What Is a Reseller? Types and Benefits

By Indeed Editorial Team

Published May 25, 2021

Resellers play a vital role in both the retail and wider economy, where they serve as the link between manufacturers and the consumer. Resellers are in the market to sell for a profit, but they also help distribute merchandise, provide storage and identify customer preferences. Knowing the duties and responsibilities of a reseller can help you decide whether it is an ideal job for you. In this article, we discuss resellers, what they do and advantages of the profession.

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. These professionals save manufacturers the cost of marketing and selling their products, helping to save their time, money and effort.

Related: What Is Merchandise Retailing? (With Best Practices and Tips)

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:

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.

Read more: How To Become a Wholesaler: 8 Steps

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.

Related: 11 Steps To Become a Retailer

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.

Distributors may have exclusive buying agreements with manufacturers and play an active role in promoting and advertising a company's products. For instance, a distributor might organize demos, promise free samples or give discounts to persuade others to buy a product.

Related: Your 6-Step Guide To Becoming a Distributor

What are the benefits of being a reseller?

Reselling has become a popular career path, 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:

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.

Flexibility

Reselling provides some flexibility in your career path, as it allows you to choose from a wide range of manufacturers and 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.

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.

Manufacturer support

Resellers often enjoy a wide range of support from manufacturers and product producers. Producers and manufacturers provide technical, marketing and logistical support to aid the operations of their resellers. They can also provide training to help resellers understand the features, functions and benefits of their merchandise. Some producers and manufacturers also provide marketing channels that can help resellers improve engagement with customers.

Reseller education requirements

The education requirements for resellers depend on their industry and the products or services they sell. People who sell everyday commodities can be a reseller with a high school diploma or equivalent. If you want to resell software and other technical products, you might need to be familiar with the features and functions of the item to help buyers get value from their purchase. For products related to health and other specialized fields, employers might require resellers to have a degree and several years of experience in their industry.

Reseller work environment

A reseller can work in a wide range of environments depending on the scale of their operations and customers. Resellers working on a smaller scale may work from home, keeping merchandise in a spare room or storage space. Established resellers with larger operations may have a physical warehouse. Some resellers facilitate transactions via online stores and websites, especially those that engage in drop shipping and other types of e-commerce.

Resellers can also combine offline and online sales channels to make the shopping experience convenient for buyers. Online stores can also help them reach more customers by leveraging the power of social media and other web-based marketing and sales techniques.

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