Businesses produce services and goods for the benefit of consumers. But these products have to reach the users first. A variety of individuals and companies operate in this distribution phase. They include manufacturers, retailers, resellers, etc. They have unique business models and operational procedures, and knowing the difference between reseller and retailer is very important in the modern world when most of the people prefer to shop online for beauty items and all other sorts of products from online retailers/resellers.. It helps you understand the nature of commercial activities, trading, and market mechanisms.
A retailer is a person or company that sells goods and services to the public. Only small quantities or limited services are available for sale. Consumer products are the central area of interest for such a business operator. The business relies on multiple distribution channels to reach customers.
The merchant or entity deals primarily with various manufactured goods. In the reseller vs retailer battle, the latter has a unique advantage. He will sell only fresh or trendy items that have more interest among the customers. This type of business interacts directly with wholesalers.
The retailer tries to satisfy the demand from the end-users. Such a company offers various goods at affordable prices. It will also sell the products online to reach tech-savvy customers.
Reseller –an introduction
A reseller, like a retailer, also acts as a middleman in sales. But he will purchase large quantities of goods from different wholesalers. Or he will set up a distribution channel to connect the manufacturers to the consumers. The company aspires for a larger share of the market pie to rake in big profit margins.
The reselling business model works on the value-added principle. The company purchases goods and services with the sole intention of making a resale. It can even change the look or appearance of consumer goods. The new format of the product or service will be completely legitimate, reliable, and affordable. For instance, the printer from a retailer gets added with services, home delivery, and others by the reseller.
If you are still not sure about what a reseller is, here is a simpler explanation. The individual or company is just a trader of commercial products. He will buy and sell various popular goods and services without any favors. Such a company, however, may not have a physical store with address or official premises. Desertcart is one such reseller that specializes in global brands and worldwide products.
Reseller versus retailer
The global marketplace is very dynamic, productive, and socially engaging. These companies implement innovative ideas to trade in popular goods and services. By acting as product distributors or sellers, they make a positive contribution to society. Let us clarify the difference between reseller and retailer using these key parameters:
Who or what is a retailer?
A retailer runs or operates a business premises for making sales by offering the latest goods and services at transparent prices. The best examples are grocery stores, beauty salons, fashion boutiques, drug kiosks, supermarkets, etc. Some businesses also have a website along with the physical store.
Who or what is a reseller?
A reseller buys and sells all types of goods to earn profits. He may not have a physical establishment. But the businessman or company reaches the customers using websites, email, and phone facilities. They operate in a wide range of industries, along with IT. Some value-added reselling businesses include computer services, automobile dealers, furniture stores, web hosting companies, etc. Desertcart is one such business that offers both general and specialty products.
One key factor stands out in the reseller vs retailer comparison. The former is a flexible alternative for enterprising individuals. Unlike retailers, resellers take a proactive approach to buying and selling goods. They capitalize on the latest market trends and strive to build authorized networks.
- Source of products
A manufacturer implements a business idea using a specific model. His products and services reach customers through marketing tactics. Middlemen like resellers and wholesalers are essential to distribute these goods. But what is a retailer doing in this online and offline distribution process?
He is only a small businessman who sells a limited number of products. The quantity or volume of these goods is also very low. So, he sources his items from larger warehouses, wholesalers, or manufacturers. On the other hand, the reseller gets his products from retailers, individuals, and distributors.
- Prospective buyers
The corner shop or brick and mortar store is an overt business. It showcases all the products or services at offer prices, and quantities are apparent to any casual visitor. So, the end-user or customer is the main target of such a business.
In the reseller versus retailer issue, comparison profits are important. And the prospective customers will decide who wins the battle. Unlike the latter, the reseller has no qualms about the type of end-user. He will mark up the price and offer the products to a retailer, wholesaler, or an online consumer.
- Types of products
The reseller vs retailer business model can also be clear from the product criteria. The retail merchant offers original products made by the manufacturer. On the contrary, the reseller offers both fresh as well as used products. He buys and sells old video games, antiques, and collectibles. Or he can deliver new handicrafts, clothes, shoes, electronic goods, etc. However, they follow safety guidelines to assure the quality of modified or used items. It is possible to find products from different brands in both models of businesses.
- Type of conduit
One key difference between reseller and retailer is the ability to link. The retailing business acts as a direct conduit or pipeline between the wholesaler and customer by linking the manufacturer or distributor with the end-user. But the reseller can link any stakeholder in the trade cycle. And they include distributors, manufacturers, wholesalers, retailers, individual sellers, etc.
- Physical proximity
Two more determinants of the reseller versus retailer model are branding and stores. The retailing company is in direct contact with the customer. They have a specific physical store with or without an online presence. They also take stock of the goods and have a customer-friendly inventory.
But the reselling company may or may not stay in touch with the consumers. They also rebrand or repackage products using private labels. You can also find resellers who drop-ship manufactured goods to online buyers without holding any inventory in a physical store. People will shop online for fashion items from your store or any other products you are selling but they won’t be your customer as you have not added a brand there.