What does resale mean?
Directly translated from English, “re-sale” means “reselling” – a model that has existed in online and offline retail for many years. Resellers buy merchandise and offer it for sale in their own store or on marketplaces in the B2B or B2C sector. There are essentially three scenarios:
- Reseller buys from the manufacturer and sells as a wholesaler to the retail trade (B2B)
- Reseller buys from the manufacturer and sells in retail (B2C)
- Reseller buys from wholesalers and sells to retailers (B2C)
The reseller adds a mark-up to their own purchase price and thus arrives at their selling price. In addition to transportation and logistics costs, the mark-up usually includes taxes, packaging and other fixed and variable fees that are incurred for the resale. Everything above this contribution margin then results in the (gross) profit that remains for the seller through the reselling of merchandise.
Although a reseller is basically free to decide on pricing, it operates within a somewhat narrower framework than a direct seller (manufacturer) or private label retailer. A reseller is not necessarily bound by a manufacturer’s recommended retail price (RRP), but in practice, agreements are often made for lower price limits. If a reseller sells the goods directly from the manufacturer itself, there is no RRP and no defined price range.
Resale or reselling – what’s the difference?
Both terms basically mean the same thing – one (resale) is the noun and the other (reselling) can also be interpreted as a verb. Translated directly from English:
- Resell = to sell again
- Resale = the selling again of something purchased
Resale on Amazon
There are also numerous resales on the Amazon marketplace: Many thousands of online retailers purchase their goods either directly from manufacturers or wholesalers and offer these products on Amazon at a markup. The basis for listing and selling merchandise on Amazon is the EAN or GTIN. If this already exists in the Amazon product catalog, all data stored there, such as title, bullet points, images and description, are automatically loaded when the offer is created. If the EAN has not yet been created in the Amazon catalog, you as the seller have the option of entering this data yourself.
Problems with resale items usually arise with the completeness and correctness of the product data, as not every reseller has the write permission for the listing. For example, if three resellers sell the same product, it can happen that the image of reseller 1, the title of reseller 2 and the description of reseller 3 are visible to customers on the product detail page.
Reselling on Amazon is controversial in various categories, as there is a strong price war on this marketplace in particular and the margins have often become too small for some retailers.In general, the use of a repricer is recommended, which automatically adjusts the price up and down under set conditions. Automatic price adjustment is particularly important when reselling in order to win the BuyBox on Amazon, but also to increase sales.
Another aspect of reselling products on Amazon are PPC campaigns, because especially with Sponsored Products, the campaigns are only played out if you as a seller are also listed in the BuyBox – which in turn has a major impact on the item’s sales opportunities.