Starting a reseller business could be a lot easier and cheaper than you think! There are many types of reseller business that you could start. Some reseller businesses require a physical premise and stock, however some reseller businesses can be run entirely over the internet without out pre-purchasing stock. This means you could start reselling products & services online quickly, easily and with little or no capital investment.
Whether you want to start a reseller business as a full time business or part time as a secondary source of income you will need to plan your business to be successful! This article will give you a basic overview of some considerations to get you started.
Choose the type of reseller business you want to start
In simple terms a reseller is simply resells the good or services of another company. There are many types of reseller businesses that you could start so first you need to identify which type of reseller business is right for you. Resellers may purchase stock from suppliers at trade prices and then resell with their profit margin added on top or sometimes resellers refer sales to suppliers in return for commissions. Either way can be just as financially rewarding and the route you choose will mostly depend on which industry you wish to start your reseller business in and also whether you have capital behind you.
Indentify the industry you wish to start your reseller business in
It’s generally advantageous to have knowledge of the industry before starting a reseller business and although not essential particularly if you refer sales to suppliers. However it’s much easier to get started if you know the products, manufacturers, and resellers that you’ll be working with. If you are considering starting a reseller business in a new industry you should research industries of interest and contact potential suppliers for product information, terms and pricing. Ideally you should look to sell products that you feel passionate about and believe in, within a market that is not over saturated and too competitive.
Where and how to sell your product online?
Firstly, there is no shortage of places to sell your product. The difficulty is choosing which ones suit your brand and will enhance the offering you may or may not already have. When choosing a physical shop presence, your first thought would be to find the location best for attracting potential customers. The same is true for online. Here is one of the top tier levels to consider before you begin looking at the many platforms available:
Hosted vs self-hosted eCommerce solutions
If you want to set up a full website where people can come to view your products and your products only (as opposed to a marketplace such as Amazon or eBay), then you’ll need to choose between a hosted or self-hosted ecommerce platform.
A common analogy used to understand the difference between self-hosted and hosted ecommerce solutions is the difference between buying and renting a house. When you rent a house (hosted), you are tied to the wishes of the landlord. You can live there, but you probably can’t paint or make physical changes to the look and feel of the property. If the landlord decides to sell up or change the property, you could lose access or be forced to leave. The benefits of renting a house however, are that you can test the water before you decide to buy and you can change houses with minimal fuss or cost.
In comparison, your own house (self-hosted) means you have the freedom and benefit of choosing exactly how you want your house to look, where it is and how quickly you want to extend or build on what you have. However, having your own house is also expensive and means that you are liable for making improvements and fixing anything that breaks.
In terms of a hosted platform, the benefits and disadvantages are much the same. A hosted platform, such as Shopify or BigCommerce, is like renting a space to sell your products, hosted on someone else’s server. The benefits of this, are that the platforms are usually very easy to use, even for beginners.
For self-hosting, on platforms such as WooCommerce and Magento, you would run the software from your own platform or machine (for example, within WordPress). This gives you far more scope for customization – where you, or someone you hire, can make changes to the look and feel of your online shop front. The downside, is that if you don’t have experience with code this may be difficult and/or expensive to manage and understand.
Now you understand some of the options available to you, let’s look at a few of the self-hosted and hosted platforms that are currently out there.
Cloud-hosted eCommerce Platforms
Benefits and downfalls of two of the top hosted eCommerce platforms:
Perhaps one of the most well-known ecommerce platforms, Shopify is a Canadian commerce company, that reportedly has over 120,000 merchants and traders who use its hosted ecommerce platform. The Shopify platform makes setting up a professional online shop fairly simple, with a great range of designs to choose from and a strong technical infrastructure to build upon. Some of its unique benefits to consider include:
Example of a stationary and craft shopfront created in Shopify (via Pop Chart Lab)
Shopify templates and design
Shopify makes it easy to select and install a theme that will determine what your online shop looks like. Most of the themes are ‘mobile responsive’, meaning that your shop will adjust its size and shape depending on whether the user is viewing it on a mobile, tablet or desktop computer. This ensures that they have a great experience with your shop and can purchase products regardless of which device they use to view them on.
