Difference between Dropshipper and Reseller in Online Business

The terms dropshipper and reseller are currently increasingly widespread and are often heard along with the development of online businesses. These two jobs are now often used as an alternative as a side job.

However, many people are confused when faced with these two choices. There are still many who think that the two are the same, but they are not. Both are indeed reselling other people’s products, but there are some differences between a dropshipper and a reseller in an online business .

Simply put, a dropshipper does not need to keep a lot of stock of goods and can even not stock goods at all, because when the seller gets an order, the seller immediately forwards the order and delivery details to the producers, distributors, or suppliers who have collaborated with him.

Meanwhile, resellers are those who resell products or services from distributors, manufacturers, or suppliers who have collaborated with these business actors. In contrast to dropshipping, here a reseller has stock of goods that he wants to resell.

The following are the differences between dropshippers and other resellers that you need to know.

Resellers Have Stock Items, Dropshippers Don’t

As explained earlier, the difference between a reseller and a dropshipper can be seen from the way they work. It can be said, resellers are similar to traders in general. They have to buy goods in advance from suppliers or distributors for stock. After getting a certain amount of goods, new resellers sell them to consumers.

As with dropshippers, the way dropshippers work is to offer goods to consumers first. Dropshipper does not need to stock goods. If you get an order, it will be forwarded to the supplier or distributor. Later the supplier or distributor who receives this order will send the goods to the consumer.

Resellers Need Bigger Capital Than Dropshippers

The difference between a dropshipper and a reseller also lies in the capital used. One must have sufficient capital to buy and stock goods. While a dropshipper only has credit or internet quota, you could say a dropshipper doesn’t need any capital at all.

Because the capital to become a dropshipper is relatively small, business capital can be obtained from pawning valuable items at Pegadaian. Valuables that can be pawned include gold, jewelry, and electronic goods. With a pawn, we can get capital and pay it off at any time or make as much installments as we can when we return the capital. But, don’t forget to extend the pawn so that valuables are not auctioned.

Resellers Can Market Products Directly

A reseller usually offers goods directly to consumers because the reseller has stock of the goods they want to sell. While dropshippers are not like that. Because dropshippers don’t have stock, a dropshipper can promote their products through social media, websites, group chats, and so on.

In this case, resellers will be superior to dropshippers because they have the goods directly that can be shown to consumers. In addition, they can also provide much more detailed information regarding the product. This can also affect communication and the sense of trust that is built to consumers.

More Reseller Online Business Advantages

In terms of profit, a reseller has a bigger advantage compared to a dropshipper . This is because they obtain competitive prices by purchasing large quantities from suppliers. With this, resellers can more freely sell their goods at a higher price difference. So that the profit margin obtained is even greater.

Meanwhile, dropshipper profits are much less or standard because they cannot manage sales margins.

The risk of becoming a reseller is also greater

The difference between a dropshipper and a reseller can be seen from the risks they face. A reseller has a higher level of risk of loss than a dropshipper because they keep goods in stock. If the goods are not sold, the reseller will suffer a loss.

While the dropshipper will not suffer a loss because it does not bear the risk of unsold goods.

From the differences above, it can be concluded that the advantages of being a reseller lie in the advantages, while dropshippers can avoid many losses because they are not the main producers, distributors or suppliers .

For those of you who are still confused about whether you want to become a reseller or dropshipper , make sure you know your goals in starting a business. If you just want to earn extra income or as a freelancer , then dropshipping can be an option. However, if you really want to build a business, then you can start by becoming a reseller . Have you ever imagined being a dropshipper or reseller?