How can we start an online retail business without requiring large capital or costs? It sounds impossible and far-fetched, but it’s possible to do. There are many examples of people who started small retail businesses that have now become big, well-known brands. There are many people who want to start an online business but are discouraged because of a lack of capital, no goods, and do not have a brand. Actually, you don’t have to have your own product to become an online retailer, you can sell other people’s products that you have labeled with your brand. Interesting right?
The e-commerce reseller business model is a business that does not require large inventory and capital. This is proven by the increasing number of resellers in Indonesia. Many also started their business by becoming resellers before finally having a rapidly growing business. Come on, let’s discuss the reseller business model further here.
What is a reseller or dropshipper business model?
A reseller business is a business that sells goods or products from large wholesalers or directly from manufacturers and sells them to consumers on behalf of the reseller shop. Unlike business models in general, a reseller does not need a separate product and inventory to be able to run this business.
This reseller business model was adopted from the United States which knows it by the name Dropshipping business model. The process is the same, starting from cooperating with a collector who will send goods if they receive an order, then sell them through the website, or word of mouth.
When a customer orders goods through a reseller/dropshipper, they directly forward the order to the manufacturer who will send the order to the customer with a label from the dropshipper. So the customer will think that he ordered a product directly from the seller, but actually all you do is sell the product and pay a commission, while the manufacturer will ship the item. So you can make a profit without having to own goods and inventory, or other forms of business investment, producers get profits because the goods are sold, and consumers receive the goods. This is a very profitable situation for all parties.
The practice of resellers in Indonesia has been around for a long time, now resellers get products from various existing e-commerce such as Tokopedia, Shopee, Bukalapak, and many others. They then use various sales methods such as using social media and platforms such as WhatsApp , Instagram, Facebook and many others to find consumers and be able to sell existing products.
The difference between resellers and distributors
Many people still equal selling and distributors. Even though they look the same, there are some differences between the two:
Resellers do not stock goods like distributors
Distributors buy wholesale goods from manufacturers and store them in their warehouses as stock, in contrast to resellers who only do business based on existing demand and do not have to stock any goods. The role of resellers is simply to act as intermediaries for producers and their customers.
Distributors have strong relationships with manufacturers
Distributors tend to have stronger relationships with manufacturers because they buy goods directly and help sell those goods, as well as doing a lot of other things like taking care of licensing, labeling, and much more. Meanwhile, resellers only play a role in offering these products to consumers and do not assist producers in marketing and labeling matters.
Advantages of the reselling business model
Does not require large capital
When you become a reseller, you don’t need to make an item or stock it. You can immediately start a reseller business with little or even no capital, because you only need to be an intermediary in purchasing goods.
Can sell a lot of stuff
When you become a reseller, you are free to sell any items. You can offer a variety of goods from multiple manufacturers to buyers. Make sure the products you offer are of high quality and are in great demand.
Easy to do
Becoming a reseller is very easy, you can do it in minutes. However, before you start, make sure you have prepared media to be able to offer products such as websites and social media, and also make sure you have at least one producer.
Self-determined profit margin
In the reselling business model, you as a reseller can determine the price you will offer yourself, with this you can increase your profit margin. However, it’s a good idea to do a survey first about market prices and competitors who sell similar goods.
Platforms that you can use to help sell
The following are platforms that you can use to find consumers online:
social media
Now social media can become a platform for buying and selling. With the social commerce phenomenon, companies must be able to connect with their customers through social media such as Facebook, Instagram, WhatsApp, and even TikTok. You can use social media to connect with consumers and sell products.
Tokopedia
E-commerce platforms like Tokopedia can make it easier for you to run a reseller or dropshipper business. Tokopedia itself has a feature that can make you sell goods as a dropshipper directly, of course before you can sell goods as a dropshipper you need to log in and create an account first.
Shopee
You can also use Shopee, which is one of the most popular e-commerce platforms in Indonesia, to run a reselling business. Just like Tokopedia, Shopee also has a feature for those of you who want to become direct resellers (dropshippers). Of course, this will make it easier for you to determine what you want to offer consumers.
How can you start an online retail business without large costs or capital?
Identify the industry, future prospects, competitors, and determine your product.
Online reselling business is a fairly competitive business. Therefore, do market research first before jumping in, especially in terms of market prospects, competition in the market, and many other parameters.
Determine supply of goods
Finding the right supplier of goods is something crucial. Many new resellers ignore this because they are chasing high profits at the start. Make sure you have a reliable supplier of goods and are thorough in running a business. You can look for suppliers on e-commerce or by looking for local manufacturers for products that are easy to sell.
Build the right communication network
Finding the right way to reach potential customers is important for a reselling business. You need to find out where your consumers are or with what media they usually communicate. After that, use effective communication channels to reach them, such as blogs, websites, social media, and so on.
Market it right
You know that the products you offer are quality products and can be useful for customers, but customers don’t know what products you offer. You also have to market your products properly and correctly so that consumers understand the products offered by you.
Specify the payment method
The payment method you use for transactions will really help you. Consumers are very careful with their money, if you don’t use a trusted payment method, they won’t transact with you. Use an easy and reliable payment method.
Conclusion: You don’t need a lot of money to start a business
Doing a reselling business does not require a lot of money, what is needed is effective communication skills, marketing skills, and the ability to sell goods. If you can convince customers to buy products from you, then a reselling business is the right business for you.
You should also know that selling is a small step you can take to build a big brand. If you want to be a big player, you can start by becoming a reseller or dropshipper to earn money, after that you invest the money and make your own product, and you already have a brand to develop.
E-commerce business is a business that can generate a lot of profit. However, this business also requires expertise to streamline processes within, and with the help of logistics aggregators such as NimbusPost for delivery services and many others.
