The market for used phones has grown every year since 2017, which means there are more opportunities than ever 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 Office store takes time, as does listing new inventory and managing customer service. To sell used phones, you may also need to manage fraud because there are bad actors who will buy your devices and return something totally different. Be aware that ecommerce marketplaces typically side with customers.
Stocking Your Inventory
Many people have written on the best methods to sell used 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 large 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 for about four to six weeks after 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 flood 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 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.
Selling on Amazon
Amazon is synonymous with online selling, and for good reason. They’ve built an amazingly comprehensive marketplace, and through the Amazon Third-Party Sellers program, they’ve opened up their website to independent retailers. Over half of worldwide sales volume on Amazon comes from small- and medium-sized businesses, so smaller sellers can really succeed on Amazon. The key is to know how the marketplace works, follow Amazon rules on listings, and be diligent and responsive when it comes to customer service and shipping.
Amazon provides detailed requirements on how you must describe phones you list for sale, which are sold within the Amazon category of Cell Phones and Cell Phone Accessories. The requirements begin with using the manufacturer’s Universal Product Code (UPC), and continue into finer points such as how to describe unlocked cell phones, how to package phones made for the international market that are sold within the US, how to describe the guarantees associated with your devices, and how to provide images that meet Amazon’s quality standards. It’s critical to your success as a seller on Amazon that you take the time to understand these requirements and comply with them. In return for your diligence, Amazon will begin including your listings in their search results pages, and your items will gradually rise in the rankings as you build your reputation.
Selling on eBay
eBay is a time-tested marketplace for used cell phones. Much like selling on Amazon, it pays to put in the time to understand the quirks of the marketplace. eBay has a quick guide for phone sellers on how to make a listing that emphasizes titles, structured data, photos, and price. If you get these basics right, you’re well-positioned for success on the platform.
- Titles mean you should list your cell phone according to the most important and commonly searched features of your phone. eBay recommends going by brand, model, memory, color, carrier, and grade.
- Structured Data is the use of product identifiers and item specifics to give more detailed information about the product than is contained in the title. Product identifiers should include some or all of the Global Trade Item Number (GTIN), Universal Purchase Code (UPC), and Manufacturer Part Number (MPN). Required item specifics are condition, brand, model, storage capacity, and color.
- Photos should be high resolution, feature a white background, and include shots of the product from several angles. eBay recommends including a few close-ups to show the cosmetic condition of the phone.
- Price is a critical selling point. Buyers will use price as one of the most decisive factors when considering a purchase. Be sure to research the market for similar phones and price your device competitively. eBay has an underused free price research tool called Terapeak that you can find in the Research tab of the Seller Hub page.
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 customers 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 selling phones online. 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.