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Posted by on Nov 26, 2013 in Tips for Business Referrals | 0 comments

Start a Distribution Business

Start a Distribution Business

Thinking of starting a new business in distribution or already in the business and thinking of expansion?

Here are a few vital tips!

As a distributor you are to equip yourself with the fundamental knowledge of the product you intend to trade in and understand the most cost effective and time saving means of reaching the wholesalers, retailers and end users while still making your marginal profit.

Manufacturers need retailers to sell their products to end users. The distributors are the key to this chain as they help to move the product from manufacturer to target markets by creating a viable distribution network.

The network could be in the form of a Retail Distribution Network which sells directly to consumers (end users) or Merchant or Wholesale Distribution Network which buys products from the manufacturer or other source, then move them from their warehouses to companies that either want to resell the products to end users or use them in their own operations.

Generally, such operations are run from one or more warehouses where inventory goods are received and later shipped to customers.

However, when it comes to setting up shop, your needs will vary according to what type of product you choose to specialize in. One could conceivably run a successful wholesale distribution business/ network from their home, but storage needs would eventually hamper the company’s success.

In order to succeed in the wholesale-distributorship business you must possess:

  • Good negotiation skills: This involves being able to buy the product at a low price, make profit and still make the deal attractive to the end user.

It is ideal is to get your products at the least cost obtainable from manufacturers and suppliers and then make such product available to wholesalers at an attractive cost despite your profit been made. This is where Business Referral Companies such as Lastprice.com comes in. At Lastprice.com we save the distributor the task of finding the right manufacturer for a proposed target market and getting the best bargain for such goods.

  • Good sales skills and/or Good distribution channel: As a distributor you should be well grounded with markets which are open to your product and the best means of reaching out to your target market area.
  • Business management skills: As a distributor you also have to be sensitive to the needs of your target market and the most cost effective means of meeting those needs.

A distributor bridges the gap between the manufacturer and the wholesaler as well as the retailer and the end users. He is in the position of getting feedback from the end users from the wholesaler and knows what products users are keen and how much they are willing to pay for such products.

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