Difference between Reseller and Dropshipper

Difference between Reseller and Dropshipper: Profits, Capital, and How it Works
Difference between Reseller and Dropshipper: Profits, Capital, and How it Works

Difference between Reseller and Dropshipper – It turns out that there are still many people who are confused about the difference between a reseller and a dropshipper in buying and selling online. If you want to start an online business as a side hustle, you must know the difference between these two terms. The reason is, that both the reseller and dropship systems are very suitable to be run by beginners or for those of you who want to do business with minimal capital.

Difference between Reseller and Dropshipper

Reseller and dropshipping systems have the most obvious difference in how they work. Previously, you need to know that the seller with a system of buying goods and then reselling them is called a reseller, while in the dropship system it is called a dropshipper. So, how do the two work differently?

Both of them resell goods from suppliers, but the sales method is different. Resellers buy stock of goods to suppliers at wholesale prices, then resell them to the market at a price determined by themselves. The price can be the same, cheaper, or more expensive than the retail supplier’s price.

The dropship system does not require you to buy stock, you can directly market the supplier’s products at a price that you set yourself. The price set is the retail price of the supplier plus the profit you want to take. In this system the goods will be sent from the supplier directly to the customer, so you are only an intermediary between the two.

Differences in Reseller and Dropshipper Capital

The second difference is in terms of capital. Basically, both are known as businesses that can be done with minimal capital. When compared, the reseller’s capital will be greater than the dropshipper.

Dropshippers only need a smartphone, internet connection, and time to sell. A dropshipper does not have its own stock of goods, so you have to frequently update the stock of goods at the supplier.

Resellers need a certain amount of capital to stock goods. Generally, the supplier will provide a reseller price with a minimum purchase requirement, it can be from the number of goods or the nominal spent. For example, a minimum purchase of 1 dozen or a minimum purchase of 1 million rupiahs to get a discount, depending on the price of the goods sold and the provisions of the supplier.

As a reseller, you also have to consider the cost of shipping goods from the supplier to your place and also the costs of packaging the goods because you will be the one to send the goods to the buyer yourself.

If you have minimal capital but want to choose a reseller system instead of a dropshipper, you can also apply a pre-order system when selling. This will give you time to collect buyers, then make transactions with suppliers at once according to orders that have been entered.

Reseller and Dropshipper Advantages

These two systems have distinct advantages. Here are the advantages of each to take into consideration:

Reseller Advantages

  • Have their own product stock so they can be creative with product photos and create their own catalog.
  • No need to monitor the stock in the supplier for 24 hours.
  • Can check the goods carefully before sending them to customers to ensure the product quality is good.
  • Can sell goods at a lower price than the supplier’s retail price so that it is easier for goods to compete in the market.
  • The goods sold can be varied and can come from several different suppliers.

Dropshipper Advantages

  • Can be done without requiring any capital money at all.
  • No need to bother taking care of the shipping to customers.
  • There is no risk of the product remaining because it is not sold out.
  • No need to provide a place for the storage of goods.

Is it more profitable to be a Reseller or Dropshipper?

If we talk about profit, looking at the price set, of course, the reseller system is more profitable. You can get a cheaper price than the supplier’s retail price and are free to determine your own price. Indeed, as a dropshipper you can also set your own price, but if it is too high compared to the market price, the goods you sell will certainly not sell.

But overall, both of these businesses can be profitable. Both also have risks. You just need to choose a model that is more suitable for your current condition.

Tips for Becoming a Reseller and Dropshipper

After knowing the difference between reseller and dropshipper, now is the time for you to know the tips for starting these two businesses. Here are tips that you can apply:

  • Determine the type of item you are selling and do market research.
  • Find a supplier who can provide the best price and quality of goods. Good relationships with suppliers are very important for the continuity of your business.
  • Determine your online store brand. The product brand can follow the supplier or you can set it yourself, depending on the type of goods you sell.
  • Build your online store website and open a store on a marketplace that is relevant to your target market
  • Take advantage of social media for product promotion. You can develop it organically or take advantage of the ads feature.
  • Competitor analysis to find out the marketing strategy that is being implemented so that your product can compete in the market.
  • Create interesting promos on a regular basis to attract more customers.

So, which one is more ideal for you? Both of these business systems can bring huge profits too if done diligently and consistently. Another important thing in starting a business is to start as soon as possible, the sooner the better.