Are you confused between starting out as an Affiliate or as a Reseller. You want to know which makes more money and which is the easy way to go on, then this research will help you out definitely. Before digging more into the differences between affiliates and resellers, let us understand the basics of two:
Affiliates are the entities (individual or company) that promotes the product of some other company mostly on their own websites and earn every-time someone makes a purchase via them. Let’s say I own a website ShoutNinja.com and I am an affiliate of Godaddy, so if any user comes to Shout Ninja and click on this link to make a purchase on Godaddy, i will be rewarded from company Godaddy for promoting their product on my website and referring customers to them.
Reseller is a company or individual that purchases goods or services from other company with the intention of selling them for profit rather than consuming or using them. Let’s say I have multiple friends who wants to purchase hosting. Also, i have a good network over web. So, I purchase a reseller plan from some hosting company like Bluehost. Now, I create my own website and resell those as per my norms.
Now, you know the definition of affiliates & resellers, its time to dig more on pros and cons of both:
Setup:
Affiliates are easy to setup, just signup for any affiliate, get the code and you are ready to promote their content. Some companies have list of affiliate products under them like Commission Junction, Clickbank,etc., so you just have to create account on them and you are ready to promote any of their products. You don’t need to sign any contract or have legal implications. On flip side, setting up reseller is more complex as it requires you to set up billing solution, client management, payment gateway and so. You may have to go for large agreements.
Upfront cost:
If you are becoming an affiliate, you don’t have to pay a single penny as upfront cost so you are not betting anything but if your intention is to resell, you have to select some package and but it in advance so that you can sell it later.
Office:
Affiliates are mostly an individuals like us who don’t need any office space or infrastructure to start. Just create a website and start promoting affiliate products. You can even promote them via social media or emails. Resellers on the other hand require a proper office and infrastructure. Resellers is almost a company that sells the products with only difference that they first purchased it from some other company.
Customer service:
When someone makes a purchase via affiliate, they don’t even are aware of it. If they face any technical problem, they will directly contact the company from where they have done a purchase so you as an affiliate don’t have to worry about any customer issue or tech support. But reseller acts as a company and selling products themselves so you as a reseller have to give good customer service to retain your clients. Some businesses like hosting reselling requires a 24*7 support as downtime of even 10 minutes may cause a big lose to your clients.
Income:
Most of the affiliate system works in a way – If someone purchased a product via your affiliate link, you will get commission on customer’s first purchase but when customer renew their service next year, you don’t get paid for that. Also, if customer has already done a purchase from company you are promoting, you may not be eligible for commission on its next sale. So, you got paid only once and sometimes not even one time. But reseller take big advantage here, they keep on earning for ever until they can retain their clients. Resellers may count to earn recurring income.
Control:
Affiliates are the third party that are promoting products of some other company, so they can not have any control over the business, prices or policies. All referrals are subject to company’s Terms of Service only. But resellers have full control over the business, prices or policies.
Payout limits:
Different companies have different threshold to take out your earned money to your bank. Some may have a limit of $50 or some of $100, it depends upon the type of business, ticket size and company internal decisions. Resellers get credited as soon as payment gateways clears the transactions within 2-3 days irrespective of amount.
Time to start:
You have a website, awesome – Choose any product in your niche and start affiliate business in next 5 minutes. Planning to resell, it will take time to setup all processes and office with motivated support team, if you can handle this all of you, its great.
Profit:
Companies are their to earn profits. If they give all to you how will they survive, so you get a small amount from sales driven by you and take a lot of time to reach masses. Being a reseller on other side help you earn more money in less time as all of your earnings will be with you only.
| Affiliates | Reseller |
|---|---|
| No upfront cost to join. | Initial upfront cost by for package. |
| Easy to setup | More complex to setup |
| No need for office/ infrastructure | Need to setup office/ infrastructure |
| No need to have tech support or customer service team. | Need to establish tech support team. |
| No worries about billing & Invoice handling | Need to handle all billing & invoicing of clients |
| No competition with existing providers | High competition with existing companies |
| Can affiliate products from different companies or even competitors | Can resell only single company products |
| Never has to deal with legal agreements and large contracts | Taking care of all legal things yourself |
| Can start in next 5 minutes | Required time to setup |
| Not worth if planning to sell at large scale | Have wonderful margins |
| Can not be clubbed with any service | Can have add-on to existing services |
| Fixed packages set by company | Customize packages according to own/ client needs |
| Paycheck is not too good as compared to reseller | Paycheck is awesome |
| Minimal payout limits | No minimum payout |
| Cost decided by company | Can decide your own cost to charge |
| No control over the business, prices or policies | Full control over the business, prices or policies |
| Income for first time | Recurring income till customer is with you |
So, you have seen lots of difference between affiliate & resellers and understand pros & cons of both.
Concluding both, I think you can start as a reseller as an add-on if already giving services to your clients. You already have a good client base and running office, it can be good opportunity to earn a recurring income and that too at a massive scale. This business is going to boom in coming decade as internet penetration & digital awareness is increasing at a fast pace.
But if you are a blogger of individual who don’t want to sign large agreements, cannot give customer service and can’t risk your money – start with affiliate. It’s a viable business and many affiliate marketers are earning good from this by applying their content & SEO strategy into it. You can start website on wordpress under 5 minutes and start promoting products from different vendors.
My Personal experience: I started out as a affiliate on StartupYar and then move to reseller on Beginner Host (closed now). Reseller cost me bucks (which i lost), poor server performance cost me headache as clients were calling in night when their site was down. Payment gateway approval also causes lots of issues. Finally, i quit the reseller business and get back to my all time fav. Affiliate 🙂.
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