In this podcast episode, Ian Peterman, CEO of Peterman Design Firm, explains how resellers and retailers operate and how to assess whether partnering with them adds value to a product launch. He defines resellers as entities that purchase products wholesale and sell them onward, noting that Amazon functions as a broker while big‑box stores like Walmart act as traditional resellers. He clarifies that every retailer is a reseller, but retailers typically have physical or online storefronts and interact directly with customers. Peterman emphasizes the importance of value‑add—services such as kitting, bundling, financing, or convenience—that differentiate a reseller and justify a manufacturer’s partnership. He shares a concrete example of an educational kit where a reseller’s kitting process dramatically increased sales. He then outlines strategies for creating value‑add partnerships, including bundling products, aligning with complementary product lines, and offering attractive wholesale terms. Finally, he warns against partnering with retailers that provide no value‑add, that require extensive customer service, or whose brand values clash with the manufacturer’s, as these can erode margins and brand perception. The episode concludes with a call to action to subscribe and learn more about Peterman Design Firm.
Chapters
Hello, my name is Ian Peterman. I'm CEO and founder of Peterman Design Firm, and on today's episode about launching a product, I want to talk about resellers, retailers, and stores and whether they are a value add and worth it to partner with and, you know, what, what you can do to make it so that they are a value-add and things to avoid. I'm going to talk about how resellers work, is a retailer a reseller, value-add, and what to avoid. So first, how resellers work. So resellers work just what they sound— they take your product and they sell it again to a new customer. And that process is different for everyone. Amazon is technically a reseller because you don't actually interact— depending on how you set it up, you may not actually interact with the customer. And while they may not purchase it from you, they are acting as a broker for that. Now, resellers in the truest sense are places like Walmarts and big box stores and and other online retail websites and things like that that do actually purchase your product, stick it in a warehouse, and then ship it to their customers as their customers order it. So the whole point of a reseller is that they're buying in bulk. So they buy it at a discount, they buy it at a wholesale price, and then they sell it at retail and make— making that profit themselves. So second thing is, is a retailer a reseller? So every retailer is a reseller. There are different types of resellers that are more individual. So you may have a reseller that isn't necessarily retail. You may have somebody that adds in your product to their product line and and resells it without modification. They may just, you know, not changing it at all necessarily, but they are reselling it, but they may not sell it directly. They may not sell it by itself. It may be part of a package. It may be part of a grouping of products. So retailers are absolutely resellers. They are in that— that is part of what they are. The little bit of difference is that retailers usually have you know, retail space. So they're interacting directly. You may also have resellers that are additional middlemen where they will buy it at a wholesale rate and then they won't sell it to individual customers. They're more of a distribution center, and so then they end up reselling it to someone else who then resells it again. And that's part of why the whole direct-to-consumer model started to become really popular is If you get too many of those middlemen, it becomes really expensive and very little profit margin for the actual manufacturer, whoever's really making and owning the product, because they have to price themselves so low so that everybody gets a little cut. And by the time you get done, it's not much left for the person who actually makes the product and came up with it. Now, for value adds, there's a third thing I want to talk about here. Is value-add is really important. And part of the reason why a lot of places and a lot of startups— and it, it's been this move towards direct-to-consumer sales— is because there is no value-add for a lot of resellers. So value-add is where they take your product and they actually add something to it, whether it's their level of customer service or whether it's being able to have a special option or be able to offer financing, you know, depending on the type of product. And without that, that's why a lot of customers have moved to just buying direct. You know, the convenience is a factor. So retailers' websites, e-commerce websites that are selling your product, there's a level of ease because they might be looking for something else. That's why Amazon is so successful, because you go on there for one thing and you can order a bunch of different things that, you know, a store in person may not even have all of, and you can just order it from one place. So convenience is sometimes a value add. However, that doesn't mean every retailer has it. So you want to make sure if you're launching a product that especially at the beginning, if you're going to sell direct-to-consumer and you want to get into box stores and things like that, make sure that there's a value add. Make sure that your customer actually cares about what that retailer is offering. And each retailer, each reseller offers its own thing, their own value add or none. And you need to determine whether your customers are going to enjoy that value add. So one of the things that I've done with the publishing company I've run is that one of the dealers— we sell our products as almost exclusively wholesale education material— and one of the resellers, they sell quite a bit of our product. They package it into a group of products that they sell as a kit. And the kitting process, because they've gone through, you know, our product is one of many products in this kit, educational kit. And because of that, that value add, people buy from this particular dealer more than they ever would have bought from us as an