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What is the difference between Reseller and Affiliate programs?

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Jan 27, 2020 2:54:31 PM
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What is the difference between Reseller and Affiliate programs

It can be confusing as terms like "reseller program" and "affiliate partner" are been put on websites without really explaining what the partnership is really about. To help further, we'd like to point out the advantages for each type so that you can see which one suits best for your business.

Reseller is a company or individual who directly resells a product or service to their audience via their own website under their own brandname. The customer is your customer, you are free to decide your own profit markup. Customers interact with your brand directly. 

A reseller opens his or her VPN reseller account and then sells VPN. The reseller provides the 1st line support for his or her customers, backed up when needed by VPNresellers support. 

If you are Technology company, Hosting provider or Entrepreneur, a Reseller program is the right choice for you. You will be able extend the range of provided services offering VPN to your customers. 

Affiliate is a company or individual who promotes a product or service from another company to their audience, in exchange for a commission on the sale when such occurs.

You are strictly an evangelist for someone else their service. You refer customers to another company, where they open their own accounts with the affiliate's code or link to let the company know who referred them.

The customer is not your customer nor do you do the transaction, you cannot decide your markup for profit. Customers do not interact with your brand. If you are a blogger or industry news website owner, an Affiliate program will be most beneficial for you. This is because you have an audience that could be interested in the product but would not want to buy from you directly. 

Are there exceptions? 

Yes there are! We have seen huge success of a IP-TV related blog that became a reseller and offers their audience a VPN service under their own brand name. They primarily did this to have a more stable and recurring revenue flow as simply working with Ads wasn't enough to pay their bills. They had build so much trust with their audience that consumers trust their brand to signup.

Pros and Cons of Reseller versus Affiliate

  • Reseller pros
    • Low Startup Costs
      When you start a reseller business all you need to invest in is a website and marketing. There are no infrastructure costs, and you only pay for what you have sold.

    • Create a Scalable Business
      With a reseller business, you can expand your revenue near infinity. In the VPN example, you are not selling your time for money, so your revenue can scale. All you need to focus on is signing up more customers. 

    • High-Quality Service with Less Work
      By partnering with a quality reseller business you’re selling their services under your name. If you partner with a company whose service you love, then you’ll be able to pass on this same quality of service.

  • Reseller cons
    • You Don’t Have Complete Control
      As a reseller, you won’t have complete control over all aspects of your business. You can control most of the front end, but the back end service or product is all dependant on the company you align yourself with. If there are issues with the service, there won’t be much you can do about it. It is therefore essential to find a partner who you can trust.

  • Affliate pros
    • Easy to Get Started
      All you need to get started with affiliate marketing is a link. Once you have your unique tracking link you can promote this to your existing social media audience, or start to create content about the service you’re recommending on your own website. 

    • Low Level of Responsibility
      Once you’ve referred a customer to a company, your work stops there. You don’t have to deliver on the product or service. All you have to do is sit back and wait for your commission to arrive. 

  • Affiliate cons
    • Commission Only Sale
      Unlike running your own business, even if it’s reseller based, you don’t really have the opportunity to grow your income via upsells or other products with affiliate marketing. 

      Sure, you could recommend other products to your audience down the line, but right out of the gate your income might be a little limited. You’re also limited by the commision that the affiliate company is willing to pay out. 

    • Sales Aren’t Guaranteed
      There are no guarantees in the world of affiliate marketing. Just because you sent a lead to a company doesn’t mean that person is going to follow through with the sale. While there are click-based programs that payout affiliates based on the traffic they drive, most pay out only upon confirmed sales.



 

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