Learn how to trade: 4 steps to make money from buying and selling goods

In recent years, the trend of learning how to trade and do business has been sought after by many Vietnamese people. According to statistics from Google Trends, keywords related to "buying and selling for profit," "how to trade online," and "small home-based business" have sharply increased, especially among young people and those looking to earn additional income.

In reality, many people have started trading and doing business with a small capital, or even almost no capital. From reselling old clothes, electronics, books, to new trends like collectibles or digital products – all can become opportunities to make money if you know how to choose products and understand the market.

The important thing is that trading is not just about buying cheap and selling expensive, but also a skill. When you learn how to trade and do business with the right method, you will know how to find suppliers, price products, and reach customers more effectively.

In this article, you will be guided through the basic principles of making money from buying and selling, helping you to start trading and doing business in a practical, easy-to-apply way that is suitable for the current Vietnamese market.

Step 1: Choose products to buy and sell

Clearly define the product or market you want to operate in

• When learning how to trade and do business, the first step is to choose a specific type of product or market to focus on.

• You can buy and resell many different types of goods, from electronics, clothing, household appliances to digital products or services.

• However, practical experience shows that beginners should focus on one product group to better understand the market, prices, and customer needs.

• Once you are familiar with that market, you will easily recognize where good sources are and which products have high profits.

Real-world examples in small business trading:

• Buying used phones, making minor repairs, then reselling them.

• Selling second-hand clothes or unsold inventory clothes.

• Buying popular products in bulk then selling them retail online.

Focusing on one market helps you build experience and reputation faster, instead of selling too many things without deep product knowledge.

Understand the principle of supply and demand in business

• One of the important pieces of knowledge when learning how to trade and do business is understanding the supply-demand law of the market.

• The principle is very simple: the rarer and more desired a product, the higher its price.

• Therefore, experienced business people often look for products that are difficult to find but have stable demand.

Real-world examples in buy-and-resell business:

• Collectibles or limited edition products often sell for high prices.

• Products that are "hot trends" on social media often have high demand for a short period.

• Rare items or those hard to find locally can also yield good profits.

Understanding this principle helps you choose the right products to trade, instead of stocking items based on intuition.

Recognize value from effort and expertise

• In trading and business, the price of a product or service depends not only on the materials but also on the time, skill, and effort required to create it.

• Products requiring high craftsmanship or a long production time often have higher prices.

Obvious real-world examples:

• A carefully repaired and checked phone will sell for a higher price than an un-repaired one.

• Handicrafts or handmade products often have high prices due to the effort involved.

• Services requiring specialized knowledge or long-term training often have greater value than simple services.

When learning how to trade and do business, understanding this factor helps you:

• Price products reasonably.

• Know when to invest more effort to increase product value.

• Find opportunities to buy cheap – add value – resell for profit.

Step 2: Research the market before trading

Understand product market prices

• When learning how to trade and do business, the most important thing is to know the average market price of the product.

• If you don't know the popular price range, you can easily buy too high or sell too low, leading to low profits or even losses.

• Experienced buy-and-resell business people always spend time observing prices before deciding to stock up.

Simple ways to determine market price:

• Find product prices on e-commerce platforms like Shopee, Lazada, or Tiki.

• Check resale prices on online marketplaces and social media like Facebook Marketplace or buying/selling groups.

• Compare prices between retail stores and wholesale sources to know the potential profit margin.

When you understand the average price of a product, buying at the right price and selling for a profit will become easier.

Observe actual transactions in the market

• An effective way when learning how to trade and do business is to track successfully sold transactions, rather than just looking at listed prices.

• Many products are listed at high prices but are actually not bought by anyone.

How to track actual transactions:

• Check sold items on online marketplaces or international auction sites like eBay.

• Follow buying/selling groups to see the price buyers are actually willing to accept.

• Record popular prices to determine a reasonable buying-selling price range.

This method helps you understand what the market is actually trading at, instead of just relying on advertised prices.

Understand that market prices are always changing

• A crucial principle in trading and business is that product prices are not fixed.

• Prices can change over time, with trends, supply, or economic conditions.

Practical examples:

• Some essential goods like milk often experience very slow price fluctuations over many years.

• Meanwhile, items like gold, oil, or tech products can experience sharp price changes due to the market.

• Trend-driven products, especially in online business, can increase or decrease in price very quickly.

Therefore, when learning how to trade and do business, you should regularly monitor market prices. This helps you stock goods at the right time, sell at the right price, and maximize profits.

Step 3: Find reliable suppliers for your business

Choose a reliable supplier

• When learning how to trade and do business, the source of goods directly determines the profit and sustainability of the business.

• You need to find reputable suppliers with stable prices and clear product quality.

• The basic principle in buy-and-resell business is: the purchase price must be lower than the market selling price.

Some common ways to find suppliers:

• Find wholesale markets or warehouses locally.

• Find suppliers on online wholesale platforms.

• Join business sourcing groups on social media.

• Contact large stores or distributors directly.

Before establishing a long-term partnership, you should order a small quantity as a trial to check the quality and stability of the supply.

