Is Your Business a Reseller?
Being a middleman is “risky business”!
Many years ago, everyone had brick and mortar stores or offices. Many of them were resellers – insurance, records, travel agencies, clothing shops, hardware stores, etc. Then the internet happened, and people could buy direct from the source.
In light of recent events, being a middleman (or middlewoman) is riskier than ever.
If you are only moving someone else’s product, it used to be people would pay for your local location. That’s usually not the case anymore. In addition, you being the middleman cuts down on the net profit compared to direct competitors who have done away with the middleman. Lastly, you are totally reliant on your suppliers.
What can you do to minimize the risk to your business?
1. Add value. For example, Henry Schein, Inc. is the world's largest provider of health care products and services to medical, dental, and veterinary practices. All they do is resell products. However, they act as curators and gatekeepers. They sift through all the products to make sure they only recommend the best ones to their customers. They also offer informational resources for their customers practices. How can you package your product(s) so they will be a greater value than just the thing you purchase?
2. Diversify your suppliers. If you are overly reliant on one supplier or source, a single event, such as a supplier going out of business, could put you out of business. The recent tariff situation in the United States means it’s a good idea to have sources in multiple countries as well as with multiple companies.
3. Create an experience. If you have a brick-and-mortar store, give your customers a reason to physically come in to your store that they wouldn’t get from buying your product online. For example, give away free samples, fun events, how-to classes, or create a special ambiance in your store. If you don’t have a physical store, you could still have online events, including using social media.
Distinguishing your product from your competitors will allow you to compete on more than just price, which will allow you to have higher profit margins and also reduce the risk in your business.
If you would like to see how your business compares to others in your industry, please contact our office for a free, no-obligation, assessment.