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What Is A Reseller? What You Need To Know Explained!

We have all heard the term "resale" or "resell" but we may not have a complete understanding of what a reseller is and how they impact all of our daily lives. It is very easy to take for granted what a vital role resellers play in the economy. Without resellers, we would not have the lifestyles we have today. We will touch base on different aspects of reselling and how reselling has been coined with a negative connotation





So What Is a Reseller?


A Reseller is a person or company who buys good or services with the intent of selling the good or services, typically to gain profit.


So in layman's terms if you want to sell something, you must buy it then sell it for more. This is where we get the term Resale. Resellers are usually the people conducting the business, doing the buying and selling. In most instances, resellers are the link between manufacturers and consumers. When was the last time you went directly to the factory and bought you a pair of shoes? Probably Never... That's because resellers play a vital role when it comes to distributing and storing product and making it widely available to you and me.



What Does A Reseller Do?


A reseller may perform many different activities that ultimately lead to selling goods or services for a profit.


Resellers of many different businesses and models all have one thing in common. They make money by selling goods and services that have been marked up. All business are unique and not all resellers do these things; however, the main things resellers do are the following: Buy products, store products, ship products, advertise and market their products, distribute products locally, educate customers, research market trends and customer behavior as well as many other activities that go into reselling.



Are There Different Types Of Resellers?


Yes! The are a few different types of resellers. There are resellers for many different scenarios and I know there are many different niches within reselling; however, I am going to go over some of the more common types.


Types Of Resellers



Distributor


Distributors are huge B2B (business to business) companies that focus heavily on buying direct from brands and reselling the product to wholesalers and retailers. Distributors usually have massive catalogs of "Name Brand" products. Distributors are usually closely affiliated with the brand and may even play a huge part in the marketing of the brands products.



Wholesaler


A wholesaler is very similar to a distributor however they may not buy directly from the brand all the time nor maintain a high level of affiliation with a brand. Wholesalers typically buy large quantities of product at a time and sell the large quantities to retailers. Wholesalers may be very large or even considered small businesses. Wholesalers vary greatly from product selection and product availability. They usually have very high minimum order quantities or certain order price thresholds.



Retailer


A retailer is a B2C (business to consumer) company that may buy products from wholesalers, distributors, and brand direct and sell direct to the consumers. Traditionally retailers have been brick and mortar stores like Walmart, Target, and Home Depot but in todays age one of the biggest is an internet company known as Amazon. Since the rise of the internet and ecommerce, new companies have emerged into the market.



Third Party Sellers


Third party sellers can be small, medium, or large businesses, as well as just a single person who sales items over a buy and sale platform. Sellers may buy from retailers, wholesalers, and distributors, as well as other 3rd party sellers. These sellers usually sell over buy and sale platforms such as amazon, ebay, facebook, and many more. They may be a regular person trying to get some cash for that unwanted box of stuff your aunt randomly gave you or someone who is selling to make a few extra bucks, or even a multi million dollar business.


Can I Become A Reseller?


Yes, you can easily become a reseller. It comes more natural to some people more than others but anyone can take pictures of stuff and list it online. This is one reason why we have so many 3rd party sellers. It only takes small investment to get started and should grow over time if that's your goal.



Is Becoming A Reseller Profitable?


Becoming a reseller is quite profitable if you are taking great care to be selective on the items you plan on selling. If you are just starting out you may not want to go and lease a storefront and be obligated to more than you can afford. Start small, show proof of concept, then increase volume and the profits will follow.



Where Should I Start Reselling?


While there are many marketplaces to start reselling they are not all created equal. I have sold on many different platforms and there are some clear winners in my book. First off, my favorite platform to resell on is amazon. It is not the easiest platform for beginners and has the longest learning curve, but it gives me the most freedom and enjoyment. Secondly, eBay is by far the next best platform to sell on in general. eBay will require more time than amazon getting your stuff listed initially, but it is less of a learning curve with a large amount of buyers ready to shop. And lastly I would recommend trying to sell on facebook marketplace. It is really good for seling bulkier stuff that's too heavy to ship.



Why Do Resellers Get A Bad Name?


In recent times resellers have gotten a bad name, especially during the pandemic. Resellers buying out essential supplies like soap and marking them up extremely high has to be the biggest highlight of the resellers mischievous connotation. Another example is the recent release of the Playstation 5, which sold out nearly in the first 5 minutes of the release among many popular retailers. and within hours the ebay listings start to pop up with prices nearly triple MSRP.



Are Resellers Important?


Yes, resellers are very important to the economy. Life without a grocery store means you would have to grow your own food. No more going to Foot Locker to grab a pair of shoes. now you have to go to your village cobbler. But all jokes aside, resellers make our lives better and more convenient. With an ample supply of resellers we have competitive prices and that is good for the market and the consumer.

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