Your kitchen table may not seem like the most glamorous of places to start a business, but many start-ups have blossomed into success stories from such humble beginnings. Learning how to sell products from home is a great way to start a business on a budget.
With the right approach, it’s easy to make money selling products from home.
Overheads are low, and commuting costs and travel time non-existent – leaving you more time to sell and make a profit.
The internet, and then the pandemic, has proved a game changer for home-based businesses.
Anyone with a computer and broadband can now sell to a global audience on platforms such as Amazon opens in new window, eBay opens in new window and Etsy opens in new window, removing the need to build expensive websites or invest in inventory and payment software.
Starting a business doesn’t come with a set of instructions.
We know that understanding the many different types of financial product in the marketplace can be difficult.
Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.
Why sell products from home?
Selling products from home offers plenty of advantages. It’s cheap and easy to get started.
Turning a spare room or garage into an office or workspace saves the cost of renting premises.
Achieving a work-life balance is another key motivator those looking to sell products from home.
With a home-based business, you’re free to set your own schedule and can take a flexible approach to working hours.
Many home-based businesses involve doing something the owner enjoys.
It’s a way to turn a hobby or interest into a business, while gaining new skills in marketing, sales and running a business.
You can grow the business or simply keep it operating on a smaller scale.
There are potential disadvantages, though.
Selling products online is a 24-hour 7-day-a-week activity and separating work and personal life can be a challenge.
It’s competitive and demanding, too, with customers expecting products to be dispatched quickly.
What you need to sell products from home successfully
- Products – Choosing the right product to sell at the right price should be at the heart of your business. Products must be in demand, easily shippable with the ability to add a markup to make a profit.
- Space – A dedicated room at home to run your business from is a major bonus. If shipping products from home, you’ll need secure, dry, safe and accessible storage space and a place to package products ready for posting. Cramming your living space with stacks of products isn’t a good idea.
- Office equipment – If you’re selling online, you’ll need a computer, monitor and printer. Invest in fast broadband and office software such as a spreadsheet, word processor and mailing software.
Check permission to sell products from home
Before you start selling, check that you can legally run the type of business you want from home.
You may need a licence and permission – this will depend on the nature of your home, whether you own it or rent it, and the type of business you plan to run.
For example, if selling products from a council house or rented property, you may need written permission from your local council or landlord – so check with them first.
If you own your home, look to see if there are any restrictive covenants attached to the property or clauses in your mortgage that prohibit certain uses of your home.
Making changes to your home to accommodate your business may require planning permission and you may need to pay business rates on the part of your home from where you run your business.
Selling products online
Many home businesses sell products online.
With no need for a physical store, you can sell products through online marketplaces such as eBay and Amazon, or directly from your own website with the potential to reach customers worldwide.
Selling from your own website removes the need to pay a share of the sale price to the host marketplace.
Instead, you keep 100% of the revenue, potentially increasing the amount of profit you make.
However, you’ll be responsible inventory and storage.
Selling from your own website can mean storing products at home and you’ll need to factor in time and space for packing and sending products once sold.
Many home businesses solve this challenge by drop shipping.
With drop shipping, you simply sell a manufacturer’s products.
You take the order and your supplier then ships the items directly to your customer.
You don’t need to invest money in buying bulk inventory, worry about storing stock or managing product shipment.
Your supplier handles the order fulfilment, leaving you free to concentrate on marketing and selling products.
All businesses, including online businesses, have to comply with data protection and privacy laws, including the UK General Data Protection Regulations (UK GDPR) opens in new window and the Privacy and Electronic Communications Regulations (PECR).
This includes providing a privacy notice, understanding when to carry out data protection impact assessments, mapping the personal data you hold, storing it securely, training your staff, and appointing and managing any data processor you use appropriately.
You should seek specialist advice on how these laws affect your business and what you need to do to comply with them.
If you don’t comply with data protection and privacy laws it could lead to substantial fines by the regulator, the Information Commissioner.
Choosing the right products to sell from home
Picking the right products to sell from home is key to ensuring business success.
You can either create your own products to sell or buy existing products from suppliers and resell them directly to customers.
It’s a good idea to choose something you’re interested or are skilled in.
For example, if you enjoy crafting or sewing, you could sell jewellery, cards, home or fashion accessories.
