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How to Become an Authorized Electronics Reseller

Do you want to start a profitable business reselling electronics? If YES, here are 7 steps on how to become an authorized electronics reseller and make money.

Generally, a reseller business is a great option for first time entrepreneurs. This business allows you to resell products bought from manufacturers to consumers. The reseller dropship Business model is affordable, making it a great option for new entrepreneurs.

In this business, you work as the middleman between the manufacturer and consumers. You’re not burdened with making the products, but you’ll still have an extensive selection of products to choose from. Whether you want to resell clothes or electronics, you’ll quickly learn that you can sell anything.

Your reseller online shop can expand into other niches without expensive inventory fees, additional costs or high shipping costs.

Indeed there are many reasons to become a reseller. From easily sourcing from a diverse product selection to lower business costs, you’ll find that starting your own reseller business has never been easier. Below are few reasons why you should become a reseller.

Why Become an Authorized Electronics Reseller?

a. Vast Number of Reseller Products

As a reseller, you’ll be able to sell a diverse range of products. If you resell televisions, as your business grows you can resell mobile phones, laptops, sound systems, home gadgets and other related products. Adding other products to your reseller shop won’t cost more money as you only pay for goods as customers buy from your store.

b. Start Your Business Sooner

Another reason you should consider this business is because it allows you to start selling the same day you start your reseller business. After you’ve added a few great products and some content to your store, you can start marketing your business.

Note that you can start your reseller business online in as little as thirty minutes. You won’t have to wait for inventory to arrive or wait for anything at all for that matter. You can setup and launch the same day.

c. No need to carry Inventory

One amazing fact about the reseller business is that you don’t have to carry inventory. You can use reseller dropship apps like Amazon which allows you to resell goods without having to buy bulk inventory in advance. In this business you only pay for goods as customers order them from your website, making it a great choice for new entrepreneurs. Even if you sell niche products, you can still make a profit without holding stock.

d. You can expand easily

If you decide to become a reseller, you won’t be limited by your product category. When entrepreneurs wholesale products, it can be expensive to buy bulk inventory, pay shipping fees and have enough product selection. But this business provides you with the opportunity to test other niches without having to buy additional inventory. You can grow your reseller product selection with the click of a button.

e. Lower Commitment and financial risk

Individuals who become resellers tend to have fun and enjoy not having to spend all of their time on it. Most of the processes are automated, allowing you to manage your business easily.

You also save time since you won’t need to package or ship products to your customers. Another advantage of starting a reseller business is that the financial cost is low. This is the perfect business for the budget-conscious, new entrepreneurs or the risk-averse.

You won’t need to buy bulk inventory. Shipping fees aren’t sky high in a reseller business. You only pay for goods as customers order them through your reseller online shop. Thus, the financial cost for setup is low.

f. You can set your own margins

Have it in mind that as a reseller, you’re free to set your own margins. You can choose to price your products anyway you want. Since the cost of goods is low, you can price your products to ensure your reseller business is profitable. The higher you set your price the more you can make. Be sure to look at industry standards for product pricing.

How to Set Up an Authorized Electronics Reseller Business

Reseller of electronics Products are the link between distributors/manufacturers and the end customer. These businesses buy products from distributors/ manufacturers at a lower price and then sell them at a higher rate, thereby earning a profit margin on each product sold.

As a reseller, you become the main point of customer contact for pre and post-sales support. Below is a step to step approach of setting up an authorized electronics reseller business;

1. Take care of the legal aspect

First and foremost, you have to choose a suitable business structure that suits your visions and purpose for the business.

If you are the only person who is operating the business, choose sole proprietorship, which is the quickest business structure to adopt. In this case, the profits that you draw from the company will be considered as your personal income for tax purposes.

Some entrepreneurs consider limited liability company  (LLC) as an option to start business. This is because LLC offers protection of owner’s personal assets from a company’s debt. Corporation is another business structure that you may consider when multiple owners are operating a business.

It is a more complex business structure that can be expensive to setup and requires a lot of paperwork. Also, to become a licensed reseller of electronics products, it is important to register your business with the state business licensing office as a DBA (Doing Business As).

The business licensing requirements will vary from state to state in united states. Contact your state licensing authorities to know the licensing requirements of your business. Reseller of electronics Products are expected to obtain business certificate without which they cannot contact the distributor/manufacturer.

You also don’t want to pay sales tax out of your own pocket for items that you will resell to your customers. A reseller’s permit also referred to as reseller’s license, sales tax ID, sales tax permit or resale certificate enables you to purchase products from your distributor/manufacturer without paying any sales tax.

In other words, sales tax will not be applicable to buy products for resale. Contact your state tax department for a reseller’s permit. Access their website and fill the appropriate form to get a sales tax license. Collecting sales tax without a sales tax license is considered to be an unlawful activity.

2. Create your Website

In this line of business, selling products online is the best way to promote your business and reach a wide customer base. No matter the size of your business, it has become very necessary to have your own website in today’s digital age.

Your website acts as an effective sales and marketing tool. Also note that a lot of distributors may reject your reseller application if you don’t have your own website. So make sure to setup your own website based on your business objectives and needs. You can advertise and promote your business using blogs, social media etc.

3. Identify Manufacturers and distributors

Have it in mind that running a Reseller of electronics business means it is very important to find manufacturers you want to work with. You would want to represent manufacturers that produce high quality innovative products and offer you growth potential.

In many instances, you cannot purchase products directly from the manufacturer. Most manufacturers make all their sales through distributors.

So, take your time to find out the list of wholesale distributors through which the manufacturer is selling products. After you must have consulted with the manufacturer, contact the right distributors and apply for a reseller account. In most cases, you will have to fill an online reseller application form which will be reviewed within 3-4 business days.

You will have to give basic information about your business including EIN and address. Note that the requirements to become a reseller will vary from one distributor to another.

In some cases, you will get a reseller account only when the distributor is assured of receiving a minimum specified amount of orders from you every year. These distributors might even go through your history of sales to check whether you can meet the minimum order criteria.

Some also require insights about your marketing activity as well. Unless you have a strong plan to increase sales, the distributor is unlikely to accept your application.

Usually, reputed distributors, commonly referred to as tier 1 distributors deal with established resellers only. So if you are a brand new reseller, you may have to do business with tier 2 distributors who are often limited in their geographic coverage.

4. Terms and Conditions

It’s very important that ensure that you fully understand every clause of the contract before you sign. Take your time to carefully read and understand the terms and conditions of sale. You can even discuss with other resellers or hire a lawyer to get better insights of contract terms.

Be aware of your responsibilities and follow them to the T in order to develop a sustainable relationship with the distributors.

Always make sure you understand what arrangement has been made to order products as well as the price and payment terms. The contract should also specify the currency of payment. Also, find out whether you have to carry the inventory or the distributor has made any arrangement to dropship the products directly to the customer.

Note that choosing a dropship distributor is a better option as drop shipping eliminates the responsibility of keeping inventory.

  • Conclusion

Starting an electronic reseller business is an option you need to consider as it comes with a lot of benefits. When considering to become a reseller of electronics products, try to evaluate what additional value added services you can offer to your customers so as to increase your profits. Reseller business is typically a low margin business, hence offering value added services can help to increase revenue.