The terms distributor and reseller are very familiar in business which supplies products from the factory to the end-consumer. If you are starting a business, it is very important to know the difference reseller and distributor since their level is different in business, as well as the task given by the factory.
The role of distributor and reseller is different as well. Their task has a different scale even though they have a certain target of sales that they should reach to maintain the business. What are the differences between the two of them? Read more about those terms and their differences here.
The Main Difference Reseller and Distributor
The Meaning of Reseller and Distributor
A reseller is the person or smaller company that will distribute the products to the end-consumer. They do not take the products directly from the manufacturers or factories because their scale is small. They buy in minimum order and the purpose is to sell the products again. Sometimes, we can say reseller as retailer as well.
It is different from distributors because they have authorization or official signatures from the manufacturers to distribute the products or goods. The distributor will not be able to sell the products in minimum quantity. They sell it to resellers or retailers. Their main responsibility is distributing on a big scale.
Approach to The Manufacturers
Distributors have close relationships with the manufacturers. The difference reseller and a distributor is distributor will sign a formal agreement about distributing the products. It means distributors promise that they will not sell fake products to the retailers. At the same time, they are the official partner pointed out by the brand itself.
Resellers do not have close relationships with the manufacturers because they do not sign partnerships with them. Since they sell in small quantities to the end-consumer, they only take the goods or products from distributors. Resellers are obligated to follow the rules set by the distributor which can be different among distributors.
The People in Reseller and Distributor
The people in the difference reseller and distributor are not the same. A distributor is likely to be a company because they have to order in big quantities. This business should be legal because they should rent or own a warehouse to keep the stock. It is harder to run as a non-company since the scale of the distributor is big and needs more people to manage.
Meanwhile, a reseller does not have to be a company. It can be an individual who resells the products to other people. Since it is likely done independently, a business starter can be a reseller because the capital they need is low. The operation of a reseller is more flexible and anyone can be a reseller as long as following the distributor's obligation.
Target Sale
The target sale is also a difference reseller and distributor. For distributor, they have a high target because they have to distribute the goods or products to retailers. The number of targets should be set by the manufacturers. The stock the distributor has is coming from the manufacturers directly.
Meanwhile, a reseller has a target to reach, but it is low. The minimum quantity will not be the same as the distributor. Their responsibility is also low, but they usually get some obligations set by the distributor. A reseller should repurchase in another minimum quantity to the distributor in a certain period according to the agreement.
Distributing and Marketing The Products
A distributor has a responsibility to distribute and market the products. This helps the manufacturer and brand to raise brand awareness as well. They should promote the products on social media or other platforms to increase the number of sales. A reseller does not have to do this.
Profit Level
The reseller has a lower profit than the distributor because they buy in small quantities. However, they can set the prices according to their market condition to the end-consumer. Distributors have high profits because they are the first hand from the manufacturers. Yet, they cannot set the price because manufacturers decide it for them.
Platform for Sale
The platform to sell the goods is different between the reseller and distributor. A distributor sells via e-commerce or big platforms and the brands will recognize them as partners. Meanwhile, a reseller can sell the goods independently with or without online platforms.
After knowing the difference reseller and distributor, you have to determine which way of communication will help you engage with resellers or distributors. A device as an SMS broadcaster is more practical than a phone which can send messages to many users at one time. It is more efficient for broadcasting in your business.