I have always had this dream of owning a distribution business , more like a high-end supply chain logistics company.
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I have always had this dream of owning a distribution business , more like a high-end supply chain logistics company.
Distribution Business looks attractive from outside. Distributorship can be given for the for entire nation, a region, a state, a city or an area within the city. It all depends to capabilities of a distributor serving the market.
Distributor should have thorough knowledge of the product and market, capital, warehouse and relationship with retailers and company.
Product and Market- Company’s marketing team often checks the knowledge and interest level before giving the person distributorship. With knowledge of the product the distributor can get more people to sell company’s product to the end consumer by explaining why his product is better.
Capital – Money to buy inventory from company and give it to retailers on credit. So for 60-90 days your payment is stuck.
Relationship- should be trust worthy and popular to improve the business.
Distributorship is often on a contractual basis and is renewed after few years.
There are plenty of products looking for a market and markets looking for products. You just need to research the industry you are interested in, talk to retailers about what they sell, who they buy it from and get a good feeling for what’s missing. Sales reps ought to be your best friends and source of info.
Visit industry trade shows, they are a mine of information where you can identify products that could interest you. Work out a plan for the resources you will require, the team you will require. Organize sufficient cash flow. Distribution businesses are typically cash flow hungry. Then hunt down manufacturers, get samples, show retailers and sign deals. Workout in the deal some manufacturer % funding to support marketing & collaterals as retail activations will be your biggest concern to get the required sell-through. A good source of info are retailers themselves in order to understand what the trading terms will be.
Once you have established minimum presence. Talk about your successes and use those to spread and grow. Stabilise your bases and beware of growing overheads too fast.