The market for used phones has grown year over year since 2017, which means there are more opportunities than ever before for motivated resellers to make a profit. Thanks to robust ecommerce platforms and reliable wholesale cell phone suppliers, resellers no longer have to stock large amounts of inventory or even have their own website to get started. In this article, you’ll find everything you need to know about how to sell used cell phones online.
How to Sell Cell Phones Online: The Basics
The most important things you will need to do to get started are registering your business and deciding how much startup capital you can invest in your new enterprise. Make sure you set up your business properly (there is helpful information on the IRS website), obtain a seller’s permit, and talk to your accountant about the tax laws in your state or territory. Some marketplaces like eBay and Amazon calculate tax for sellers by buyer location, but it’s worth knowing the rules. Be aware that if you are selling to companies that buy on eBay, your customers may be tax-exempt. Read our article about reseller certificates for more information about who does and does not have to pay sales tax.
How much you should initially invest in your business will depend largely on your resources, but most microbusinesses launch with about $3,000 and 64% of small businesses are started with less than $10,000. Don’t forget that your startup costs will include not just inventory, but also packaging, the cost of shipping and shipping materials, fees charged by the marketplaces where you list your inventory, and possibly also storage space. You can keep costs down by storing inventory in your home, buying shipping materials in bulk, researching the best shipping options for resellers, and choosing marketplaces with lower fees (more on that below).
Don’t forget that time is money, and you’ll need to budget time to run your business. Packaging used phones and scheduling pickups or dropping off packages at the local UPS or FedEx store takes time, as does listing new inventory and managing customer service. You may also need to take steps to manage fraud because there are bad actors who will buy your devices and then return something totally different. Be aware that ecommerce marketplaces typically side with customers.
Stocking Your Inventory
Many people have written about how to get money for old cell phones, but it’s actually quite simple. To succeed in this business, you need to find a wholesale used phone distributor that can guarantee a consistent supply of high-quality devices. Finding the right inventory used to be a tedious and risky process in which you could never be certain that you would get what you paid for. Leading distributors like WeSellCellular are changing this and making it easier for resellers to stock their inventories. At WeSellCellular, we get our wholesale inventory from major carriers and operators, and we have developed our own transparent and consistent testing and grading procedures so resellers can buy high quantities of phones online with total confidence.
Understanding the Supply and Demand Cycle
When learning the ropes of how to sell used cell phones, one of the first lessons is that there are cyclical “heavy” times for buying wholesale and selling devices in the consumer market. For instance, customers often trade-in devices four to six weeks following the release of a new iPhone. Based on the pattern of iPhone announcements happening in the fall, that means second-hand inventory spikes dramatically in the fall and winter. This means that the market may get flooded with inventory during these months, which leads to drops in prices, so you need to be careful about stocking too much inventory during this time.
Conversely, people who are waiting to upgrade to the latest model will often hold on to their devices through the spring and summer, so you may want to stay on top of replenishing your supply leading up to the “dry months” to ensure that you’re not subject to a summertime shortage, as other resellers that sell used phones online compete for inventory and push prices up.
Budgeting for Good Buying Times in the Used Cell Phone Business
Try to budget to ensure that you have the capital ready when prime, highly sellable models flood the market around October through February. Apple usually announces its latest models in late September or early October, leading to an influx of cheap trade-ins. Holiday gift-giving also means more consumers have outdated models to trade-in after the end of the year.
Make sure you have the capital required to scoop up inventory while it is plentiful. Most distributors require full payment before shipping. While some options for financing or buying on credit are available, they typically come with added fees. When learning how to sell used cell phones online, being connected with a trusted distributor of Apple and Android products is essential for making sure that you don’t make an upfront payment for a shipment that does not meet your quality expectations. Look for a supplier with flexible payment options, excellent grading standards, and, of course, plenty of inventory.
Where to Sell Used Phones
When you’re thinking about how to sell used cell phones online, one of the first business decisions you’ll make is where to list your inventory. There are two main ways to get started listing your used phone inventory online: either through your own storefront or through a third-party marketplace.
If you’re trying to build an independent brand and build your own web traffic, it’s important to have an online storefront built by a developer with a background in ecommerce. You’ll need to put in place a web marketing plan, optimize your shop with features like abandoned cart reminders, targeted ad serving, retargeting, and more. You may also want to consider generating promo codes that can be shared on coupon sites to attract new customers looking for bargains. If that sounds like too much, platforms like Shopify can help you get up and running without the need to hire a developer. Shopify will also help you with search engine optimization, cart abandonment, and more.
While there are backend ecommerce platforms you can use to set up your own retail website, it’s sometimes easier and less expensive in the long run to use high-traffic marketplace platforms like Amazon and eBay, as well as sites like Rakuten, Back Market, Facebook Marketplace, Swappa, Newegg, and even Craigslist. You might be tempted to list your inventory on as many marketplaces as possible, but this is time-consuming and costly because most sites have monthly subscription fees and/or per-item selling fees. Another reason to focus on one, or at most a small number of marketplaces, is to build your credibility with these marketplaces over time. Building trust on a marketplace can reduce your customer acquisition costs, as most marketplaces have algorithms that favor experienced sellers.
Be sure to research platforms carefully. Before choosing one or more marketplace platforms, you need to be sure that you’ll still make profits after paying fees. You also need to be sure that your products don’t go against platform rules. For instance, Amazon limits the types of cell phones sellers can list. To sell Apple products, you must be an Apple authorized reseller or part of the Amazon Renewed program.
Best Practices for Selling Used Cell Phones Online
What and where you list and how much you list your inventory will depend on your target demographic and market factors. That said, there are some things you should be doing no matter what your stock list or customer base looks like. Maximizing visibility and building a great reputation are both key to how to sell cell phones online successfully. Always be clear on your listings and tell customers exactly what they’ll be getting when they click the buy button. If you are selling something used, refurbished, or in any other condition than perfect, you must detail the exact condition of the phone. Post strong photos, write good descriptions, and to maximize visibility, look into search engine optimization and platform-specific product listing optimization.
Transparency is key because that’s what leads to satisfied customers, and satisfied customers leave positive ratings. Most marketplace platforms will rank your product listings in search results based on those ratings. More positive ratings will translate to greater visibility, which in turn can translate into more sales. It doesn’t matter whether you’re selling like-new used phones or fixer-uppers — when your goal is to make a career out of selling used cell phones online, integrity is the best practice of all.