If you’re interested in health, you may consider selling supplements or health-oriented products, though you’ll need to make sure you understand the licensing and regulatory requirements of setting up such a business.
Think about what makes a successful product.
Research products that are in demand, easy to ship, and cheap to manufacture.
If reselling products aim to ensure your margin is greater than 50 per cent.
Research similar products for sale online and note pricing, delivery times and charges, ranges and options.
Check your product can be competitive.
Determine the size of the market
Study the size of the market for your products by looking at market studies, journals, and government reports.
The bigger the market size, the bigger the opportunity for success.
Examine how competitive the market is, too.
Lots of small businesses selling similar products is a good indicator of demand but can make it harder for your business to stand out.
Avoid products that are protected by trademarks and sold by huge retailers.
Niche products are a good choice.
How to buy and store stock
If you’re not drop shipping, you’ll need stock to sell from home.
If possible, buy products wholesale directly from the manufacturer and shop around for the best wholesale prices.
Ask potential suppliers for test samples of products and be sure to check a supplier’s minimum order details to avoid ordering too much stock.
Keeping inventory levels to a minimum will reduce the risk of unsold stock.
Where to sell products from home online
There are plenty of marketplaces you can use to sell products from home.
Websites such as Amazon, eBay or Etsy give ready access to ecommerce tools including listings, payment, mailing and customer communications, and even inventory storage and fulfilment.
They also reach millions of potential customers.
The downside is that you’ll pay a significant slice of your profit to the marketplace, and often you’ll be competing with hundreds of rival small businesses selling similar products.
Competition can drive down prices, reducing your ability to make a profit.
Some of the more popular marketplaces are:
- Ebay opens in new window – with over 135 million registered users, eBay is the internet’s largest auction place. Selling on eBay is straightforward. List a product to sell and choose either the auction format or fixed price format. Fixed price is useful for common products where customers will purchase for convenience and price. Auction pricing is used for rarer products where there is limited supply compared to greater customer demand. Once the item is sold, you ship it to the buyer.
- Amazon opens in new window – Selling on Amazon is easy. Simply create a profile, list your product along with a description, condition, and price and then ship it once sold. As with other marketplaces, you can create a storefront to sell your products. This is a personalised business page that enables customers to see all your products in one place. Amazon can store and ship your inventory but be aware that Amazon sells many products directly itself which can make selling your products more challenging.
- Etsy opens in new window – This marketplace focuses on handmade crafts with a personal touch. If your business is focused on creating, making and crafting products to sell from home, it’s worth investigating Etsy.
Creating your own website to sell from
Rather than using an online marketplace you can create your own ecommerce website to sell from.
If you lack website building expertise, look for an off-the-shelf ecommerce template.
The good news is there are thousands of free or cheap ecommerce WordPress templates to choose from, making setting up your own ecommerce website relatively easy.
Keep the layout and design simple so customers can find and easily buy products.
You’ll need to set up a way to accept payments.
This is usually completed with a credit or debit card transaction processed through a payment gateway – an application that authorises your customer payments online.
There are lots of ecommerce solutions to choose from, or you can link your PayPal opens in new window account to the website for easier payments.
Tips for selling products online from home
Whatever way you sell your products from home, boost your sales with these tips.
- Use high quality photos – Take well-focused shots of the product against a white or solid colour background. Show all aspects of the product and include a photo of the product in use. Use a ruler for scale if selling small items or hard to size items.
- Describe products clearly – When describing your product, use the same words and phrases – known as keywords – that people use when searching for similar products in Google. This will help people will find your products online.
- Good customer service – Be courteous even to annoying customers to keep your feedback rating high, and always request feedback and reviews from every customer. Respond quickly and politely to questions and problems, post items without delay and have a clear returns and refunds policy.
- Marketing and promotion – Ensure your business is listed on website directories and operate social media accounts, using them to promote new products and offer discounts. Encourage customers to follow your social media channels for flash sales and exclusive offers.
- Delivery – Once sold, package items securely and dispatch quickly to ensure customer satisfaction. Consider using a tracked delivery service so you and the customer can track shipment progress.
Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.
Our free Learn with Start Up Loans courses opens in new window include:
- Entrepreneurship – from ideas to reality
- First steps in innovation and entrepreneurship opens in new window
- Entrepreneurial behaviour opens in new window
Plus free courses on finance and accounting, project management, and leadership.
Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or its subsidiaries, or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.