Nowadays, there are many ways to do business. From technological developments to changes in consumption patterns, the opportunity to start a business is increasingly wide open to anyone.
Many people are interested in trying their luck in the business world, but are often faced with a big question at the beginning of their journey: is it better to become a reseller or create their own business brand?
Being a reseller means that you sell products that are already on the market at a price set by the manufacturer or distributor. On the other hand, creating your own brand requires more effort but also offers higher profit potential.
Both options have their advantages and disadvantages. Becoming a reseller may be easier to get started with, while creating your own business brand offers the opportunity to build something that is truly your own.
With this in mind, we’re going to give you an unbiased perspective so that you can decide which option best suits your situation and future business vision and mission. Let’s talk about both!
Overview of Reseller and Do-It-Yourself Business
Becoming a reseller is one of the most common and easy to run business models. In this case, you act as an intermediary between the manufacturer or distributor and the end consumer. The products sold are also not your own production, but bought from other parties and then resold at a price that you have determined.
As a reseller, your main focus is to find the right products from reliable suppliers and then sell them to consumers with effective marketing strategies. By becoming a reseller, you can take advantage of the popularity of products that are already known in the market, thus minimizing the risk of uncertain demand.
While creating your own brand is a more complex and challenging step, it also offers great opportunities.
In this business model, you are responsible for developing the product from scratch, giving it a unique brand identity, and building a reputation in the market.
Building your own business brand means creating something truly original and in line with your vision and values. You have full control over the quality, price, and how the brand is positioned in the market.
Pros of Creating Your Own Business Brand
To help you make a decision, you might want to consider the advantages and disadvantages of each reseller option and create your own business brand. The advantages of creating your own brand include:
- More Cost Effective
One of the advantages of creating your own brand is the amount of money you can save.
If you make it yourself, you don’t have to worry about additional costs or prices set by the seller, shipping costs, and so on. That means, the finished product is usually cheaper than buying the finished product from another seller.
Let’s take the fashion industry as an example. According to The Cronut Project, 100 yards of fabric can be turned into four dozen or 48 pieces of clothing. The price of fabric per yard is only IDR 30,000.
Then if you add the sewing fee of approximately Rp25,000, the capital required for each shirt is less than Rp50,000. Very cheap, right? Of course, this figure can change based on the type of fabric, additional accessories, and so on.
On the other hand, there are certain products that are difficult to make and expensive to buy for resale, such as electronic products. Besides being difficult and requiring a robust system, these items will only be cheaper if they are produced in large quantities.
- Self-determined Quality
In terms of space, producing your own goods gives you full control over the quality of your products.
You can realize your mission by producing what kind of goods, for example, standard quality or high quality.
Then in doing quality control, you have the authority to reject products that are not made according to specifications, so that you can ensure that consumers only receive the best quality goods.
- Quickly Adapt to Change
As we know, the market, especially in Indonesia, is changing rapidly. As a businessperson, it is very important to constantly adapt to these changes.
So, if you want to produce your own goods to sell, you have more freedom to choose when to innovate to meet the changing needs of the market.
Disadvantages of Creating Your Own Business Brand
After knowing the advantages above, creating your own business brand also has a number of disadvantages, among others:
- Large Initial Cost
Which is better, being a reseller or creating your own brand? Of course, making your own products requires a large amount of initial capital. The reason is, you have to buy production equipment, raw materials, packaging, and various other needs.
- Need Deep Knowledge
As a business owner who produces your own goods, you need to be well-versed in various sectors, including raw materials, accounting, marketing, distribution, and other business management basics. This means your research needs to be even more in-depth and complex.
- It takes time
Buying finished goods and selling them immediately is obviously faster than producing them yourself. If you need quick cash, this option might not be the right solution. This is because the process of making a product takes a long time, so you need to be patient.
Pros of Being a Reseller
The success of a reseller often depends on the ability to choose the right products and build a network of loyal customers. The advantages of being a reseller include the following:
- Faster
As a reseller, all you have to do is find a supplier of the goods you need and buy them. Since the product is ready, you can sell it directly to your customers, without having to wait for the manufacturing process.
- Capital doesn’t have to be big
Unlike creating your own brand, as a reseller you can save on expensive costs such as capital equipment, production sites, distribution, and so on.
No wonder the average reseller only spends low capital. In fact, it is not impossible with only hundreds of thousands of capital, it will gradually increase sales volume.
- Can Choose Many Products
A reseller can place orders with multiple suppliers at once. That way, you can have a wide selection of products. For example, in an online store you can sell skincare, makeup, books, and bags all at once.
Disadvantages of Being a Reseller
Although it may seem easier and faster, being a reseller also allows you to face various challenges considering that resellers also have a number of disadvantages such as:
- Tougher Competition
When buying products from other vendors or manufacturers, it will certainly reduce the uniqueness of the item. This indicates that there are many competitors out there offering similar things to your product.
So to overcome this, it is important to be creative and find the uniqueness of your business so that people keep choosing your product over others.
- Lower Profit Margin
In general, resellers cannot set margins that are too large. The reason is that if you sell items at a price that is much higher than the purchase price, it is certain that the product will be too expensive.
Whereas if you make it yourself, the production cost per item will be reduced so you can sell at a bigger margin.
- No Control Over Production Quality and Quantity
Being a reseller, you have little control over the quality and quantity of goods you source from vendors or suppliers.
If you don’t choose the right supplier, you could incur losses due to receiving substandard products or products that are not appealing to your target market. Therefore, choose your suppliers carefully!
So, is it better to create your own brand or become a reseller?
There’s no denying that both options are profitable. However, the benefits of both may differ. Many factors influence this, including product selection, industry choice, market conditions, marketing strategies, and so on.
Now that you know the advantages and disadvantages of both options, you can choose the best option that suits your situation. For example, if you don’t have the resources to produce your own brand, you can start by becoming a reseller first.
Then when your business savings are sufficient, you can start trading under your own brand. The most important thing is to have a thorough understanding of the product and a strategy to select and customize it for your target market.
In conclusion, become a reseller or create your own brand, the answer is of course in the hands of each, by considering the advantages and disadvantages described above, good luck!
However, whatever the business system is, make sure you know and pay attention to the legality of the business.
If you choose to create your own brand, make sure to take care of business legality such as NIB, company establishment deed, NPWP, trademark registration, and other business licenses for business credibility and productivity. This will reduce the risk of legal issues in the future.
Likewise, by becoming a reseller, you need to make a cooperation agreement to be strong evidence and basis in doing things that have been agreed between the manufacturer or distributor and the reseller.
In addition, the existence of a cooperation agreement can also prevent problems in the future because each can know their rights and obligations, and support the smooth implementation of business.
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