Shopify’s basic package starts at $29 (there is a lower-tiered plan than even this but it doesn’t enable you with an online store, just a Facebook page or button). This allows you to get a full store up and running with unlimited support, however many of the basic features you may need to run your store are then charged as add-ons to the cost.
Shopify SEO, support and marketing
Shopify offers a strong level of support to its customers, through email, phone and live chat as well as forums and tools such as its ‘Ecommerce University’ which allows newbies to learn the ropes more easily. They also offer access to their ‘Shopify picks’ Twitter page and marketing campaign, which is a daily product stream to help promote products to over 39,000 followers.
Most Shopify sites are also optimized for SEO, helping to increase traffic to your storefront. This includes having rich snippets (the text that comes under the website when you search in Google) and optimization for speed and responsiveness (both aspects that Google takes into account when deciding whether or not to surface your page).
Shopify processes all transactions and customer credit card details with 256-bit SSL encryption and is also level-1 PCI compliant. This means that customers can shop with you securely without having to worry about who is gaining access to their details. It also backs-up your website automatically, ensuring that nothing is lost in the event of a technical glitch.
Shopify mobile app and credit card reader
As well as a strong online product hold, Shopify also offers an offline version with a point-of-sale credit card reader that plugs into your phone, allowing you to make sales on the go. This can be paired with a barcode scanner and receipt printer where needed. The Shopify mobile app also allows you to track orders, and manage inventory, ensuring that you’re not tied to an office to manage your store.
Any there any Shopify Negatives?
If at some point you do decide to move away from Shopify, the platform doesn’t let you download your data to move it to another system, therefore, you would lose everything you have built – not ideal.
BigCommerce is an extremely popular online shopping platform for small to medium-sized businesses. This started out as software for self-hosted eCommerce but has since evolved into a hosted shopping platform. Some of its benefits include:
Example of an organic beauty brand shopfront created in BigCommerce (via Glam Nation)
- BigCommerce templates and design
BigCommerce was previously known for having designs and templates which were slightly out of date but has recently addressed this with an upgrade, meaning that it’s easier than ever to get a slick looking shop front on the platform. There are over 100 themes available, some of which are free (in a similar model to Shopify) and mobile responsive.
- BigCommerce pricing
BigCommerce’s basic shop front plan begins at $29.95 per month which is around the same price break as various other ecommerce stores. The benefit of using BigCommerce is that it offers far more features for free in its basic package than other sites such as Shopify. With other ecommerce platforms, the additional tools and upgrades are there but they have to be paid for, which can all add up to a higher monthly fee. The additional features BigCommerce offers includes built-in shipping dates, gift vouchers and 24 hour support as well as some email marketing tools.
- BigCommerce SEO, support and marketing
Bigcommerce has a strong SEO selling point, with fast page loading speed which is vital for customers and search engine optimisation. BigCommerce also allows you to integrate with Google Shopping to bring shoppers in, as well as using your product reviews to help increase ranking. The platform also integrates various marketing channels you might need for email, social media and multi-channel, and gives you access to apps to third-party platforms such as MailChimp.
For support, BigCommerce is on par with the other big ecommerce sites, with 24 hour phone, live chat and email support as well as ‘BigCommerce university’ for learning.
- BigCommerce security
Bigcommerce is level 1 certified PCI compliant, so you (and your customers) don’t need to worry about the protection of their data and you can choose to either share a SSL certificate or have your own.
