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The Two Types of Resale Rights

Jun 24, 2008
In the field of marketing, it is always important to know what intangible items are included in any transaction. It is important to realize the various rights and various limitations that come with buying a tangible good. This is because such intangibles may affect what a person intends to do with the item that he or she has bought. One such intangible is the resale right.

What are resale rights? Well, there are certain types of merchandise which are intended only for the consumption of the customer. This merchandise is not intended to be profited from by a consumer in any other way.

There may be a lot of reasons for this. Some people may not want others to take credit for their merchandise. These people try to avoid any other name from being associated with their wares.

Another reason would be to maintain a hold in the market. By making sure that no other person is involved in selling the product, a person can make sure that he or she would get all the customers who want that product. Thus, no one else will profit from the entrepreneur's hard work.

Entrepreneurs also may prevent other people from redistributing their merchandise for the sole reason that they want to maintain the retail price of that merchandise.

When introducing a new product into the market, it is vital that the price be considered in the marketing strategy. Any change in the price could upset the balance on which a marketing strategy is based. This could lead to a disaster in business.

Resale rights, when included with merchandise, allows the buyer to actually re-sell the product to other consumers. This means that a person who buys a product with resale rights can actually profit from re-selling that product. The profit margin for this would understandably be low, but the point is that there would be profit!

Before you get excited and start buying all sorts of merchandise with resale rights, however, you need to remember that being smart with your money will get you more returns. What does this mean? Well, not all people know the fact that there are various types of resale rights and choosing the right type is essential in achieving success.

1) Normal - normal resale rights allow a person to resell the merchandise for the consumption of others. This means that a person can profit from the sales of a certain product and not much more.

2) Master - master resale rights allow a person to sell both the merchandise and resale rights to other people. This means that a person can gain profit not only from the sale of the merchandise but from the sales of the rights as well. Because of this, the profit margin would be much higher than that of the normal resale rights.

3) Modifying - modifying resale rights allow a person to tweak the various features of a product and then sell the product. This means that it allows a person to make improvements on the merchandise which would increase the price. Few manufacturers actually sell this type of resale rights as they believe it would destroy the purity of the product. It is also dangerous since this type of resale rights would allow a person to sell a horribly modified product in the name of the original product. Discretion is needed in selling this resale right.
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