Reselling is a business model that allows companies to buy products or services from a major provider and resell them to retail customers at a lower cost than what those customers could obtain on their own. Reselling can be found in just about every industry that involves retail. You will even find it in international shipping.
Shipping services at the retail level are those services offered to individual consumers at retail prices. But like any other product or service, pricing is negotiable. It is up to the shipping solution reseller to negotiate pricing that allows it to offer discounts to retail customers but still make a reasonable profit.
The key to successfully reselling shipping solutions is to provide all the same services customers would get from the parent company. Anything less and a reseller runs the risk of tarnishing the parent company’s name and reputation. That’s a good way to get yourself booted off the reseller network.
Table of Contents
Providing Direct Customer Service
Preferred Shipping is a Houston-area company that acts as an authorized DHL International Import and Export reseller (Visit https://preferredship.com/ for more information). Simply put, they resell DHL international shipping services. Companies choosing Preferred Shipping are technically shipping through DHL, but they never deal with the German company in person. Preferred Shipping provides all the direct customer services.
Companies work with Preferred Shipping to print shipping labels, determine international rates, arrange for product pickup, and so forth. For all intents and purposes, the reseller acts as DHL’s hands and feet on the ground. They offer all of DHL’s retail services on the company’s behalf.
How Cheaper Rates Are Offered
It might seem strange that an authorized shipping reseller could offer better rates than the parent company. But that is by design. Again, we will use DHL as an example. The German company is one of the world’s largest and most prolific shippers. Would they be such a big industry player if they had to maintain operations in every town or city they deliver packages to?
Even if they could afford it, maintaining operations around the world would be a logistics nightmare. The global footprint is just too large. So instead, it makes more sense to maintain a network of authorized resellers in individual locales. They save money and still have a way to offer their services.
This all relates to cheaper prices in one simple way: DHL is willing to negotiate a more attractive pricing structure with its authorized resellers as an incentive to keep them in business. They will accept a lower profit margin in exchange for not having the burden of maintaining operations in tens of thousands of cities and towns.
Making Money on Volume
To offset the cheaper pricing that resellers offer, both they and their parent companies make money on volume. The goal is to ship as many packages as possible to as many locations as possible. Rather than making a higher margin on a small number of packages, they make less profit on a larger number of packages. Yet in the long term, they still make more money this way.
Being an Authorized Reseller
There is money to be made in reselling shipping services as long as a company acts as an authorized reseller. To do that, the reseller must adhere to parent company standards. It must follow all parent company policies and procedures. And it must never do anything to tarnish the parent company’s reputation.
Now you know what an authorized shipping solutions reseller does. They deserve some credit. Without resellers, global shipping would not be nearly as ubiquitous as it is in the modern era.