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What Is A Reseller? How To Become One?

Written by: Mowico Team

8 min read

As the trend of digitalisation takes over nearly all aspects of the business world, e-commerce is decisively moving towards being the norm for commerce businesses. The mobile and rapid nature of online commerce draws more customers from physical stores to online shops every day. With the uptrend of e-commerce, another term has also started to gain traction as a way of starting an e-commerce business; reselling. Even though reselling is not only related to e-commerce businesses and its emergence as a business model is not recent, e-commerce reselling offers an accessible and manageable way to start an e-commerce business. In this article, we are going to describe what is reselling and how to be a reseller yourself. 

What is a reseller?

A reseller is a business or individual who purchases products in bulk from manufacturers, wholesalers, and distributors and then sells them at prices that are generally below the manufacturer’s suggested retail price. The business or individual does not produce the goods they sell by themselves. Resellers purchase products from suppliers and sell them at higher prices to individuals and companies. Resellers may buy products wholesale and sell them retail, so they can enjoy higher profit margins than those who buy at retail prices. Resellers may also offer incentives that the suppliers cannot provide, such as lower prices and one-stop shopping by creating a shop that addresses many needs at once. Resellers take advantage of the economies of scale by purchasing in bulk, making their products or services cheaper than others.

In the e-commerce industry, resellers find certain products with the best deals available and then sell them on their online store websites, mobile apps, or e-commerce platforms. Many e-commerce businesses can be regarded as resellers since they are not selling the products they produce or items exclusively produced for them. Also, mobile apps are getting increasingly popular and efficient in e-commerce businesses, so you can check out our article to find out why your e-commerce business needs a mobile app

About reselling

When we talk about online reselling, several types of products may offer feasible opportunities for individuals to kickstart their reselling business thanks to their high demand and accessibility. For example, technology resellers, sneaker resellers, clothing resellers, or book resellers are pretty common since these products have countless different brands and models to create demand for them. This high demand can significantly benefit reseller businesses. 

Even though reselling offers a somewhat accessible way of getting into the e-commerce market, there are vital points resellers need to watch out for in order to make a seamless entrance into the e-commerce world. First of all, knowing your market and target customers make it easier for you to know what type of products to seek and try to sell in your shop. Secondly, forming beneficial relationships with suppliers significantly helps your business grow since you will get even better deals when buying products to sell. Also, since online resellers do not have direct contact with the products they sell, you need to be aware of possible quality problems and choose your suppliers accordingly. Finally, resellers do not sell unique products. Most of the products sold by resellers have similar or substitute products in the market that may distract buyers. So they have to find ways to differentiate themselves from their competitors with successful marketing and pricing strategies to continue making sales. 

How to become a reseller?

 We already noted that reselling is one of the more accessible and approachable ways of getting into e-commerce and starting your e-commerce business. But how can you become a reseller yourself, or how can you turn your e-commerce business into an online reselling business? First of all, you need a product or a service with a considerable amount of demand to buy and sell for profit. While seeking your reselling product, you should know that the sky’s the limit. You can resell anything ranging from physical items like shoes, phones, car accessories, pet items, cosmetics and books to digital products such as ebooks, music, and videos. After you decide on what you will resell, the next important step is to find the right supplier for you. When choosing a supplier, you need to consider your geographical limitations, supplier’s location, price and product quality. Then, you can start your reselling business by choosing an e-commerce channel. Our suggestion is to conduct your business through multiple channels such as a website, an e-commerce platform, and a reseller mobile app. Although you can sell the products you bought through platforms like Etsy, Amazon Marketplace or eBay, having a mobile app for your business will significantly improve both your and your customers’ experience with your business. If you’d like to have an app for your e-commerce business, you can check our article on how to build a no-code e-commerce app in hours.

After setting up your shop, you’re good to go. The next step is to find the correct pricing for your products. This is an essential step for all business models, but there are a little more to consider regarding reselling products. Unlike being the sole producer of the products or services you sell, reselling does not offer the same kind of liberty and flexibility when pricing your products. Since most of your products are already on the market, other sellers have already determined the prices. But don’t forget that you can always cut costs by finding a supplier with better prices or a more efficient marketing campaign, for example, so finding the balance between your costs and the determined market price is the key to perfect pricing. 

Focusing on the marketing of your products is also crucial for your reseller business. Unlike being a manufacturer where focusing on the quality and practicality of your products is basically enough for them to sell themselves, resellers face a unique challenge when it comes to growing their customer base. To improve your brand visibility and awareness, you need to focus on various marketing channels, such as getting targeted ads and creating useful content about your product. That way, you can draw more customers while adding value to your e-commerce business.

Advantages of reselling

Running an e-commerce reselling business is a feasible option for anyone who wants to enter the field of e-commerce without having to invest in extra costs like inventory. So, the most significant advantage of reselling is the accessibility it offers to inexperienced enthusiastic entrepreneurs. When starting an e-commerce business, you need to allocate your resources to have an inventory to hold your products in. But a reselling business does not require any extra inventory since you will be buying and selling items without even having to touch every one of them.

Also, product investment costs are lower in a reselling business since resellers are just like middlemen, not manufacturers. Besides making reselling a more cost-effective option, lower production costs also mean that the risks you are taking with your business are also milder. Anyone can agree that failing is easier when it’s not your product you are selling since when you are reselling, you can always reallocate your sunk cost and find other items to sell until finding your perfect product. 

Another advantage of reselling businesses is higher profit margins. Since you will not be buying the products you are going to sell at the retail price, your initial cost is already lower when purchasing your products. Besides that, you will be able to set lower prices more easily because of all the expenses you are not paying by having a reseller business. Lower prices will increase the number of your customers, which will eventually return higher profits and sales for your business. 

Boost your reseller business with Mowico

Now you know all the basics of a reseller business and how to become a reseller, but as we stated before if you are getting into the e-commerce industry, a mobile app for your business is a must. And if you don’t know a thing about designing and coding an app, the no-code resell app builder Mowico can help you create your app in just a few hours. With Mowico, you can easily transfer your past e-commerce platform data to your mobile app, list the items you bought on your app and continue your reseller business with your brand new reseller mobile app. Mowico also lets you send push notifications to your customers and use loyalty points to dish out special offers so that you can effectively attract the attention of your users. Check out our website to explore all features of Mowico, and try it for free to see the difference for yourself.

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