Reseller Option
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What is a reseller?
A reseller buys products with the objective of selling them later at a higher price. Resellers purchase the goods and services from manufacturers in bulk, so they typically receive discounts. Resellers then connect manufacturers and consumers through the act of reselling, bringing goods and services to end users.
What are the benefits of being a reseller?
Reselling has become a popular business opportunity, as seen in the rise of both online resellers and small reselling shops. Here are some reasons why you may want to consider establishing a reselling business:
1. Efficient business process
Once they have an established market, resellers can quickly fill orders for clients. Doing this is possible because they already have a line of reliable suppliers who can fulfill orders at short notice. Resellers can then spend more of their time acquiring new clients and looking for more profitable products to sell and promote.
2. Flexibility
Reselling provides some flexibility in your business, as it allows you to choose from a wide range of products to sell. If you are a small reseller who doesn’t carry a large inventory, you may have the ability to quickly switch products to maximize profits and reduce risk should the market demand for your product fluctuate.
3. Fast expansion
The flexibility and profitability of reselling can make it easy to expand the business quickly, especially if you use online marketing and sales channels. With an understanding of the market and strong relationships with suppliers, you may be able to achieve scale quickly at relatively low cost.
What does a reseller do?
A reseller does more than just resell items for profit. They carry out certain functions on behalf of the manufacturers, some of which are:
- Conducting merchandising and promotion for products
- Handling inventory storage and distribution of products to final consumers
- Educating customers on how to use the product or service
- Providing customer support and addressing issues users have with their purchase
- Grading and packaging items before selling to buyers
- Conducting research on market trends and customer behavior and gathering other useful data for manufacturers
Types of resellers
The following are the different categories of resellers and their roles in the supply chain:
1. Wholesaler
A wholesaler is usually a big organization that offers to buy a company’s product and sell it to retail outlets. Wholesalers often operate out of a warehouse and can specialize in many different types of products. However, wholesalers rarely interact directly with consumers.
2. Retailer
The retailer buys products from the wholesaler or distributor and sells those products in small quantities to customers. That makes the retailer the final link with the customer in the sales chain. As a reseller, the retailer ensures availability of a variety of goods at affordable prices, since their main goal is to satisfy buyers by providing quality goods and services.
3. Distributor
The distributor is an entity that buys products from the manufacturer and sells to another entity in the supply chain. Distributors mostly sell to wholesalers, but they may sell directly to retailers and even consumers in rare instances. Although distributors perform similar functions as wholesalers, the distributor is closely affiliated with the manufacturer, which is not the case for the wholesaler.