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How do I Become a Reseller?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 02 December 2016
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The idea of becoming a reseller is appealing to many people looking for a reliable second income or even a new career. Companies benefit from the sales efforts of resellers without the need to provide a salary and benefit package. Resellers enjoy the privilege of leaving employment woes behind and creating a job situation that puts them in charge of how much money they can make. In most cases, the process to become a reseller involves a few basic steps: identifying the right opportunity, becoming proficient with the products and services, and negotiating the best commission or buy rate possible.

As more companies create reselling programs to supplement or even lead their sales efforts, the number of opportunities to become a reseller have increased significantly in many industries. The options range from reselling telecommunications services such as long distance, Internet access, and teleconferencing options to reselling goods like candles, home cleaning products, and electronics.

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To identify the right type of reselling program for you, it is important to draw upon your background to inspiration. Are you proficient with online applications such as virtual meetings? Reselling web and video conferencing may be ideal for you. Perhaps you know a great deal about using natural elements to clean the home. Becoming a reseller for a line of “green” home cleaning products may be a great fit. By taking into consideration your knowledge, skills, and hobbies, it is possible to focus on reseller options that will provide you with a steady source of income as well as provide a great deal of personal satisfaction.

Along with finding the right opportunity, it is a crucial to become a reseller of goods or services that you can understand thoroughly. The ability to evaluate the needs of a customer and identify specific applications that will be of special interest to the client will greatly increase the chances of making a sale. This means you must believe in what you sell and honestly believe that what you have to offer is of value to the customer and will make their lives easier.

Once you have identified reseller opportunities that are a good fit for your skills and that you can sell with full confidence, you will want to go for the best compensation package that you can command. When you become a reseller, your income is dependent on your sales volume. If you are able to earn a higher rate per unit sold, your chances of establishing an attractive revenue stream increases significantly.

Companies normally compensate resellers in one of two ways. The first is known as a buy rate. Essentially, the vendor sets a wholesale price for the goods or services you sell. You, in turn, set the retail price that the customer will pay for those goods and services. By obtaining the lowest buy rate possible, you maximize the amount you will earn per unit sold. The lower buy rate also allows you some flexibility in setting retail pricing and being competitive in your market.

The second compensation model for people who want to become a reseller is the percentage approach. The vendor sets the retail price per unit and compensates you with a fixed percentage off each unit sold. With this model, the goal is to negotiate the highest percentage possible. If two different companies offer products of comparable quality and price, chances are you would benefit from signing with the vendor who offers a ten percent commission rather than seven percent.

The actual application process for becoming a reseller is somewhat like applying for many types of employment. Vendor partners will normally require you to meet some type of basic criteria in order to be eligible for acceptance into the reseller program. In some cases, you may need to commit some type of resources on the front end. However, many programs today do not require spending anything in order to become a reseller. Once you are accepted into the program, there may be some minimal sales you must generate in order to retain your status. Make sure you read all the terms and conditions before committing to anything.

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Discuss this Article

anon351854
Post 6

Does anyone know the start up costs of becoming a reseller?

anon338459
Post 5

An outstanding article for potential resellers. A very important part of the decision to become a reseller is the market that you wish to serve and focus on. There are a lot of dynamics in some of the traditional reseller markets as organizations continue to become distributed and communications becomes more multimedia. There is a great opportunity to participate in the conference and collaboration market by reselling web conferencing/video conferencing/audio conferencing systems (such as the RHUB TurboMeeting system). The multimedia communications market is the one that is growing (as endpoint video and phone system markets stall out) offering opportunity for resellers and providing incentives for value add features.

Esther11
Post 3

@Clairdelune - I know some couples who work from home reselling software products from a website. They bought the website from someone and then downloaded templates and whatever else they needed to run the business.

To make sales in both the door-to-door and the website methods, you really have to learn a lot about your product. You need to get a good wholesale price from the company, so you can charge a high enough retail price to make a profit.

I'm not sure whether reselling door-to-door or reselling online is better. At the start, it's probably difficult to resell or to make very much money. But, once you get organized, the online is probably less work. Then again, some people like to get out, be active and talk face to face with their customers.

Clairdelune
Post 2

I guess I didn't realize how reselling works. A salesman came to our house a few months ago. He gave his spiel on green products to clean the house. He did such a good job of marketing his products that I bought a few cleaning products from him.

Now, usually I tell door-to-door salesmen that I'm not interested. But, this green product's guy seemed to be very well trained. I wonder if they go to some training classes to learn how to become a reseller. I'm also wondering if the door-to-door sellers do better than those who sell on the internet. My brother-in-law needs a job. I think this might work for him.

Matis
Post 1

All the business options in this article had me wondering how to become an authorized reseller. It turns out authorized resellers don't pay sales tax on the low cost stock they purchase. But they do charge sales tax to customers, this is what gets submitted quarterly to the state government. You need to file your business name, usually get an Employer ID number, and get a sales permit.

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