People often come across business-related terms like resellers, dealers, and partners particularly in B2B ecommerce. Sometimes we might end up using these terms interchangeably. But each term has its connotation and should only be used in specific scenarios. So dig deeper into this guide to clear your concept regarding the three terms. In addition, if you’re looking to enhance your business requirements, Invensis will be your perfect choice. Invensis is a reputed leader in empowering numerous global businesses and organizations through high-quality back office BPO services that promote enhanced business efficiency and improved bottom line.
Table of Contents
- 1 Resellers
- 2 Dealers
- 3 Partner
- 4 Get in Touch with Invensis: The Most Trusted Partner?
- 5 Wrapping up
- 6 Frequently Asked Questions:
Some companies purchase products and services, but they don’t consume them. Instead, they resale the services to others. The ecommerce industry includes various resellers who are affiliate marketers. Retailers can also be considered resellers because they purchase goods for end customers. Even wholesalers are resellers because retailers buy from them.
A reseller resales goods at higher prices than they purchased to gain profits. The reselling chain goes through a rise in price from manufacturer to retailer and the end consumer. Each person in the reselling chain makes some profit by reselling goods or services.
Sometimes the prices are increased by adding value through repackaging or combining similar products. Retailers are usually the most common type of resellers. A reseller is often a registered business or individual. They want to increase their revenue through each resale.
The retail chain often involves a distribution process. It means that merchants buy goods from wholesalers. They directly sell them to the end consumers. They wish to make a major profit margin on each resale. Therefore, they modify the prices of commodities.
Resellers sell at a price that is usually not too far from the manufacturer’s retail price. Some resellers add unmatched value to their products. It can be done in the following ways:
- Product repackaging
- Creating a realistic price structure
- Working with fast carriers
Reasons Behind the Growth of the Reseller Business Model
The ultimate purpose of everyone in the reselling chain is to generate substantial profit for every sale. The reselling model is not just restricted to brick-and-mortar stores and is gradually entering the B2B e-commerce industry. More than 475 thousand results can be found on Instagram after searching with the hashtag “reselling.”
A few reasons behind the boom in the reseller business structure are as follows:
Easy to Start
Anyone who wants to launch a business needs to arrange some startup expenses. For beginners, setting aside a huge budget is often impossible. The reselling model comes to the rescue of people with a small budget. The technique is used by countless retailers. Resellers can choose to sell on sales channels, marketplaces, and even social media.
Retailers who sell products using the basic plan from Shopify need to pay only $29 per month. It is nothing compared to the cost of setting up a physical store. Even the risk margin is lower for people opting for the reselling model.
Building an inventory is not compulsory for selling products online. You will only have to look for a place to sell your products. Online retailers can easily list their products on marketplaces like Amazon and eBay.
You will have to focus on sourcing your niche products. Apps like Oberlo will come to your rescue in this process. They can be integrated with sales channels like Shopify. After syncing the platforms, resellers can import high-selling products in bulk.
The sales channel can auto-update the stocks and variants to keep your inventory updated. When you resell products at an outlet, you don’t need to stock shelves with products. Having inbound stock sales will be enough for making sales.
Adjustable Profit Margins
The reselling business model does not require you to abide by the manufacturer’s suggested retail prices firmly. Online marketplaces and sales channels enable you to fix your prices. You can calibrate the price margin to gain a better market share.
Wholesalers buy goods from suppliers in bulk. Therefore, sourcing goods at discounted prices is a major advantage. But wholesalers sell the goods to retailers at a higher price and make huge profits.
Hassle-Free Order Fulfillment
Online reselling is more convenient than offline reselling. Drop shippers can take care of the logistics by contacting order fulfillment services. For instance, you can leverage the Amazon FBA service. The program includes well-developed shipping solutions.
The shipping solutions are not just far-reaching but also cost-effective. Of course, it will cost some amount to avail of the fulfillment services in e-commerce industry. But a reseller can always make up for the costs by adjusting the selling price. Moreover, the fulfillment services usually combine with carrier companies like DHL and FedEx. Therefore, you can expect swift deliveries all over the world.
Dealers are individuals or companies who purchase and sell securities through brokers or personal accounts. They are responsible for creating liquidity in the industry. They are also responsible for enhancing long-term growth opportunities. Dealers also offer services to investors.
They are usually considered the markers of the market. They create the opportunity to pose and bid quotes against security prices. Dealers are responsible for executing orders for customers.
They are highly prominent in the securities market and have important roles to fulfill. They have to find profit between the ask and bid prices. Even though dealers play important roles in the market, they should not undertake the business for clients. Dealers also can’t make transactions between two or more parties.
