Almost every sealcoating contractor, once they reach a certain level of production, considers selling sealer. The logic seems straightforward: buying in larger volumes lowers the per-gallon cost for your own projects while generating additional revenue from sales to other contractors. But the reality of becoming a sealer reseller or distributor is far more complex than most contractors anticipate. Before making this move, it is essential to understand the difference between a reseller and a distributor, evaluate the true profit potential, and develop a sound business plan. For a deeper look at the materials involved, see our comparison of Refined Tar Sealer Vs Asphalt Based Sealer a to understand which product suits your market.
The Distinction Between Reseller and Distributor
Sealer manufacturers draw a clear line between a reseller and a distributor. A reseller is typically a contractor who sells sealer as a side activity, perhaps carrying a few additional items in inventory. A distributor, by contrast, operates a full inventory business that supplies the complete range of materials sealcoating contractors need.
What Defines a Reseller
Resellers are usually contractors who want to buy sealer at a lower price by purchasing in higher volumes. They sell the extra gallons to other contractors to offset their own material costs. According to Lee Lowis, president of GemSeal, many resellers overestimate the profit they can make and underestimate the costs involved. The supposed savings from bulk purchasing often fail to materialize once the true costs of handling and selling are factored in.
What Defines a Distributor
Distributors treat the sale of sealer as a standalone business. They carry a full inventory that includes sand, additives, crack filler, paint, tools, and any other products a contractor might need. Bill Maclean of The Brewer Company notes that his firm has tightened its requirements for becoming a distributor over the past 25 years. Today they want to understand the applicant’s business model and commitment before granting distributor status.
Jeff Cayton of Neyra Industries explains that if customers have to go elsewhere for products you do not stock, they will buy from the competition entirely. The goal is to become the single source for everything a sealcoating contractor requires.
Inventory Requirements for Distributors
Girish Dubey, president of STAR Inc., says that new distributors can start by carrying the basics. They do not have to stock every sealer product the manufacturer makes, but they must carry what sells in their local market. Key requirements include a source of clean water, sand and additives, crack filler, application tools, and paint for parking lot striping.
Dubey notes that most distributors who are also contractors end up using the majority of inventoried products themselves, so carrying a full inventory does not necessarily create a burden.
The Real Profit Potential of Selling Sealer
The driving motivation for most contractors considering sealer reselling is the prospect of reduced material costs and extra revenue. However, industry experts consistently warn that the margins on sealer are much thinner than most contractors assume.
Margins Are Thin and Volume Must Be High
Cayton explains that margins on sealer are very thin, so contractors need huge volume to generate meaningful profit. If a contractor works on a 10 percent margin on a product selling for USD 2 per gallon, that is only 20 cents profit per gallon. A typical USD 5,000 sealcoating job at 10 percent margin yields USD 500 in profit. A contractor would need to sell 2,500 gallons of sealer to match that same profit from reselling alone.
Maclean puts it bluntly: if you understand your labor and overhead costs and sell profitable work, you will make significantly more money than you will by reselling sealer. Reselling is not a revenue stream in the traditional sense. It is a different business model entirely.
Hidden Costs That Eat Into Profits
Many contractors overlook the hidden costs of becoming a sealer reseller. These expenses can quickly erode the already thin margins:
- Additional staffing to manage the yard during business hours and weekends
- Tank and pump maintenance, including meter calibration to ensure accurate dispensing
- Insurance and liability coverage for retail operations
- Storage space and site preparation for bulk tanks
- Credit card merchant fees if accepting electronic payments
Lowis points out that if a contractor has to send a crew member out on a Saturday afternoon to fill 150 gallons of sealer, they probably did not make any money on that sale. The labor cost alone wipes out the margin.
Comparing Sealer Reselling Income to Contracting Income
| Revenue Source | Typical Margin | Profit per Unit | Effort Required |
|---|---|---|---|
| Applying sealer (contracting) | 10-20% | USD 500 per USD 5,000 job | Moderate |
| Reselling sealer only | 5-10% | USD 0.20 per gallon | High |
| Full distribution | 10-15% | USD 0.25-0.50 per gallon | Very high |
As the table shows, the effort required for distribution far exceeds that of straightforward contracting, while the profit per unit remains modest. Industry experts consistently advise contractors to focus on winning a few additional jobs each year rather than building a reselling business, as the return on time invested is substantially higher.
Doing Your Homework Before Making the Leap
Manufacturers emphasize that contractors interested in becoming distributors or resellers must do thorough due diligence. A business plan is not optional; it is essential.
