From beauty products to Google Apps to reselling consignment on eBay –
the opportunities for becoming a reseller are endless.
What are Resellers? – A reseller is a business or
business owner who buys a product from a manufacturer, vendor or
wholesaler at a lower cost and “resells” that product at a higher cost
either online or through traditional offline direct channels.
While some companies require you to carry an inventory, others may
ship goods directly to the end customer, with you acting as the
transactional/order processing interface – which makes reselling a
popular start-up entrepreneurial opportunity for home-based businesses.
The resale business model is almost limitless in its scope and
opportunity, some businesses focus exclusively on resale as their main
source of income. Others choose to supplement their existing product and
revenue streams with resale goods (either by becoming an affiliate or
channel partner of the manufacturer – a common approach for small
There are many channels for reselling goods. Some entrepreneurs
resell goods through eBay or via their own Web sites. Others sell
through their stores, or direct through B2B or B2C sales channels. Some
even buy from eBay and resell through another channel.
While it’s somewhat of a misconception to suggest that becoming a
reseller requires little up front risk-taking, training or skill,
becoming a reseller does offer entrepreneurs a great way to get into
If you are interested in becoming a reseller, here are a few
things to understand about how the reseller industry works together with
some pointers for finding, assessing and securing the right reseller
opportunity for you.
- Finding the Right Fit
Finding the right fit means starts with finding the right product(s)
or service to resell. This doesn’t mean you have to be a product expert,
but you do need to be able to feel and demonstrate the motivation and
emotional investment needed to make your resale business a success.
To assess the potential success of your chosen product, you will also
need to research and understand the market landscape (demand,
competition, price points, etc.) – something your supplier or affiliate
will hope to see you demonstrate too.
This Market Research Guide from
Business.gov is specifically geared towards small business owners and
walks you through each stage of conducting market research. It also
includes links to free market and demographic data.
- Finding the Right Opportunity
If you are looking to supplement your existing products and services
with a resale relationship – for example, you specialize in computer
repair services, but want to expand your offerings to include computer
hardware and peripherals – you might want to consider a resale
opportunity with a known brand manufacturer.
On the other hand, if you are a start-up and are interested in
becoming an Internet reseller, you may need to dig a little deeper. Read “Step One to Becoming an Internet
Reseller: Choosing the Right Product” in which StartUpPrincess.com
expert, Erika Wilde offers tips for not only finding the right product
to sell but also how to find and approach the source of that product,
whether it’s a manufacturer or Internet wholesaler.
- Avoid Scams
Be mindful of business opportunity scams – many of which prey on
home-based business owners with enticing work-at-home schemes. The
government keeps a keen eye on much of this activity and through
Business.gov offers advice about evaluating business opportunities, looking out for
scams, as well as how to report scams.
- Have a Business Plan
As you start to research reseller business opportunities, start to
think about formalizing your ambition with a business plan. Writing a business plan not only makes you think long
and hard about the market opportunity, it will also help you build a
clear view of your goals, and most importantly how you are going to
reach them. It will show potential affiliates, wholesalers and lending
institutions that you are serious about your venture.
- The Application Process
Most reseller opportunities start with an online application. Be
prepared to submit information about your business profile including
your company size, years in business, number of employees, region of
service coverage, selling channels, Web presence, online merchant tools,
and so on.
From here the manufacturer will determine whether they believe you
are a good fit for their program.
- Understand the Compensation Model
Resellers are typically compensated by either a “buy rate “or a “percentage” model.