Understand the role of wholesalers

• In trading and business, many people source goods from wholesalers.

• Wholesalers typically buy large quantities from manufacturers and then resell to retailers.

Common market process:

1. Manufacturers produce goods.

2. Wholesalers buy in large quantities.

3. Retailers source goods from wholesalers.

4. The retailer resells to customers.

Advantages of sourcing from wholesalers:

• Easy access to goods.

• Can order moderate quantities.

• Suitable for beginners learning how to trade and do business.

However, due to the additional intermediary, profits are often lower compared to sourcing directly from manufacturers.

Prioritize direct sourcing from manufacturers

• An important lesson in buy-and-sell business is to try to source directly from manufacturers whenever possible.

• By cutting out intermediaries, you can often get better prices and higher profits.

Benefits of working directly with manufacturers:

• Lower import prices.

• Stable long-term supply.

• Ability to negotiate prices or quantities.

• Easier to build a private brand for long-term business.

After gaining experience and a stable customer base, you should seek to connect directly with manufacturers to increase profits and expand your business.

Step 4: How to sell for profit

Choose the right time to sell

• When learning how to trade and do business, selling is not just about having a product, but also about choosing the right time when there is market demand.

• Effective business people often monitor the market to know when products are easy to sell and at a good price.

Some ways to observe the market:

• Monitor search trends and online shopping demand.

• Observe selling prices and sales speed on e-commerce platforms.

• Check buyer feedback in buying groups or product communities.

• Import and sell aggressively when products are in high demand.

Understanding the market correctly helps you sell faster and reduce inventory risks.

Apply the buy low, sell high principle

• A basic principle in trade and business is to buy low and sell higher to generate profit.

• This means you need to find good-priced sources and sell at a market-appropriate price.

Practical examples in buy-and-sell business:

• Buy a product for 50,000 VND and resell it for 80,000 VND.

• Import large wholesale quantities to reduce import prices, then sell retail at market prices.

• Find discounted or clearance products to resell.

This principle sounds simple but is the foundation of every buy-and-sell business model.

Balance between low price and product quality

• When learning how to trade and do business, many people think that just buying as cheaply as possible is enough. However, low prices often come with lower quality.

• Therefore, business owners need to balance import prices and the product's true value.

Simple example:

• A very cheap umbrella might sell quickly, but the profit per product is low.

• A high-quality umbrella might sell slower but have higher profit per order.

Two common business approaches:

• Sell large quantities – low profit per product.

• Sell fewer but with high profit per product.

Depending on the product and market, you can choose the appropriate strategy to optimize profits when trading and doing business.

Notes when starting a buy-and-sell business

Do not quit your job without a business foundation

• When first learning how to trade and do business, you should not rush to quit your current job.

• Business needs time to validate the market, build a customer base, and stabilize cash flow.

• Many people start by selling online or doing small side businesses to reduce financial risk.

Practical approach:

• Start with a small scale and low capital.

• Check if the product has stable demand.

• Only expand when revenue is stable and you have regular customers.

This approach helps you learn how to trade and do business more safely, avoiding financial pressure when starting out.

Research thoroughly before sourcing goods

• An important principle in buy-and-sell business is to always check information before making a purchase.

• If you don't research carefully, you might buy overpriced goods, low-quality goods, or goods from unstable sources.

Things to check:

• Average selling price of the product in the market.

• Supplier's reputation.

• Actual product quality.

• Resale potential and customer demand.

Once you have thoroughly researched, you will source goods at a reasonable price and reduce the risk of financial losses in business.

Be careful when transacting directly

• In trade and business, especially when buying and selling directly, safety is very important.

• You should ensure that the transacting party is trustworthy and the transaction is transparent.

Some practical tips:

• Meet for transactions at public places or stores.

• Thoroughly check the product before payment.

• Limit carrying large amounts of cash unless necessary.

• Prioritize transactions with sellers or buyers who have clear information.

These simple rules help you conduct business safely and avoid unnecessary risks, especially when first entering the buy-and-sell business field.

References

1. Andrew Lokenauth. (Expert interview). Finance Executive, founder of Fluent in Finance.
2. Entrepreneur. (n.d.). How to make money buying and selling. Retrieved from https://www.entrepreneur.com/article/74316
3. Entrepreneur. (n.d.). How to market a new product successfully. Retrieved from https://www.entrepreneur.com/growing-a-business/how-to-market-a-new-product-successfully/179084
4. Entrepreneur. (n.d.). Pricing strategies for products and services. Retrieved from https://www.entrepreneur.com/article/66028
5. HubSpot. (n.d.). Market research and the buyer’s journey guide. Retrieved from https://blog.hubspot.com/marketing/market-research-buyers-journey-guide
6. Investopedia. (n.d.). Economics basics: Supply and demand. Retrieved from https://www.investopedia.com/university/economics/economics3.asp
7. Investopedia. (n.d.). Market value definition. Retrieved from https://www.investopedia.com/terms/m/marketvalue.asp
8. Inc. (n.d.). How to price your products effectively. Retrieved from https://www.inc.com/guides/price-your-products.html

Translator: Rowan Hudson Le.