Developing a Business Plan for Distribution
Cayton explains that most contractors who approach manufacturers about reselling have not done any due diligence on their own. They have not developed a business plan or thought seriously about what becoming a distributor entails. He advises contractors to start by writing a complete business plan for the distribution operation before asking whether it is a direction they want to go.
The business plan should address several critical questions. Who are the potential customers in your market? What products do they currently use? Will they buy from you given that you are also a competing contractor? What price points are realistic? How much inventory must you carry to be credible?
Assessing Your Market and Competition
Not all markets are large enough to support a sealer distribution business. Maclean explains that if you are in an area with a small number of potential customers, reselling without the larger commitments of time and inventory might make sense, but you still need to assess who you will sell to and what products they use. If your market already has established distributors who stock what customers want, competing with them will be difficult.
Selling to competitors presents its own challenges. Cayton warns that if you compete on jobs with the contractors you sell to, they will not be enthusiastic about buying material from you. Many manufacturers suggest focusing on smaller contractors with whom you do not directly compete. Some successful contractors pass along jobs they do not want to smaller contractors who buy material from them, strengthening both relationships.
Evaluating Your Yard and Facilities
Before committing to a distribution business, contractors must evaluate whether their existing yard is suited for the operation. Key considerations include:
- Space for a bulk tank and sealer delivery access
- Room for customers to pull in and fill tanks without causing congestion
- Access to a clean water source for mix design
- Zoning compliance for storing and reselling sealer
- Security considerations for having multiple customers on site daily
Dubey emphasizes that manufacturers look at these factors carefully when evaluating a potential distributor. They visit the contractor’s yard, assess its suitability, and research the local market themselves before granting distributor status.
Building a Supportive Reseller Business
For contractors who decide to move forward after completing their due diligence, building a successful reseller or distribution business requires a commitment to customer support, accurate operations, and realistic expectations.
Customer Support and Problem Resolution
Manufacturers expect their distributors to support customers as strongly as the manufacturers support them. This includes training on product basics, mix design, proper application techniques, weather limitations, and proper disposal of materials. Lowis points out that these are concepts a contractor probably already knows but should never assume their customers understand.
When problems occur, the distributor must be prepared. If a job goes wrong, the contractor who bought the material will return to the supplier for answers. Cayton notes that the distributor shares the risk. Lowis advises working through the same checklist of questions you would use on your own jobs: when was the material picked up, what were the weather conditions, what was the pavement like, and so on.
Manufacturer Support for Distributors
Once a contractor becomes a distributor, sealer manufacturers provide substantial support. This includes education on how to represent the product, how to communicate with potential customers, and how to understand the pavement maintenance market. Manufacturers help new distributors understand that contractors may need after-hours service and weekend pickup capabilities.
Maclean describes it as a shared responsibility. If a distributor encounters an issue they cannot resolve, the manufacturer steps in. But if the distributor cannot handle simple problems, the manufacturer will not want them as a partner. Successful sealer distributors have grown by helping their customers grow, with the manufacturer supporting that growth.
Practical Tips for New Resellers
Industry experts offer several practical recommendations for contractors entering the sealer reselling business:
- Make it a cash-only business to eliminate credit risk and avoid merchant fees that cut into thin margins
- Install a calibrated meter on bulk tanks and check it regularly, because an off-calibration meter can silently eliminate your profit
- Maintain enough inventory so customers never have to go elsewhere for what they need
- Have an employee available to sell during business hours and on weekends when contractors need material
- Never discuss your ongoing projects or jobs in the bidding stage with customers who buy sealer from you
- Prepare for the impact on your office and yard, including having competitors and strangers on your property daily
Lowis offers a final word of caution: weigh how much money will drop to the bottom line at the end of the year from reselling versus how much you could earn by completing a few more sealcoating jobs. In most cases, the math favors staying focused on contracting.
Making the Final Decision
So should you become a sealer reseller or distributor? The answer depends on your market, your willingness to operate a separate business, and your realistic expectations. Dubey notes that people who fail as distributors are those with lofty, unrealistic ideas. People who do their homework and have some skin in the game tend to succeed because they have reasonable expectations.
If your market has no existing distributors and you have the space, staffing, and commitment to support customers properly, distribution may be a viable add-on. But if your primary goal is increasing profits, investing that same time into winning additional sealcoating contracts will deliver a better return. For more expert guidance on sealer selection, see our guide to Refined Tar Sealer Vs Asphalt Based Sealer What pavement contractors need to know. Business owners considering broader operational changes may also benefit from reading about Should a Builder Become a Remodeler Key Considerations for making similar strategic pivots. Finally, understanding risk management is essential for any growing construction business, as explained in Who Should Buy Builders Risk Insurance a Complete guide to construction insurance.