Meaning of Reseller and Dropship in Sales System

Maret 15, 2023

If you are active in buying and selling activities both offline and online, you must be familiar with the terms reseller and dropship. These two terms have indeed become part of a sales system that has been widely practiced lately. But do you already know what reseller and dropship mean?

Currently the sales system is more and more diverse. Not only selling directly or direct selling, but there is also a sales system with reseller and dropship principles. Usually these two sales systems are widely used for online selling activities.

To find out what dropship and reseller mean, let's look at the following review.

Definition of Reseller and Dropship

Before discussing further about the reseller and dropship sales system, first know the meaning of these two terms. This will make it easier for you to know the difference between dropship and reseller more clearly.

Dropship is an activity of selling goods by someone, by promoting other people's merchandise without having to prepare stock of goods. So the dropshipper only needs to work with the seller or supplier of goods and then become an intermediary between the buyer and the owner of the goods.

Meanwhile, a reseller is someone who promotes and sells goods back with the stock of goods available. Resellers work with producers or distributors to obtain goods that will be offered to buyers. This reseller activity usually does not require a large capital because it will get a special price from the producer.

From the understanding above, it can be seen that what is a reseller and dropship are two very different things. A reseller needs to spend capital first to sell, but a dropshipper can sell without having to have capital.

The difference between Dropship and Reseller

After knowing the meaning of dropship and the reseller example above, now is the time to review the differences. There are many differences between resellers and dropships, including:

1. Stock Goods

The first difference between dropship and reseller is the stock of the goods they have. A dropshipper does not need to have stock of goods, while a reseller must first supply goods from producers before selling.

The dropshipper's task only needs to be to promote goods to consumers while the packaging to delivery process will be carried out by the producer. Meanwhile, resellers must carry out more complex activities, starting from supplying goods from manufacturers, promoting, packing and sending goods to buyers

2. Required Capital

The second difference between resellers and dropships is the capital issued. A reseller must spend sufficient capital in order to be able to supply goods from producers. Meanwhile, dropshippers do not need to spend capital because they are only tasked with carrying out sales promotions. Later the stock until the delivery process will be carried out by the owner of the goods.

3. Profit

Judging from the understanding of what dropshipping is and how it works, it is certain that the benefits obtained are different from those of resellers. Resellers can get much bigger profits than dropshippers because the goods sold get special prices from distributors.

Meanwhile, dropshipping will only earn a few percent of each product it successfully promotes. The more products that are successfully sold, the greater the profit percentage.

4. Marketing Strategy

You can also see the difference between reseller and dropship from the marketing strategy used. A reseller usually uses a more complex marketing strategy, from direct selling to selling online. Meanwhile, dropshippers usually only do online marketing through social media such as Facebook, Instagram, TikTok and so on.

5. Risk

The risks of selling with a reseller and dropship system are of course also different. Sales with a reseller system are much riskier when compared to dropshipping because the seller has a stock of goods that may not necessarily sell as a whole. While dropshipping is practically risk-free because you don't need to spend capital first.

Even though they sell without capital, there are not a few successful dropshippers who have managed to make big profits from promoting other people's products. The key lies in the marketing strategy used to attract consumers to buy the product.

Basically, from the meaning of reseller and dropship, it can be understood that these two sales activities have very different systems. However, both can be profitable if done with a good strategy. So you can start a business as a reseller or dropshipp as needed.

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