Differences between Reseller and Dropship that you must know
From the point of understanding
What is a reseller? The meaning of a reseller is someone who purchases an item from an agent or manufacturer with the aim of reselling it and earning a profit from the difference between the selling price and the product purchase price. In addition, it is seen in terms of the words used where "re" in English means return and "seller" means the seller so that the reseller is a person or business entity that buys products for resale.
Meanwhile, the meaning of dropship is a marketing system that allows someone to become a seller without having to hoard inventory. The seller can market the product he wants to sell and if there are consumers who are interested in ordering, then the goods are imported. Dropshipping is different from dropshippers, dropshipping is a sales system, while dropshipping is a business actor who runs a dropship system.
Startup Capital
In terms of business capital, the reseller system requires initial capital to be used to purchase inventory items to be resold. The capital required varies depending on the type of goods and the volume of inventory required. But one thing you need to know is that the more products you buy and the quality is good, the capital requirement you need to become a reseller is large.
Unlike the case with dropship where you don't need capital to run this business. You don't need to stock up on the dropshipping system because you only need to continue the purchase to the supplier. The supplier will take care of everything from packing to shipping the goods.
Work system
Judging from the work system, there is a clear difference between reseller and dropship. The flow of the dropshipping system is to provide a certain amount of money as capital to run a business. Where the money is used to buy goods to be resold. In the reseller system, product packing and shipper activities are handled by themselves. Meanwhile, dropshipping only focuses on marketing to attract consumer interest. The rest if there are many consumers who are interested in the products offered, the dropshipper will forward the order to the supplier and the supplier will package and ship the product to the consumer's address.
Goods Stock Mechanism
The next difference is related to the goods stock mechanism, where the reseller, in this case, purchases the product and then sells it again so that the reseller stocks the goods first. The difference with dropship here is that dropship does not stock goods. Dropship only does marketing by posting photos of the products it sells.
Marketing Mechanism
In terms of marketing mechanisms, resellers can do online and offline marketing. This is because the reseller stocks the goods so that the reseller can provide information on the form of the goods he is selling. Meanwhile, dropshipping can only do online marketing, considering that the dropshipping system does not have inventory that it has hoarded to sell.
Both advantages
Reseller Strengths
- Can provide information on goods sold in as much detail as possible to consumers
- Can offer products directly to consumers
- Consumers tend to believe because there is a physical form of the goods that consumers will buy
- Sales can be made online and offline
Dropshipping advantages
- Does not require capital to run a business
- Can sell as many kinds of products that you want to offer to consumers
- Flexible working hours
- Don't bother thinking about product packing and shipping problems
Disadvantages of both
Reseller Disadvantages
- Resellers need large capital to start a business
- The risk of goods not being sold or damaged is at your own risk
- Troubled with the stuff of packing and shipping
- Need a place to store the product
Disadvantages of Dropshipping
- Lack of consumer confidence because goods cannot be seen physically
- The profits are not very big
- The risk of possible order cancellation by consumers
- Busy with the receipt number that must be sent to consumers
Customer service
The difference in consumer services provided to resellers is basically the same as traders in general. Services that can be provided by a reseller sales system can be in the form of receiving orders, two-way communication by buyers and sellers, arranging packing and shipping activities themselves. While dropshipping itself provides services in the form of communication between consumers and sellers, so it is important in this case for a dropship to provide good communication to consumers.
Now, after we know the difference between reseller and dropship above, you can decide whether you want to be a reseller or dropship. If our advice is that if you currently lack the capital to become a reseller, then you should first become a dropshiper. Later, if you have enough capital and you have a lot of customers, then you can become a reseller. Maybe that's what we can share with you olshop fighters. Hopefully this is useful 😊