individual company, even though we've— I've done the direct-to-consumer model, it's still available. But this kitting process where they curated a group of products that all work really well together in this education package saves people time. It lets them just grab all of the things that they need or a majority of them into one kit. And by doing that, that value add is so strong that there is any, any products that are in that are selling really well. And so that kind of value add is something as a new product launch you want that because it's going to attract more people. And if you're wanting to do the retailer-reseller process and be a little more wholesale, or at least have wholesale, You want to make sure you have strong value-add partnerships with those retailers because that's how they're going to sell more and they're going to want to pick up, keep your product. So if it's not selling for them, it's going to be hard. You know, they're not going to be really interested in the product as much as if they're selling a bunch of it and it's providing, it's letting them add more value to their customers. Then that kind of scenario really lets you both benefit from the product where the retailer and you and the customer all have a higher— enjoy a higher level of value because your product is providing additional value for the end consumer, because the retailer is able to package it and it sells more because your product is in it and it's one of the attention grabbers. So you want to think of, you know, that's just one example. So think of other ways that you can have your product bundled with something, or you it fits with another product. It doesn't have to be a big bundle. It could be, oh, our product really works well to help this other product you sell. And that can sometimes be how you get into a reseller or a retailer in the beginning when you don't have a bunch of sales. You're not a— maybe you're a small brand, barely known, or maybe you totally start up, nobody knows about you yet. One of the ways that you can get in is offering, well, our product pairs well with this other product that you sell. Why don't you bundle it? We'll give you this wholesale price, make it worth your while, and it'll work well for the customer. And so that can be a way by creating a value add with them, you're gonna help your resellers be more valuable to their own customers, and it'll land you more sales as well. Last thing I want to go over is what to avoid. So a few things you want to avoid. Obviously avoid retailers that have no value add. If you're a barely there startup, if the only value add is they might have some customers that may want your product, then it's not going to be as much of a value for you. Now you can still set them up. See what happens, but you want to focus your energy on retailers that are going to be able to say, yeah, we have, we have customers that like this type of product, or we have products that pair well with your product, and we have a pretty good chance of actually selling product. So you want to make sure you avoid no value add. That's not going to be good for you, and it doesn't give people a reason to shop at that store versus you. You also want to avoid, I would say, any retailers if your product requires a lot of customer service. If you're a startup and you're launching a new product line and there's a lot of customer service, having a direct relationship with the customer will probably be a little bit smoother, at least in the beginning. Once you're bigger, then maybe that can work out well and you can be selling enough volume, but you may want to have control of that relationship more so, especially if you're doing an early release and you're wanting a lot of feedback. It's better if you're the one that sells it to them. You already have their information. You can reach out to them, contact them. So that is going to be something you want to look at and how you want to relate to your customers and how much do they need to be in touch with you. Is it something that needs a lot of handholding? You know, is this something that requires setup where you need to help set up the product for them, or that's one of the main things that you offer as a, you know, add-on, so to speak, then you may want to kind of stay away from resellers and retailers initially. Now, there are some resellers that are really good. They're more— that might fit a little bit better that are commission-based, and they just resell as a point of sale or like a salesperson or a sales team, and those can work. Things to avoid with that, of course, is that you want to make sure that person or team really matches your brand. And so that's the other thing is don't just— just because a retailer can sell your product and maybe they'll sell a lot, you want to make sure that brand values align because People are aware of brand values. People think about things like this now. They think about, well, I don't want to buy from this store because X reason. They don't do this thing, or, you know, whatever that is. You want to make sure that you're aligning your brand with resellers and retailers who have similar brand values. So avoid anyone that does not match that. It's not going to be a good fit. And it could end up tarnishing your name a little bit if it really doesn't align, or if it's totally polar opposite, then people might be wondering why, why your product is in that store. So hopefully this gives you a little bit of information on, you know, how resellers work, retailer versus reseller, how to create that value add so that your retailers and resellers you partner with are able to sell your product more and get more value out, and in the end, their customers will get more value from it too, which is always good for everyone involved. Hey, thanks for watching. We really appreciate our viewers, and if you haven't subscribed yet, please do subscribe to our channel so you can get more great videos like this in your feed. And like the video. If you want to learn more about the Peterman Design Firm, please check us out on our website, petermanfirm.com. You'll find link and information in the description. And of course, we're on all social media as well, so check us out there. All right, thank you. Thank you.
