Starting an eCommerce business often feels like standing at a crossroads. You can either carve out a niche by creating a unique brand from scratch, or resell existing products, leveraging tried-and-tested items ready for market. The choice you make will alter your business’s trajectory.

To help you decide which path to take, we’ll discuss the critical differences between reselling and brand building. Whether you’re looking for quick wins or long-term growth, we’ll help you determine the right approach for your business.

Reselling 101

Reselling is a business model where you purchase products from manufacturers, wholesalers, or other retailers and sell them to your customers for a profit. Rather than create your own offerings, you instead find products already in demand and push them to your market (often at a higher price to make a profit).

This is a popular avenue for eCommerce newcomers because it’s accessible; it lets you tap into established products so you don’t have to develop your own from scratch.

Product sourcing strategies for reselling

When it comes to reselling, how you source your products is key to your success. Here are three common strategies:

1. Retail arbitrage: You buy discounted or clearance items from physical or online stores and then resell them at a higher price. The idea is to find deals, typically through major retailers, and flip those goods to turn a profit. However, retail arbitrage can be labor intensive since you must constantly hunt for deals. Limited quantities of discounted items may also make it challenging to scale.
2. Wholesale reselling: You buy products in bulk from a manufacturer at a discounted rate and sell them individually for a profit. Many vendors take this approach on platforms like Amazon. Since you have reliable inventory, it’s easier to scale your business through wholesale reselling. But be aware, it requires a larger initial investment due to inventory management and storage.
3. Dropshipping: You partner with a supplier who handles inventory and shipping for you. When a customer places an order, you forward it to the supplier, who then ships the product directly to the buyer. This strategy often has low up-front costs but limited control of product quality and shipping times.

The pros and cons of reselling

Reselling offers a quick and relatively low-cost way to break into the eCommerce industry, although it has some downsides that can limit your growth and profitability.

Pros

• Lower startup costs: You don’t need a large, up-front investment to start. With reselling, you avoid paying for product development or manufacturing, so your wallet takes less of a hit.
• No product development: Related to the previous point, since you sell products that already exist, you don’t have to create or test new products. You essentially skip the hardest (and most expensive) part of building a brand.
• Faster time to market: Reselling allows you to hit the ground running. You can start selling almost immediately after sourcing your products, which translates to quicker revenue potential.
• Established demand for products: Because you’re selling products already in demand, there’s less risk compared to trying to convince customers to buy something completely new or unfamiliar.

Cons

• Dependency on suppliers: Since you rely on suppliers for inventory, any delays or issues on their end can disrupt your business. You also have almost no control over product availability and quality, which can hurt your reputation if delays or defects occur.
• Limited branding control: Because you’re selling someone else’s products, you have little say in how they’re presented or marketed. That makes it harder to build a distinct brand image that stands out.
• Competition: The barrier to entry for reselling is low, so you’ll be competing with many other sellers offering the same or similar products. This can drive down prices and squeeze your profit margins.
• Market fluctuations: Trends and demand can change quickly, and you’re at the mercy of those shifts. If the product you offer suddenly loses its popularity, you could be left with unsellable inventory or forced to sell it at a lower price.

Brand building 101

Brand building is the process of creating a unique identity for your business in the market. Having a product to sell isn’t enough; you must connect with your audience through a memorable name, logo, and message that sets your business apart from the competition.

To craft a strong brand, several key elements must come together.

1. Brand identity

This includes all visual and textual elements that represent your brand, like your:

• Name
• Logo
• Colors
• Tagline

A strong brand identity helps customers recognize and remember your business. Whether it’s a catchy phrase or a unique symbol, these elements should reflect what your company stands for.

2. Marketing strategy

Your marketing strategy defines how you communicate your brand’s message to your target audience. It encompasses:

• Social media campaigns
• Email marketing initiatives
• Influencer partnerships
• Content creation

A consistent, well-executed strategy helps reinforce your brand identity and ensures your message reaches the right people.

3. Unique value proposition

Your unique value proposition (UVP) sets your brand apart from competitors. It could be a distinct product feature, stellar customer service, or perhaps an unmatched commitment to sustainability. This is crucial to your brand story and must clearly explain why customers should choose you over your competition.

4. Product sourcing strategies for brand building

After establishing your brand identity and marketing strategy, the next step is to source products that align with your brand’s values and image. Common sourcing strategies for brand building are:

• Private labeling: Private labeling allows you to put your brand’s name and logo on items made by a manufacturer. This is an excellent way to create a branded product line without the high costs of designing and producing from scratch.
• Sourcing from manufacturers: For a more customized approach, you can work directly with manufacturers to develop unique products tailored to your brand’s specifications. This requires more time and investment but gives you complete control of product design.

The pros and cons of brand building

Although brand building takes more effort up front, it comes with some major advantages that can set you up for long-term success. Below, we’ve outlined the pros and cons of building your own brand to help you decide if it’s the right path for your business.

Pros

• Control over packaging and branding: With brand building, you have full authority over how your product looks and feels. This means you can tailor all aspects to reflect your brand’s values, appeal to your target audience, and stand out wherever you sell.
• Potential for growth and scalability: Once you’ve established a strong brand identity, you can expand your product line, reach new markets, and scale your business. Further, since you control the product, you’re not limited by supplier availability or market trends.
• Customer loyalty: People are more likely to stick around when they connect with your brand’s story and values. That loyalty can then drive repeat sales and inspire customers to spread the word about your business.

Cons

• Higher up-front investment and risk: Brand building usually requires a larger initial investment since you spend on product development, branding, packaging, and marketing. There’s also a greater risk since you’re creating something new on the market.
• Longer time to market: Building a brand takes time (unlike reselling, where you can start to sell almost immediately). You have to devote attention to product development and creating marketing materials prior to launch, both of which are longer tasks.
• Marketing expertise required: To succeed, you need ample marketing knowledge to communicate your unique selling points, engage your target audience, and position your offering in the market.
• Competition from established brands: Breaking into a market with established competitors can be tough. To carve out your own space, you’ll need to differentiate your product and offer something that existing brands lack.

Reselling or brand building?

You should now be ready to decide which selling method to choose for your eCommerce venture. Here’s a side-by-side comparison of reselling and brand building based on the various considerations we’ve covered:

Considerations	Reselling	Brand building
Business goals	Profit from selling established products	Create a recognizable and trusted brand
Control and flexibility	Limited control over product quality	Full control over product quality, design, and branding
Time to market	List existing products and start selling right away	Requires time for product development, branding, and building recognition
Logistics	Sole focus on sourcing and inventory management	Entails full supervision from production to fulfillment
Market saturation/demand	Highly competitive since many sellers offer the same product	Needs strong branding to stand out among competitors
Customer loyalty	Gaining buyer loyalty can be difficult since customers may switch to other resellers	Able to cultivate repeat customers through brand identity and values
Brand recognition	May be seen as a generic seller	Has potential for widespread brand recognition through a distinct identity and loyal customer base

Wrapping up — Your selling method shapes your business’s destiny

Reselling and brand building point to two different paths: The former offers a quick way to enter the market, but you’ll need to contend with significant competition and find a way to stand out. The latter, meanwhile, is a longer journey that requires more effort but has the potential for lasting customer loyalty. The right choice depends on your business goals, so take your time and evaluate your options carefully.

If you need more assistance with navigating the world of eCommerce and growing your business, check out our blogs. We have the resources to help you take that next step with confidence.