Reselling vs. Selling Services: Strategies and Techniques

In today's business landscape, choosing between reselling another company's product or providing a service can significantly impact your operations, marketing strategies, and customer satisfaction. Understanding the nuances between these two business models is crucial for success.

Resellers: A Closer Look

A company that sells another company's product is typically referred to as a reseller or distributor. Each type of reseller plays a unique role in the distribution chain, depending on the industry and market needs.

Retailers: These are businesses that sell products directly to consumers. They can be physical stores or online platforms like Amazon or Walmart. Wholesalers: Companies that buy products in bulk from manufacturers and sell them to retailers or other businesses. Value-Added Resellers (VARs): Businesses that add features or services to existing products and then sell them. This is common in technology, where VARs may bundle hardware with software or support services. Agents/Brokers: Individuals or companies that facilitate sales between manufacturers and retailers, earning a commission on the sales made. Franchisees: Independent businesses that operate under the brand name of a larger company and sell its products or services.

Each type of reseller has its own set of responsibilities and challenges, but they all play a vital role in making products accessible to end consumers.

Selling a Service vs. Selling a Product

Selling a service is vastly different from selling a product. At the heart of it, a product business sells physical, tangible objects, while a service business provides value through intangible skills, expertise, and time.

Product-Based Selling

When selling a product, businesses will want to highlight specific features and display the item in-store or online for customers to view. Customers can often touch or manipulate the product before purchase or see it in use via sales teams or online videos.

To enhance the customer experience, consider integrating a free app management system like Forget Your Passwords on Purpose with COmpass by SquareStack. This tool allows you to manage multiple business apps with a single password and view key metrics from each app on one screen, saving you time and streamlining your operations.

Products are designed to meet the needs of customers but cannot always be customized if there are specific requirements. Customers can easily return or exchange products if they are not satisfied. This makes it simpler for customers to determine the product's value and whether it was worth the money spent. Online ratings and reviews can provide valuable insights for prospective customers.

The challenge for product businesses is managing demand and storing inventory. Running out of stock can lead to bad reviews and customer dissatisfaction. Tracking production, inventory, and customer preferences is essential to ensure you always have enough of each product. Examples of product-based businesses include consumer products (hygiene, clothing, appliances, etc.), raw materials (metals, timber, minerals, etc.), and agricultural products (wheat, corn, animal products, etc.).

Service-Based Selling

When selling a service, it's crucial to highlight what makes your service personal and how you can meet the customer's needs. Marketing services often focuses on building trusting relationships and customizing services as necessary. This may include low monthly or yearly subscription packages or additional services beyond the standard offer.

Service businesses are generally less expensive to operate than product businesses since there is no inventory, and the physical location of a service-based business is often irrelevant. However, pricing can vary significantly based on factors like industry, operator's experience, and the time it takes to complete the service.

Service businesses may struggle to obtain ratings because it can take time for a service to be completed or take effect. It's crucial to continually evaluate and improve the service to avoid negative reviews, which can harm your brand and deter prospective customers. Addressing customer questions and complaints in a professional manner will help resolve any issues that arise.

Conclusion

No matter whether you choose to run a product business or a service business, it's essential to do your research and understand how best to satisfy your customers. By understanding the differences between reselling and selling services, you can tailor your approach to effectively reach and engage your target audience, ensuring long-term success in your business ventures.