One key question that needs to be addressed by e-commerce businesses is whether to become authorized retailers for branded products. So, what is an authorized retailer, and what pros and cons do becoming one provide a reseller? Read on to find out!
What is an Authorized Retailer?
Authorized retailers, sometimes called authorized or official dealers, resellers, or vendors, are 3rd party businesses that sell under another company’s brand name. For example, an authorized Apple retailer sells official Apple products and is eligible to offer customers Apple warranties. Still, the retailer is independent and not an official part of Apple Inc, unlike in the case of a franchise. Though seemingly similar, authorized retailers differ from franchises. For example, corporate rules bind franchises requiring them to sell a single brand’s products, unlike an authorized retailer, which can sell products from multiple brands.
Function as Independent Brand Ambassador
Instead, authorized retailers occupy a distinct niche promoting and representing a brand’s products. Authorized retailers operate in numerous product categories, from jewelry to tech, and the designation provides peace of mind for brand-loyal customers. Often brands will provide training or instructional materials to official retailers, broadening their knowledge base and increasing their ability to assist customers with brand-related questions. Additionally, authorized retailers help build brand awareness and engagement. As a result, brands carefully select which retailers receive official status.
Optimize Your Operations Before Applying
If you seek official retailer status, ensure that your workflow and fulfillment processes are developed and efficient. Brands will be hesitant to offer this special status to retailers with problematic business practices. Instead, provide customers with excellent service and build your brand’s image for reliability and quality. With a strong reputation for trustworthiness, your business is more likely to receive authorized status.
Why Authorized Status Matters
Authorized retailers fill a specific role by acting as an endorsed link between the brand and customers. Meaning customers know an official retailer is more knowledgeable than a traditional retailer. Besides product knowledge, authorized retailers provide a positive brand experience.
Official Status Comes with Strings Attached
Obtaining authorized retailer status first requires approval from the brand. Most brands have applications for this purpose and may have additional requirements before extending the title of “authorized retailer” to a vendor. For example, other preconditions may include minimum ordering or ordering pre-approved product selections. While requirements will vary for each brand, consider if obtaining official status helps or hurts your business plan.
Understand Exclusivity Requirements
Another precondition might be exclusivity. This limitation would prevent an authorized retailer from selling products from competing brands. To understand exclusivity, let’s use Apple again as an example. Under an exclusivity agreement, a vendor that sells Apple products could not sell Android products. Depending on your business model, such limitations may become problematic.
A Partnership for Success
The link between a brand and an authorized retailer is time-honored and viewed as a significant benefit by customers. This close relationship assumes the retailer holds special status with the brand. Customers can often expect better pricing, access to a more diverse or exclusive inventory, and deep operational knowledge of the brand’s products. Customers interpret authorized status as a key selling point and sign of trust.
Let the Brand Generate Exposure
Another benefit of this special relationship is a brand’s website or marketing materials. Brands often note their authorized retailers, which can drive traffic and expand awareness of the reseller’s operation. Authorized retailers can also leverage a brand’s marketing to attract customers without increasing the reseller’s ad spending. This benefit is especially true for large, global brands with massive advertising campaigns.
Brand Protection and Restrictions
Since authorized retailer status offers tangible benefits, some brands restrict vendors from selling branded products without receiving official backing. In such cases, restricted vendors may experience disruptions to their supply as the brand bans the vendor from purchasing products through regular distribution channels. Such prohibitions are disastrous for a vendor and can damage a vendor’s reputation with customers who may assume the vendor acted inappropriately to receive such a product ban. Avoid this outcome by applying for official status with brands pivotal to your business.
Weigh Your Options
If your business model relies on specific branded products, consider seeking official status to bolster your business standing with customers. Reflect if the benefits outweigh the limitations associated with this level of brand partnership. Attaining the designation of an authorized retailer can be a boon for retailers looking to differentiate themselves by offering value, trust, and reliability to their customers.
