Make Money Buying and Selling Used Equipment and Tools
One of the most asked questions on the internet today is the kind of businesses one can start and comfortably run on a lean budget. And, thanks to the internet and the opportunities it has brought forth, one such business that hardly requires any capital is to be a salvageable equipment dealer. Launching such a dealership business, you only need are a few hundred dollars, and you are good to go!
If you are interested in this business venture, there’s little doubt you have read lots of success stories from profit-making dealerships. A West Havre, Montana-based Shortline machinery dealer, Big Equipment, is one such brand, racking in big from this business model. There are those brands whose start was somewhat interesting, owners starting by selling their stuff to raise the required capital to operate.
How Does an Ideal Buy-And-Sell Enterprise Operate?
The mantra is easy – buy low and sell high. Mostly, smart and intelligent individuals would watch Craigslist and eBay closely, hunting for those who are moving out and thus sell their items in a huff. If you keep a close eye on them, you might be lucky enough to land on a great deal. If it’s a yard sale, you should go ahead of its opening so that you gather the best selection or at the tail end of it because that’s when you’ll get the best prices!
You must, however, define the speciality equipment of your dealership and how to go about it when buying them. Remember, even when your business merely deals in buying cheaply new or previously owned tools and reselling for a profit, the rules of the game can’t change; buy low, sell high.
Big Equipment has made quite a name for itself, so much so that over 75% of its entire revenue comes from buying and selling used equipment. According to its owner, the secret to their success is how they obtain their commodities. He says they also allow customers to trade in when buying from them, a trait that often helps them increase the inventory of older, still-new or used tools.
For the best profit margins, accept clean, good-quality equipment and upgrade them. You can fix it up, polish, and ensure it looks great before reselling the same tool for an even bigger profit. Another trick is to always watch out for almost-new salvageable goods, ordinarily available on reputable auctions – eBay, Craigslist and www.equifyauctions.com seldom disappoint.
Make Profits Buying and Selling Used Equipment
Focus on one particular niche only
In this business, you should not be a ‘Jack of all Trades’ guy. You must define your niche and deal in them. You will, however, identify your niche from the needs and wants of those around you because, after all, they are your immediate target market. Don’t be afraid to start small, but instead use it to understand the dynamics and demographics of the market.
You have to gradually build your expertise, understand the market and identify those products that sell. If you choose to buy and sell small pieces of equipment, don’t have the urge to mix that with electronics, furniture, or used clothes. With time though, you will be able to tell which items sell more and which niche is a ‘no go zone.’
Buy anything used, but still has monetary value
Low hour, the high dollar used equipment inventory, pretty much like any tool and equipment can serve its purpose excellently. ‘Old is Gold,’ so they say. And when you buy a used product cheaply and later sell it off for a profit, for sure, you’ll have made huge profits. You may, however, wait a bit longer to recoup your investment, although when the gain is attractive, then the wait will be worth your patience.
It is essential to assess and determine if a particular tool or piece of equipment will resell well. This will help determine the estimated amount of time it would take for it to resell or whether you will first have to upgrade it.
But inspect everything with utmost zest
Used tools and equipment can’t be new and thus qualify to be classified as second-hand, resalable items. However, not everything that is in the market is still valuable or resalable or can be upgraded and thus listed for sale. Someone could be disposing of an item that is useless or has no market value anymore. It is your role to determine if the commodity still has a value based on how you inspect it.
Don’t rely on the information given by the seller or what other people are saying about it. Instead, inspect each potential purchase with a keen eye, noting down its efficiency as well as any dents and detriments to its effectiveness. Woe unto you if you splurge your hard-earned cash on an old, terribly flawed piece of equipment only to realize it later.
Know the major brands beforehand
You are required not to first delve into this business if you barely have an idea about the major brands in your niche. Knowing the major brands is essential and rightly so since you will be able to tell the value of each used tool you’ve gathered.
You might buy a used item from a thrift store or online, from an auction, only to discover that people are hesitant to buy it. Or, you may over-value or under-value it and end up losing the client or profiting from it. Also, sometimes a brand has a poor reputation and scares away those looking for used commodities.
While pricing your items, never base your re-sell price on the tool’s purchase price
In the ordinary business world, your profit margin would depend on how much you had acquired a product for vis-à-vis its selling price. When it comes to the business of used commodities, however, this rule of thumb doesn’t apply.
Instead, you must consider a couple of factors. You must look at the prevailing market value of the product and whether there’s a high demand for it or not. Ideally, it is acceptable to acquire second-hand equipment for as little as $25 and sell it off for $250 or even more. Everything will primarily depend on how much research you do on its market value.
Ask yourself why the product will sell
- Why would a buyer choose a second-hand piece of equipment and not a new one?
- Why pay for an upgraded tool while there are newer, more advanced ones?
- By including a warranty, will the product sell quickly?
These are just a couple of the questions you should answer explicitly well. If your entire inventory contains recently acquired, almost-new items and your past clients have never reported an issue, you are doing well. You should, however, try to deal in clean business and invest in legitimate business instead of profits and satisfaction.
REMEMBER, you earn your profit when buying
As a used goods dealer, it is your role to always hunt for good bargains all the time. Online auctions, Craigslist and your local buy-sell-trade groups on Facebook can be your go-to sites for endless deals on used products. Thrift stores are some other spots to get the best products on the cheap.
Regardless of where you get those used tools, one rule you should never forget is your profit margin. Only deal in those goods that you are confident they will resell for a profit. Once you have identified them, push or haggle to ensure you get the lowest buying price. By doing so, you will get a more significant profit margin when selling it.
Are There Any Reasons Or Advantages Of Trading In Used Equipment?
The advantages outweigh the demerits, especially when you consider the freedom of choosing one’s profit margin and the items to deal in.
Mostly, this business requires no massive investment to start and run. It’s possible to establish one with just as little as a thousand dollars and grow. If you choose an ideal spot and take advantage of both the on-site auctions and the internet, nothing will possibly stop its growth.
There’s a significantly lower financial risk in this business since all the funds directly go into stocking up inventory, which necessarily will comprise non-perishable items. You will be in business, trading every single day and if you choose to quit, the best way to recoup your investment would only be selling off your entire inventory.
The fact that making huge profits being a seller of used equipment is possible makes this venture worth giving a shot. As the owner, nothing can limit you from choosing the profit margin that you need. This thus makes it an excellent investment!
You get to work from home, a fashionable benefit today because of the various perks that come with it. First, working from home would mean you avoid incurring extra costs in rent payments, employee wages, and similar expenses.
The flexibility of choosing what to concentrate on and how to adjust the prices is incredible. You can go for ancient tools and antiques and make huge profits or even go for the modern, used equipment. What’s even more incredible is the freedom to choose your working hours and where to showcase your products at.
There’s also the benefit of saving a lot from taxes. Running your business online, at home is a great benefit if you consider how much you keep from the taxes – tax advantages and business write-offs.