Buy & Sell Second Hand Goods

The buying and selling of secondhand goods is one of the most popular small businesses in South Africa both as a side business and as a full time job.

Getting Started
There are a few components to this business: where to buy items and where to sell it as well as what to buy and sell.

Where to buy
To be successful in this business you need to be able to purchase goods for cheap enough that when you sell it, it has to be cheap enough to be attractive and yet sell for enough that you make a profit to make this a sustainable business.

One of the most popular places to buy items to resell, best if you have a few thousand rand, transport and storage to get started.

– Online Classifieds
Online classifieds is another place where you can buy stuff to resell. Often times people urgently need money and put up their goods to sell quickly or are clearing out and need the space, this is often where the bargains are. Classified sites like Gumtree have a feature where you can add alerts if items you are looking for is posted for sale.

Second hand shops / Pawn shops
The most popular in SA being Cash Crusaders and Cash Convertors. On one hand buying here offers you a little bit of security knowing that the person who sold the items to them provided an ID. But on the other side both of these franchises are hardly cheap. Now and then you get a good deal, you basically need to drive from branch to branch and you will be lucky if you get one item cheap enough that can be resold.

– Flea markets
Another great place to pick up goods on the cheap, but mainly cheap items, you won’t find a lot of big ticket items here. Popular items at flea markets include secondhand clothing.

Where to sell
Now the second part of the transaction: where to sell your goods where it sells fast enough and with enough profit for you to grow this business.

Online classifieds
What can be purchased on Gumtree can be sold on Gumtree.

Bidorbuy does not only do auctions they have a “buy now” option as well. What makes bidorbuy sometimes better than Gumtree or OLX is the trust rating factor. This also opens the door for cross province business. Lots of people on bidorbuy live far away from cities and use bidorbuy to source goods that is why if something may not sell on Gumtree (which is mainly used in urban areas) it may sell on bidorbuy to someone from a rural area.

What to buy and sell
Considering all of the above, the success of this business depends on what you buy and sell as well.

– Specialise
This is often the business model that takes this from a sideline gig to a full time business. Focussing on one product category: cars, tools, cameras, laptops, bikes etc. You get to know your products, what sells and what doesn’t, how well it holds its resale value etc. This also opens up the door for repeat customers if you are known to supply a product and offer decent products people will tell their friends and family about you.

– Whatever
This business model involves buying and selling whatever you can (legally) for a profit. It is the opposite of the above model. Often times because you are not specialising you have to research an item what it sells for. This means if you are out scouting for goods make sure you have your phone with you and data to research the item value (using model number) via a Google search.

Business Model
This is a retail business model, you buy an item, put a markup on and resell it.

Tips / Challenges
No discussion about secondhand goods in SA is complete without mentioning stolen goods. With one of the highest crime rates in the world, stolen goods is bound to enter the supply chain. This have the highest likelihood when you are buying from Online classifieds like Gumtree. Not everybody is going to allow you to make a copy of their ID and it is not common to ask for items other than vehicles.

South Africa also does not have a database of all stolen goods you can research via serial number etc. So you have to be vigilant, some items are easier to spot than others such as bikes, thieves often don’t know the real value of bikes and try to sell expensive bikes for next to nothing. Like everything in life, if its too good to be true then it probably is. Yes you will get legally owned items for cheap as well but a dead giveaway is if someone is selling something that you know they can get more money for from a walk in shop (where they need to provide ID) but is selling it to you for cheap instead. Jewelry being a good example which is worth its weight in the precious metal it is cast in. Some stolen items are part of series cases and will be tried to sold asap, you don’t want to involve yourself in such drama.

In SA there is a “Second Hand Goods Act” aimed at combating the trade in stolen goods, now this act says that “Every person who carries on a business of dealing in second-hand goods is identified as a dealer and must be registered in terms of the Act.” People working from home often don’t but if you open up a retail shop you should (it’s a police form called a “SAPS 601” you need to fill in). “Upon completion of the registration process, the respective dealer receives a prescribed certificate of registration which authorises him to carry on business in respect of second-hand goods.”

Once registered in order to be compliant you need to adhere to the following:

Record Keeping by Dealers

  1. Once a dealer receives the prescribed certificate, he can start acquiring and selling second-hand goods.
  1. All dealers who acquire and sell second-hand goods are required to keep a “register or record book”.
  1. This register or record book must contain the prescribed particulars / details regarding each and every acquisition or sale of second-hand goods.
  1. The dealer is obliged to obtain at least the following prescribed particulars:

4.1   the identity of the person from whom the second-hand goods were acquired including:

4.1.1          full names, contact address and contact numbers;

4.1.2          the manner in which the person’s identity was verified; and

4.1.3          the person’s ID number.

4.2   a description of the goods and the serial number or a distinguishing feature of the goods;

4.3   the purchase price paid by the dealer;

4.4   the number assigned to the second-hand goods by the dealer; and

4.5   the date and time of the transaction, the date on which the goods were sold or how and when the goods were sold.

  1. The person purchasing or selling the second-hand goods to the dealer must furnish the dealer with his full name, physical address and original ID document as proof of identity.
  1. The dealer should then keep a copy of the person’s ID for verification purposes.
Business Model Retail
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