- BigCommerce advanced customisation
BigCommerce offers a handful of options that allow users to manipulate their stores and stock, that Shopify does not. BigCommerce also has its own app programme, where storeowners can add additional features. For those who have some knowledge of coding, or are willing to learn, BigCommerce offers capabilities that could help ensure your site never ‘outgrows’ the platform it is built in. In a nutshell, if you have big (realistic) plans for your online shop – BigCommerce may be the way to go. BigCommerce also has a much larger international presence than Shopify, therefore if you are based in Europe or Australia, or eventually want to expand your presence that way, BigCommerce already offers a wider set of shipping options.
Any bad points?
BigCommerce was one of the platforms that didn’t include transaction fees on any of its plans but has recently dropped this, with the basic plan now accruing a 1.5% transaction fee for all purchases (Shopify charges 2% but reduces this if you are a larger user). The BigCommerce fee does go when you upgrade to a higher-level plan but this still puts BigCommerce on a level-playing field with other ecommerce platforms who also charge a basic transaction fee.
BigCommerce also has a much lower selection of responsive theme templates (only 2 out of 16 of the free themes are responsive) than sites such as Shopify which is where it really falls down, considering the importance of responsiveness to Google and general user experience.
A few other examples of hosted platforms include Squarespace, Volusion and Wix.
Self-hosted eCommerce platforms
Benefits and downfalls of two of the top self-hosted ecommerce platforms:
WooCommerce is fairly new to the marketplace in ecommerce years and is popular due to its easy integration with blog content management system WordPress, which you may already be familiar with. According to the channel’s homepage, they now run 30% of all ecommerce sites, which is pretty impressive for a newbie!
(Porter and York, a website built using WooCommerce)
Benefits of WooCommerce:
- WooCommerce is a free plugin that can be downloaded on WordPress, making it much more cost-effective than some other options. The support is also free which is of great benefit when getting set up!
- WooCommerce is a light application and doesn’t need as much server space (which can be costly) as some other platforms do
- Very simple to setup – those familiar with WordPress will not find this much more taxing than adding any other feature to the site
- Free to download with themes available that aren’t too costly and still make the site look appealing
- In terms of marketing, WooCommerce has great integrations with coupon codes and email marketing, allowing you to easily extend your shop’s reach beyond the channel
Disadvantages of WooCommerce:
- Not as many features as some ecommerce platforms, making this more suitable to smaller businesses that aren’t looking for extensive growth or scale
- The integration with WordPress, while beneficial in many ways, does mean you are tied to this CMS to use it
Those who are already familiar with WordPress, or wish to use it to build their website and online store. A low-cost option for small to medium businesses, but not those looking to grow to huge scale.
Magneto is undoubtedly the leading platform for self-hosted eCommerce solutions and was acquired by eBay in 2011, which goes to show what a success it has had in the online world.
(Mothercare IE, built in Magento)
Benefits of Magento:
- Has a cool name (I joke)
- The admin panel is user-friendly and allows those without coding experience to get a good-looking shop off the ground
- Magneto is scalable – and it should be, with clients such as Samsung using its platform. This allows you to start off as small as you like, knowing that you’ll have the potential to scale and grow at a later date
- Many issues which are common in such complex ecommerce systems aren’t an issue in Magento and there is a growing database of talented developers and users who are familiar with the platform
- Offers advanced search engine optimisation (SEO) resources, which can help attract organic traffic and customers, as a form of promotion
Disadvantages of Magento:
- Despite there being a huge talent pool of Magneto-fluent developers available, custom-development or trouble-shooting can still be expensive, due to how complex the system is.
- Magento does still offer shared-hosting options but if you decide to scale your shop in the future you will likely need your own dedicated server which can be costly!
- Can be clunky and slow-loading if you cannot afford to invest in your own dedicated server
This is a well-established platform for those looking to invest in their online shop for a long time or to eventually expand into the next Amazon. With everything you need to scale and modify, it can create a unique, well-oiled place to sell your products online.
osCommerce is also a popular option for ecommerce sites, with a huge community of developers and other users who offer free help and support for the platform.
