A Guide to Third-Party Selling
When you start a home business, you won’t necessarily have the space to store an extensive inventory. These days, you may not even need it.
Thanks to third-party selling, you can operate your business without a personal storefront or an at-home inventory.
Even leading marketplaces such as Amazon, Etsy, Walmart, and Target are all making the move toward third-party seller accessibility. What are the benefits—and the drawbacks—for you as a business owner?
The Benefits of Third-Party Selling
As a seller, you’ll rely upon a pre-established marketplace such as Amazon or Etsy to house your business inventory. Joining these sites will cost you a hosting fee, sure. But, you’ll be able to start selling your wares without establishing your own domain and without the need to market yourself so ferociously.
The greatest benefit of third-party selling, however, is the ability to operate without an inventory. You can drop-ship through your platform (let your vendor handle shipping) or utilize a third-party logistics company (3PL).
If you operate through Amazon, you can even store your products in Amazon’s warehouses. You’ll also be able to use Amazon’s fulfillment guarantees to give consumers more security during delivery.
The Drawbacks of Third-Party Selling
Operating through a marketing middleman doesn’t appeal to everyone, and third-party selling isn’t a perfect practice. Some of the less-appealing aspects of a third-party marketplace include:
- Limited customization of your marketplace presence and personal brand
- Playing by someone else’s rules to remain in operation on your chosen third-party hosting site
- Significant platform hosting costs, depending upon your partner
- Enduring a “race to the bottom”—a cheapening of your product in order to retain public interest—when pitted against larger competitors
Is Third-Party Selling Worth It?
Looking to start a small business but don’t want to fuss about inventory space? Third-party selling might be perfect. These days, you have a variety of partners from which to choose, so you’ll be able to operate your business with greater freedom. Best of all, you won’t have to worry about tackling business challenges on your own.
You shouldn’t go into the practice blindly, though. While partnered selling comes with cost-effective and audience-garnering benefits, you’ll have to adjust your business’ budget and model accordingly.
The decision is up to you. How much do you value independence, and how much a helping hand would aid your business’ growth? Could third-party selling be for you?
Image attribution: William W. Potter – stock.adobe.com