Resellers can cause mixed emotions. For some manufacturers, they are a dream come true. For others, they resemble something more like a nightmare.
But resellers, as with most things in life, are most often more nuanced than that. They can offer manufacturers and businesses many benefits that may, or may not, outweigh the potential headaches.
Before you decide that you feel one way or the other about working with resellers, it is worth taking a closer look at the pros and cons of a few of the options available to you and then decide the best path for your business and your brand.
Being The Only Seller
Being the only seller of your product on Amazon has its share of advantages. The biggest of which is full control over just about everything related to your product.
When you are the only seller, you can reap the rewards of exposure. Amazon has millions of active users, a reach that is unparalleled by any other e-commerce space, and listing your product gives you access to this pool of potential buyers. It really is an exciting prospect and by optimizing your listing and creating Enhanced Brand Content, you can really set your listing apart and be successful beyond your imagination.
Controlling your brand reputation is also much easier when you are the only seller. You do not need to worry about anyone coming in and tarnishing your reputation or undercutting your price. The buck stops with you. While this can be stressful, it is also a powerful position to be in. It means that if anything crops up with your brand, you have complete power and control to remedy it. Quality control, customer service, and brand exposure are all in your own hands.
But being on your own in the marketplace is not always sunshine and roses. If you are just starting out and trying to grow and build your brand, it can be difficult to gain traction and get noticed. If you are the only one listing your product then, well, you are the only one listing your product. As mentioned above, there are plenty of things you can do to improve your listings and your Best Seller Rank but there are never any guarantees.
While it is always important to protect your brand and reputation, it is doubly important to do so when you are the sole retailer. One great way to do this is to apply for the Amazon Brand Registry. This will offer you a layer of protection by making it more difficult for other sellers to alter your product pages, ensuring that they are presented exactly as you want them to be. This will certify you as the brand owner and prioritize your content contributions above all others.
Having One Or Two Trusted Resellers
Sometimes, having a reseller or two that you can trust is a solid way to grow your brand. Many professional resellers have their own customer base and when you sell your products to these retailers, you are automatically exposed to that base. These resellers have likely also built up their fair share of product reviews which can work to your advantage. These product reviews will stick with your product, helping to build the strength of your own listing. If you are just getting started with your business, you are not likely to have many reviews, which does not sit well with potential buyers. Customers rely on product reviews to help them make their purchasing decisions so the more they see attached to your product, the better.
Similarly, successful resellers have lots of experience marketing the products they sell, meaning they are likely able to move your product quickly. By optimizing their listings or using pay per click ad campaigns, resellers may be able to get your product in front of the right audience immediately, significantly boosting your sales.
If you need quick money, especially at the beginning of your business venture when cash stores can be low, resellers can help. Resellers will buy your product from you. This gives you an income before your product is ever even sold to a buyer, and resellers can also ease some of your workload. Selling your product to a reseller means you are giving them the responsibility of storing the product, managing inventory, shipping it, and handling any customer complaints or returns.
Of course, like being the only seller online, using a few resellers can have its drawbacks.
As we just mentioned, selling your product to a reseller means giving them the responsibility of handling your product -- this is not always a positive. Giving a reseller responsibility also means giving them control. Once the product is out of your hands, you have no say in how they market it or how they represent your brand. Resellers will be able to alter your product listings without notice which can negatively impact your brand.
While the quick cash supplied by a selling to a reseller is a nice shot in the arm, it is not the most profitable way to sell your product. You will not make the margins selling to resellers that you would if you were selling the product yourself.
And speaking of margins, resellers are able to set their own prices for your products and if they decide to bottom things out and sell them for less, it could force you to do the same in order to stay competitive and maintain the buy box. This will reduce your profits and may even do damage to your brand. Items that are sold for low prices are often perceived by a buyer as being of lower quality, even if that is not the case.
Having Multiple Resellers Across Multiple Channels
The more resellers your have, the more exposure you can gain. With each reseller comes a new audience that you may have had a difficult time reaching on your own. This is especially true for resellers that are established in marketplaces where you are not. These resellers will know how to properly target the buyer persona in these spaces which gives your brand a certain level of legitimacy and appeal that may have been missing if you entered the sales space on your own.
But the more resellers you have, the harder they are to track, and the more places things can go wrong.
For example, the more sellers you have the harder it can be to track their actions. Some may decide to rip off your product and create their own or they may use your product to spin off and create their own related product line. This is a problem because this means they are standing on the shoulders of your brand to improve their own profits. All well and good for them, but a potential disaster for you. You will have no control over the quality of these knock-offs and spin-offs. And because of your brand’s relationship to these sellers in the past, customers are not likely to make the distinction between your quality products and the shoddy ones being offered by the reseller who has now turned into your competitor.
This potential problem, coupled with the reduced margins and pricing wars mentioned above, makes having a large number of resellers a complicated way of doing business.
Resellers can be a great way to kick-start your brand. They can offer you brand exposure, product reviews, and quick cash. But they can also do significant damage to your reputation.
In order to reduce potential harm to you and your bottom line, it is important to do your research. Investigate any potential resellers. Look into their history and see if they have spun off products in the past. Read their product reviews to determine their customer service levels and their own quality control. If they ignore these factors or do not maintain a standard you are comfortable with, you are best to stay away.
It can also be useful to establish a Minimum Advertised Price (MAP) agreement. These agreements help to set the lowest price at which resellers can advertise and failure to comply can result in an end to your business relationship.
When all is said and done, resellers can help to expand your business quickly and with minimal effort from you, but the potential risks to your brand’s reputation are not always worth it. The one guaranteed way to not get burned is to reduce your need for resellers. It can be overwhelming to handle all facets of a business on your own but by shoring up your practices and learning the ins and outs of marketing, inventory control, shipping, and customer service, you can skip working with resellers and keep all the success for yourself.