Before starting any business, we like to search in YouTube and see as many as video to gather all the information related to the business model. And the confusing part is that there can be seen a lot of available options to start a new business, such as Drop shipping, Ecommerce, Reselling, Digital Marketplace, Small Offline Business and so on. Then we start to research each business model with all possible pros and cons as a prerequisite step of your startup.
Most beginners prefer online business to start with zero investment or low budget. One of the most hotline topic is ‘Ecommerce Business vs Reselling Business’. Among many other online business models, Ecommerce and Reselling Businesses are highly demanding now a days. Here we are going to discuss about the comparison between Ecommerce Business on Amazon, Flipkart, Meesho, eBay, AliExpress etc and Reselling Business on WhatsApp, Facebook and Instagram with proper analysis.
Another important bemuse thing is to start your first business with low budget. By going through each detail, we have to decide the right business model that suits your interest as well as market trends. So, let’s start the analysis.
IN THIS ARTICLE
1. What are Ecommerce Business and Reselling Business?
An Ecommerce Business means buying and selling of goods or services online, exclusively through a digital platform. You can operate it via a website or online platform and it offers customers to browse products, make purchases, and complete transactions digitally. Ecommerce Business needs diverse online marketing strategies, secure payment gateways, and efficient shipping logistics to reach customers in large scale.
A Reselling Business involves buying images, videos and banners from manufacturers or wholesalers and selling them for a profit. Resellers act as intermediaries between suppliers and consumers. Staying informed about market trends is essential for competitiveness. It denotes such a business idea in which you need to get selling services from suppliers and do marketing with the help of online social media platforms like WhatsApp, Facebook, Instagram etc.
2. Target Audience Comparison
Ecommerce Business can be run globally with the help of website. If you start a business by registering on any Ecommerce site, your products will reach to a broader targeted audience because an existing Ecommerce site will have already its own pre-registered buyers. As a seller you don’t need to waste your time for marketing your products in different platforms.
On the other hand, if you start a Reselling Business, you have to share your products through Social Media platforms for marketing. In this business model, you are supposed to build your own contacts, communities and leads so that your products will reach to your targeted audience. Thus, in this case the marketing needs time to get better results. You can consider it as a profitable business model for long term goal.
3. Startup Cost Comparison
For starting an Ecommerce Business, you need to invest money in purchasing wholesale products or manufacturing. The investment ranges from medium to high. But Reselling Business can be start with minimum investment as it doesn’t require any physical products with manufacturers. Instead of it, you need to manage deals with the manufacturer by purchasing marketing authority only.
So, Reselling Business may be a better option of the beginners over Ecommerce Business. Even sometimes you call sell products with zero investment in Reselling Business model.
4. Brand Building Comparison
There are many options available for brand building in Ecommerce Marketplaces. You can create your own store in most of the Ecommerce platforms. In many Ecommerce sites, you can also build your own brand pages.
Reselling Business don’t have the option for building brand by the resellers. Instead, the manufacturers are spreading their brand value with the help of resellers. So, brand building is not possible through Reselling Business.
5. Logistics and Delivery Comparison
In Ecommerce Business, the logistics and delivery process are very simple. As a seller you don’t need to do anything. The marketplace executives are there to manage your orders and are responsible for the entire delivery process. Your responsibility is to just pack the products and hand over it to the courier service.
Whereas in Reselling Business, you need to call the customers to verify the buyer’s identity, addresses etc. and even sometimes you have to arrange return deals by yourself. The process of customer verification is a headache in Reselling Business.
6. Competition
The competition in Ecommerce Business is very high. But the plus point is that you can reach a huge number of buyers in Ecommerce sites as well, which can benefit the sellers. This is for the reason that many sellers are offering same type of products in Ecommerce sites.
Whereas, it is super easy to start a Reselling Business and competition is less as compared to Ecommerce Business. Only you need to acquire the unique and creative marketing strategy to promote your products.
7. Profit Margin Comparison
The commissions, fees on Ecommerce Marketplace are higher as compared to Reselling. But the number of orders in Ecommerce Business is always higher than Reselling Business. So, the profit margin depends on other strategies of your business model as well. In overall, we analyse that the greater is the number of selling quantity, the greater is the profit margin by outnumbering the commission and charges.
8. Payment and Transaction Comparison
In Ecommerce Business, the marketplace itself collects the payments from customers on behalf of you and they will provide your money in your account after deducting fees and commissions as per the standard policies. Whereas, in Reselling Business you have to build trust to get prepaid order. In general, you will get postpaid orders in Reselling Business and sometimes you may face unwanted issues from buyers during payment.
So, Ecommerce Business is better than Reselling Business in most of the times.
9. Quick Result
Satisfying result can be gain in Ecommerce Business by providing quality products to your buyers. In this model, you don’t need to talk about the quality of your product by paid promotion or else. Here, customers will give good or bad reviews for your product, on the basis of which people like to purchase products from you. If the reviews certified you as a trustable seller, then your business will grow in quick time.
In Reselling Business, you have to wait a longer time as compared to Ecommerce Business to gain trust from people. Without promotions reselling business will not give you quick result.
Both Ecommerce and Reselling Business have their own pros and cons. As a conclusion, we recommend you to start an Ecommerce Business if you want to run a long-term business model. But if you want to earn passive income and a side hustle business then you should go for Reselling Business.
FAQs
1. How can I start an Ecommerce Business?
Starting an Ecommerce Business needs to follow crucial steps. Here are the simple steps you may consider to start:
- First, conduct market research to understand your niche and competitors.
- Develop a detailed business plan outlining goals, products, and marketing strategies.
- Choose reliable Ecommerce platforms like Shopify, Amazon etc.
- Source products, manage inventory, and ensure legal compliance.
- Execute a comprehensive marketing strategy, including SEO and social media.
- Prioritize excellent customer service.
- Launch your store, gather feedback, and work for continuous improvement.
Remember, dedication and flexibility are the key pillars to success in Ecommerce Business.
2. What is a good profit for reselling?
A favorable profit margin for reselling generally falls between 20% to 40%, contingent on factors such as product type, market demand, and competitive landscape. It’s essential to factor in overhead costs, marketing expenditures, and the perceived value of your offerings. Strive for a profit margin that not only covers expenses but also keeps you competitive in the market.
3. Which business is best for beginners to start from zero?
Both Ecommerce Business and Reselling Business can be launched from scratch with minimum investment, yet they entail different approaches:
Ecommerce: Establish your brand or online store to directly sell products to customers. This involves setting up a website, sourcing products, managing inventory, and overseeing marketing and customer service. While it demands more upfront work and investment, it offers greater control over your brand and product selection.
Reselling: Purchase products at a lower price and sell them for profit, often through platforms like eBay or Amazon. Resellers don’t create their own products or brand but need to find reliable suppliers, manage listings, and handle customer inquiries. Reselling generally requires less initial investment but may yield lower profit margins and less control over product quality.
Ultimately, the choice of starting a new business depends on your preferences, skills, and resources. If you are keen on brand building and ready to invest more time and effort upfront, Ecommerce may suit you better. Conversely, if you prefer a simpler approach with lower risk and investment, reselling could be a suitable option for you.
