Pros and Cons of Using Third-Party Sellers for Products

Using third-party sellers for products such as perfume and others can come with many pros and cons. Learn more about them here.

We live in a world where 45% of new businesses fail within 5 years. The result? Every business owner, no matter their niche, is on a constant hunt for ways to increase the chance of success!

If you’re in retail and know the struggle, then working with third-party sellers could be worth considering. Want to learn all about the pros and cons involved? Keep reading.

Pros of Using Third-Party Sellers for Products

• New Audiences and Channels

Working with a third-party seller gives you access to their hard-earned audience.

Imagine being a traditional retailer in a brick-and-mortar store, for example.

Partnering with a third-party e-commerce seller would be a simple way for them to expand online without having to figure out the digital world for themselves. They’d also be able to leverage everything from the seller’s email list to their social media following, delivering a swift and sizable uptick in brand awareness.

• Expertise

Third-party sellers are more than just another sales channel, though. The best ones bring real business acumen and sales experience to the table.

Sure, they’ll sell your products (more on this coming up). Yet, thanks to an in-depth understanding of things like paid advertising and SEO, they can also function as something akin to brand management partners. Better still, you reap the rewards of their expertise without having to invest any of your own time or energy!

• Revenue

The ultimate advantage of using third-party retailers comes down to one thing: cash.

Sure, you’ll be selling your product at wholesale rates, which means lower profit margins. On the other hand, you get a large order from a seller in whose interest it is to sell as many products as they can in the shortest possible time.

Cons of Using Third-Party Sellers for Products

• Loss of Control

The largest concern for most businesses considering third-party sellers is the relinquishment of control over their brand image.

In theory, at least, the reality of third-party logistics means retailers could represent your company in a manner that’s at odds with the brand you’ve worked hard to cultivate. They could sell your products at discounted rates, for instance, or run ad campaigns with dubious aesthetics or messaging. Read more about the differences between selling direct and through a third party to avoid those kinds of outcomes and ensure you understand the risks.

• Cherry Picking

All businesses have products in their catalog that are more popular than others. In an ideal world, then, a third-party seller would take on lower-performing SKUs to give them newfound exposure and boost sales. Oh, we don’t reside in an excellent world!

The likelier outcome is that retailers cherry-pick from your catalog. Because it’s in their financial interest to do so, they usually only purchase the best-sellers.

Remember the Pros and Cons of Using Third-Party Sellers

External retailers can play an invaluable role for any business trying to boost sales and growth over time. However, as we’ve seen, there are potential downsides worth considering too!

We hope this article has helped in that regard and shed light on whether or not third-party sellers are right for your operation. Are you starving for more learning on related topics? Browse the “Business” part of the website now.