An internet reseller program works much the same as a physical brick and mortar retailer or reseller program. You buy products, usually from a distributor or manufacturer, at one price (typically wholesale price) and resell the product and a higher price (retail price).
In the physical marketing world, there is a plethora of examples surrounding the reselling of product. The field that it is most apparent in is the retail stores that sell products of many different companies. A supermarket, for example, purchases products from various manufacturers for a fraction of the actual price, while setting custom retail prices and profit margins from any product. By doing this, the supermarket becomes a mediator between the manufacturer and the customer, while making money for it. The manufacturer benefits, as he saves the need to deal with customers and operate a sales force. The customer saves the trouble of seeking out the manufacturer, while gaining availability and comfort. The advantage that the reseller gains is apparent – cash flow AND (hopefully) profit.
Think about your favorite breakfast cereal that is sold in your neighborhood supermarket – the store is not the manufacturer, clearly, and not even the importer. We can safely assume that you would not want to travel to the manufacturer warehouse to purchase the cereal, or to the farmer that grows the ingredients, and go through the processes of making your own cereal. It's much easier to peruse the cereal aisle at your local grocery store, pick up a box, and pay for it at the checkout. Thus, the supermarket is a reseller in a reseller program that is maintained by the manufacturer/s.
In many cases, the reseller programs have rooted themselves so deep, that the manufacturer no longer sells to customers – just try to purchase a Special K set directly from Kellogg’s and you will see what I mean.
Internet Reseller Program
The reseller program model plays well on the internet, with all the benefits intact. In the digital world, reselling takes less effort, as in most cases, no stock management is required – and selling online saves the cost of manpower and marketing fees AND buying or building a physical store.
If the product itself is digital - a program, a license or a service – additional costs are reduced as you can provide the product digitally and save the shipping and distribution costs.
Utility-wise, the online reseller programs are often conducted using one of the common tools the web offers – shopping carts and virtual stores. When a client places an online order, he rarely stops to think whether the products they buy are sold by the programmer or someone on his behalf. if the product and service is good, it doesn't matter. In addition, a reseller may provide terms and perks that the manufacturer can't or doesn't offer, I.E. lower price, extended service plans, peripheral products and more – to win the competition over the customer's interest.
The tools that are provided online allow you to engage in reselling simply and easily – often, the only action required is the opening of an account – so no intricate logistics are required. Additionally, current-day technology offers a great deal of flexibility, allowing the reseller to launch his own brand and offer products he did not make under his banner, logo and trade mark. It is a huge advantage when fighting for consumer attention, as every bit of additional customer interest might tip the scale in your favor, rather than the competition.