Dealers do not have the same responsibilities as traders. A dealer purchases or sells securities for the business. Therefore, they make up a large part of business activities. However, traders buy and sell securities for personal accounts. Therefore, they don’t make up a part of business activities.
Difference Between Dealers and Brokers
It’s easy to get confused between the two terminologies. But dealers and brokers are completely different from one another. They both can be associated with purchasing and selling securities. They also perform almost similar tasks but with a few key differences.
A major difference can be noted in the relation of dealers and brokers to the market. Moreover, the capital requirements of dealers and brokers are also dissimilar. A broker acts as a businessman and executes trades for others. But dealers trade-in business for their own.
Another difference can be observed in the fact that dealers can deal with securities from their accounts. However, brokers can only handle securities on behalf of their clients. Dealers have the authority to make significant decisions without consulting anyone. However, brokers have to consult their clients and obey their decisions.
Dealers hold more experience than brokers in trading securities. Clients pay a commission to brokers depending on their work. But dealers act as primary principals and have their own assets.
A partner can be considered an extension of any sales team. They manage, resell, and deliver products to help companies reach the market faster. The source of income for partners is referral fees. They can also generate profits by offering complimentary services like customer support, training, and consulting.
The health of a channel partnership in a B2B e-commerce industry can be measured using ecosystem-qualified leads. When done the right way, a partnership can fuel growth and generate new revenue streams. Channel partnerships are not new in the tech world. In the era of licensed software during the 70s and 80s, veterans like IBM and Microsoft leveraged the power of partnerships.
Some well-known channel partner programs are as follows:
- Managed Services Channel Program: It involves the best practices for channel partner services. It ensures compliance with legalities and establishes the validity of the programs
- Outsourcing Channel Program: Partners dealing with asset management for a limited period will benefit from this program. It included combined technologies from service providers, manufacturers, and data centers
Benefits of a Channel Partner Program
Every company, from SaaS solutions to hardware providers, has started embracing channel partnerships. You will need huge investment and effort to establish an effective partner program. To understand whether it’s suitable for your business, you should learn the benefits of partner programs:
Better Lead Generation
Every company needs to emphasize lead generation for growth. Partnering with established companies offers access to their existing customer base. The leads generated from partnerships are always highly-qualified. It can also improve the quality of business lead acquisition.
Expanded Reach of Marketing Campaigns
A partner program can increase the reach of marketing campaigns through cost-effective methods. For instance, you and your partner can sign up for a joint email campaign. You can also ask your partner to include you in their newsletters. It helps you reach customer segments that would have been difficult to reach otherwise.
Develop Strong Relationships with Customers
Businesses prioritize customers and always find ways to improve their relationships with customers. Building a relationship with customers from scratch is often difficult. But when you acquire the customers of your partner, you get an advantage. You will be using the relationship of customers with your partner to connect with them. It will become easier for you to build strong and long-term relationships.
We also covered more on channel partners in our previous blog, “What are the Different Types Of Channel Partners.”
Get in Touch with Invensis: The Most Trusted Partner?
If you want to build a stable partnership with a company, you can get in touch with Invensis. The outsourcing partner has been offering various services in the industry for over 20 years. The primary area of their operations is BPO services. Book your value-added consultation with the experts today!
There’s a reason why multiple companies are running to embrace the partnership business model. Partner up with Invensis and enjoy all the benefits that come with it to see your business grow considerably.
Frequently Asked Questions:
1. How Can Channel Partnership Improve Brand Awareness?
Partnering with companies with a well-established brand value makes your business familiar to more people. See whether your partner can talk about you in their events and promotions. Their endorsements can help you elevate your brand image in front of potential customers.
2. What Are the Requirements for Making a Channel Partnership Work?
Channel partnerships are not just between companies. In fact, they connect people who work for the companies. It requires patience and effort to set up a channel partnership. After that, you need trust, data access, and collaboration to maintain a long-term relationship with channel partners.
3. What Is the Difference Between Wholesalers and Retailers?
Wholesalers and retailers are two key players in the supply chain. While both of them are resellers, there’s some difference in how they work. Wholesalers directly purchase products from manufacturers or suppliers. They can save expenses by buying products in bulk. Retailers buy products from wholesalers at a higher price than what wholesalers pay. Retailers further increase the price of products to earn profits and sell them to end customers.
4. What Is Meant by a Dealership Margin?
A dealership margin is the profit margin earned by dealers. The profit comes from the difference between the invoice price and sticker price.
5. Who Is a Referral Partner?
A referral partner can be anyone from sales representatives to customers. Referral partners increase sales by referring customers through different channels.