It is true that it’s better to have more selection. But, if you are still testing the market and not familiar with what are being sought after, it is a dangerous game to just pick up random items.
Remember, you are an entrepreneur, no one else is going to motivate you, but yourself. That motivation may start to fade away if your items are constantly just sitting around.
So, be selective and source with an intention.
Habit 2: Research what brands are currently selling for that category.
Believe in the power of comps.
By now, you should already know how to check for completed sales (also known as “comps”) in the reselling platform you’re using.
Please do not let other resellers dictate you what brands to pick up. It is okay to listen and learn from others but don’t heavily rely on them. Here’s why:
If you want longevity in this career, then you need to learn, on your own, what brands to source. Just put it this way. What will happen if that reseller suddenly stopped selling or stopped sharing?
Once you learn how to check for comps and use it to your advantage, then you are already one step ahead from others who are not utilizing this vital tool.
How to Research for Trending Brands
Since you’re paying up, you would want to look for brands that buyers are already paying top dollars for. For this example, we will use Poshmark. Tradesy and Mercari have similar feature but may just be worded differently.
- On Poshmark, if you’re using the app, go to the “Shop” tab.
- Scroll down until you see the category you want to research. For this example, we’ll search the brands for “Dresses”. So, under “Women”, you can select “Dresses”.
- Look for the “funnel” icon on the top right side. Make sure that nothing was selected under “Size”. Under “Availability”, select “Sold Items”.
- Paying up means higher cost of good so you will want to search for items that were sold for $100+. Using the filter for “Price” , select the prices above $100.
- Right next to the funnel icon, you will see the “sorting” arrow. You can sort it by “Just Shared” or “Just In”.
- Be very cautious on sorting it by “High to Low”. Both Poshmark and Tradesy don’t display the dates for when an item was sold. An item may have been sold for $1000 but we’ll never know exactly when it was sold. By sorting through “Just In” or “Just Shared”, you can at least feel confident that it was just recently listed.
After you follow the above steps, it will lead you to brands that buyers are paying up for. Keep a list of these brands so you can refer to it for your next sourcing trip. Or, if you’re sourcing online, you know exactly what brands to look for.
Habit 3: Set a budget and predetermine your profit.
You got your category. You know what brands are selling.
Now, it’s time to spend but don’t spend blindly.
Predetermine your potential profit so you know exactly whether to pick up an item or not. If you already know how to do this then that’s awesome!
If not, you can use this Sourcing Calculator to help you come up with your number. Here’s the google sheet link for it: Sourcing Calculator Google Sheet Link
Open it up and test it so you can follow along with this scenario:
Scenario: You found a NWT Reformation Jumpsuit for $45 (Cost of Good). When you check comps on Poshmark, you found that the same jumpsuit was recently sold for as low as $80 (lowest) and as high as $200 (highest).
You can easily plug in those numbers on the shaded yellow area as shown above. That is the only part you will need to touch.
After inputting those data, it will automatically calculate your potential lowest and highest profit. Profit is already after selling fees and cost of good. With Mercari, please keep in mind that this assuming you are passing the cost of shipping to the buyer. If you are offering free shipping, then plug in your shipping cost.
So, how about that? What do you think about those numbers? Are you willing to spend $45 and potentially receive $115 in profit and lowest being $19?
If comps are not available, then you can also input the lowest amount you are willing to accept and highest being your actual selling price.
Habit 4: Look for potential competitors & price competitively.
You are selling online meaning buyers will be shopping online. Huh? What…
It means that you have to be aware whether your item is already being sold by someone else for a lower price.
For example, let’s say you found a $25 NWT Gal Meets Glam (GMG) Blythe Dress Sz 10 (retail: $198). When you check Posh, you saw that 5 more Poshers have the same dress and selling it for less $50. A quick google search showed that the same dress is still available in Nordstrom Rack for $45.
While $25 for a GMG dress is an amazing price, it may not move quickly due to your competitors. Your profit margin will also be lower since you will have to price your item for as low as $50 until your competitors are out of stock.
You are one lucky seller if your potential buyer does not know how to look for similar item within that reselling platform. Just a friendly reminder, online shoppers will always be online shoppers. They will look everywhere else for the best price available.
In contrast, if you’re the only one who has that item, then you are free to price it according to your judgment or based on what has already been sold that is similar to what you have.
To recap, if you’re starting out, focus on a category/niche so you don’t overspend. Research the most popular brand that is selling for that category. Set a budget and predetermine your profit. Lastly, look for competitors and price competitively.
These are the four habits that I personally practice. If you follow my Instagram story and see my reselling wins, then you already know how I’m doing it. I hope you guys find this post useful and wish you the same success.