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Tour & Activity Industry Terms

What is a Reseller?

A reseller is an individual or business that sells a tour or activity which they do not own or operator.  Resellers can include OTAs (online travel agents), DMCs (destination management companies), traditional travel agents, activity desks, and concierges.

Pricing

Tour and activity operators generally provide resellers with either a net rate or a commission depending on how the reseller plans to sell to consumers.  In either case, it is important that the operator set pricing that is appropriate for their business and the market.  It is also important that operators set a policy that resellers are not allowed to resell products at less than the going retail rate as provided by the operator.  Discounting can result in consumers choosing a reseller channel over a direct channel which causes erosion of price integrity and brand value in the marketplace.

Payment

Resellers pay based on whether they fall into two primary categories, those that sell using an agency agreement and those that sell on a cash basis.  Those that sell using an agency agreement receive net rates and are invoiced by the operator on a monthly (or other schedule) for sales made during the period.  It is recommended that, whenever possible, operators require a deposit or restrictive credit terms to avoid payment problems with resellers.  In addition, commission sales afford the operator more security as they require the operator to pay commissions to the reseller on a monthly basis based on sales.

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