(Huntington Beach Bicycle Company, built on osCommerce)
Benefits of osCommerce:
- Simple to use and with a detailed catalog management system which is a big plus if you have a large amount of varied products (great for those who sell ‘one offs’)
- A large support and forum base which is useful for troubleshooting or exploring new features
- osCommerce can be expanded far beyond its basic features, with over 7,000 plugins of additional features to choose from
- It is also lightweight and will not take up too much space or cost on a server
Disadvantages of osCommerce:
- osCommerce can be prone to bugs, especially if you or a developer have made moderations outside of the norm
- As a platform built for smaller users, this is not as easy to scale as some other platforms and this may cause technical problems further down the line
Those looking to get setup with a small shopfront, perhaps for the first time, which won’t need to be scaled at a later date
Selling through online marketplaces
As well as your own hosted and non-hosted website shop, there is also the option of an online marketplace. These are a good choice if your interest is to solely sell products, as opposed to start a business or develop a well-known brand. This is because marketplaces such as Amazon, Etsy and Ebay allow you to quickly add a catalogue of products and sell at low-cost with minimal support or background knowledge needed. They also give you access to their wide search database and customer flow, giving you steady trade without you having to spend time or money marketing your products. Let’s take a look at what some of the platforms have to offer:
Selling products on eBay
Ebay is an ‘anything goes’ type of marketplace, where you can find everything from vintage tables, through to hair extensions. If you can sell it, it can go on Ebay. This makes it an open platform for any type of online business but does make it slightly more difficult to cut through the noise and reach a specific audience. Ebay will also allow you to sell across the world, allowing you to expand your popularity worldwide. However, as well as being fiercely competitive, eBay will take 10% of any sales you make, which for most businesses, can seriously lower the profit margin. This can make it more expensive than selling through your own online site, especially if you’re working with more expensive items. Due to eBay’s bidding nature, the buyer is also not required to pay instantly, which can lead to wasted time and annoyance when you have to relist or resell an item.
Using Amazon as your online marketplace
Selling through Amazon gives your product a level of authenticity which many shop owners spend years trying to build. This is because the products look and feel like ‘Amazon products’ to the user, even when they are being sold through a third-party such as yourself. The fees on Amazon can be more or less than other sites, depending on if you are selling high-quantities, where you will pay a flat listing fee per month, as well as a fee based on the variable rate of what is being sold. Generally, Amazon is chosen by most sellers as a leading place to sell products, particularly for electronics, books, DVDs and similar.
Selling products on Etsy
Etsy is a dedicated marketplace suited to a niche group of users, primarily those who like to buy vintage or handmade items, although it has more recently extended its offering into digital products such as website themes and custom-design services. Due to its nature, Etsy buyers often have more cash to spend and it can be a gold-mine if your product fits the target audience (hint: cat related swag does particularly well). Whereas eBay has a fairly impersonal feel, Etsy is more easily personalised and can allow a seller to setup products without any background knowledge or technical experience which can in turn, make their offering more appealing to the customer. The downside of Etsy is that as well as listing and final sale fees (as seen on all marketplaces), you also have PayPal fees to contend with, which can subtract money from the total profit.
Other Ecommerce Marketplace Options:
There are various other marketplaces and stockist websites which can help your product to be seen. Regardless of what you are selling, there is likely to be a niche marketplace or stockist out there to suit and can lead to more success than selling on Amazon or eBay alone. This includes ASOS Marketplace for those selling fashion, Feel Unique and Cult Beauty for skincare products and Not on the Highstreet and Handpicked Collection for unique items, often sold as gifts.
The difference with niche marketplaces is the cost to sell, which is generally much higher than more established online shops and also the selection process to have your offering approved. With access to such a large, targeted customer base, these sites are keen to retain their authority with that audience and therefore will often make you apply or adhere to a strict selection process before you even begin to have a chance to sell.
When it comes to selling your product online, the choices are endless. The real detail is in making a choice that suits you, your offering and your customer and then building it from the ground up into an online shop front that you’ll be proud to call your own.