By now, you’re probably aware of how easy it is to start a resale business. Whether you’re selling on an existing marketplace like eBay or creating your own website, the available options make it possible for anyone to begin reselling in no time at all. However, with so many details involved, it can be hard to keep track of your money from a resale business – especially if you have several different streams of income and expenses coming in from different sources.
Why is it so hard to keep track of your money from a resale business?
When you’re running a reselling business, you’ll generate different streams of revenue from different sources. Depending on the scale of your business, you may have sales coming in from a website, an existing marketplace, wholesale buyers, and even customers paying for your services directly. You’ll also have expenses related to your business that come from different sources. These could be cash purchases or business expenses such as hosting fees and software. As you can see, it can be very confusing to keep track of everything happening in your business when your finances are coming from different places.
How does a reselling business make money?
When it comes to reselling, you have two main options:
Traditional reselling involves buying products in bulk and then reselling them for a profit.
Online reselling usually involves promoting a specific product (often your own) and then earning a commission when someone makes a purchase through your website or store. Depending on which route you choose, the financial plan of your business will change.
Create a clear financial plan for your business
When you create a financial plan for your reselling business, you’ll have a good idea of how much money you need to get started and when you can expect to see a return on your investment. This will also help you track your money and expenses more easily as well. Let’s say a new laptop costs $1,000. If you need a new laptop for your business, you’ll want to account for this expense in your financial plan. If you know you can resell the laptop for $1,500 in a few months’ time, you’ll have a clear idea of how much you need to earn to pay for the new laptop and when you can expect to see a return on your investment.
Track all the income streams for your business
In addition to tracking your expenses, you also want to track all the income streams from your reselling business. This will help you see how much money you have coming in and where it’s coming from. If you have several different income streams, it can be helpful to create a spreadsheet to keep track of the money coming in. You can also record the estimated monthly and annual revenue for each stream. For example, if you’re selling on an existing marketplace, you can track the revenue generated from each item sold. If you have a website, you can track revenue from each sale as well as revenue generated from any advertising or sponsored posts. If you have a wholesale business, you can track the number of sales and the amount you receive per sale. Additionally, if you offer any services, you can track the amount you receive from these as well.
Track all the expenses related to your business
In addition to tracking the income streams for your business, you also want to track all the expenses related to your business. This can be helpful for a number of reasons. If you end up running out of money, this will help you track where the money went. It can also help you see if there are ways you can reduce your expenses and save more money. As with tracking your income, it can be helpful to create a spreadsheet to keep track of your expenses. If you have an online reselling business, you’ll want to track the monthly and annual costs associated with hosting, website hosting, and any online marketing and advertising costs. In addition to this, you’ll also want to track the cost of any inventory you buy for resale and any inventory storage and shipping costs. If you have a wholesale business, you’ll want to track all the costs related to wholesaling such as packaging, sourcing inventory, and any additional marketing and advertising costs. You’ll also want to track any travel costs involved with visiting wholesalers and any costs related to hosting an online store.
Running a successful reselling business can be rewarding and can help you earn a great income. However, it can be hard to keep track of your money when it comes from so many different places. To keep track of your finances, you’ll want to create a financial plan, track all your income streams, and track all your expenses as well.