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Resellers sell services or material assets that they have previously purchased themselves. Typical areas for reselling are web hosting or the mobile phone industry. In principle, every operator of an online shop that does not offer its own products or services is a reseller.
How does reselling work?
In principle, reselling is a simple way of becoming a retailer with little effort. The reseller usually buys fixed contingents of a company's products or services at favourable conditions and resells them in their own name or on their own platform. The amount of their margin usually depends on the quota purchased or on the volume of sales.
Resellers can also work on a commission basis. However, then the selectivity to the affiliate is lower. Drop-shipping is also popular with resellers. The retailer does not have to keep their own stock, but forwards orders in their online shop directly to the manufacturer, who then ships the goods.
A special form of reseller is the so-called VAR, the Value Added Reseller. This is not simply reselling goods, but adding special added value for the customer. For example, there are resellers who offer mobile phones as special bundles with a tablet at an even more attractive price.
Popular areas for reselling
Domain Resellers: On the Internet, domain resellers are very common. They offer customers domains at favorable conditions, which are ultimately managed by large web hosters.
Clothing reseller: in principle, any online clothing store that is not run on a drop-shipping basis is a reseller. These shops sell the products of major brands in their own shops and can often even determine the prices and online advertising for them themselves.
Reseller for mobile rates: Mobile phone contracts are also popular reselling products in the network, as they require neither a warehouse nor large investments.
Resellers vs. Affiliates
Resellers and affiliates are often not very clearly distinguishable. While affiliates usually only refer to another website, resellers have to provide their own infrastructure for shipping, ordering and checkout. For this reason, affiliates' earnings are settled via commissions or CPC or CPO, while resellers run their own business.
Reselling vs. Franchising
In franchising, the contractor commits themself in their own contract to fixed rules regarding the sale of a product or service of a certain brand. They represent this brand in their own business. The rules for reselling, on the other hand, are more varied. For example, a reseller can only concentrate on selling certain brands on the one hand and build up their business as his own brand on the other.
- Definitions of resellers the-reseller-network.com. Accessed on November 28, 2014
- 5 Strategies to Grow Your Business commsbusiness.co.uk, 2013