7 Smart Tips to Start Your Distribution Business

Virtually anybody can start a distribution business – however, you would need to have a bit of passion and drive to ensure that your distribution business thrives and eventually becomes successful. Generally, distributors purchase products directly from the manufacturer before selling them to others – hence, they are commonly regarded as middlemen. Below are a few tips to help your distribution business grow

1. Decide on a product for distribution

This is by far the most critical part of your distribution business. Ideally, you want to do your research here and pick a product that is sure to do well on the market. Apart from sourcing for a product, you would also have to ensure that you have a reliable company to always buy these products from when you need to restock. 

2. Get in touch with a company that supplies what you sell

Once you have successfully settled on a product you would like to officially distribute; you need to now ensure that you find a reliable shipping policy/company that is effective and yet affordable.

Ideally, you want your products to get to you as quick and as safe as they can. A good shipping policy can be the blood vessel of your distribution chain.

3. Settle for a company name

While this may seem trivial, it is indeed vital. Ideally, you can pick a simple company name such as your initials followed by the word “Distributors”. Although, it is important that you choose a company name that commands respect and depicts real professionalism.

Also, you can get in touch with businesses near you that sell items that you wish to distribute. The goal here is to speak to whoever is in charge of purchases and convince them as to why they should use your distribution services.

4. Keep in touch with the market

Consumer taste can change very quickly, and it is essential to be one step ahead of current market trends and consumer choices. Failure to keep in touch with current consumer choices on the market can cause severe damages to your corporate strategy and can even bring your entire distribution business to its knees.

Therefore, identify the items that people want and how much they are willing to pay for them. This will go along way in defining your distribution strategy.

5. Building good relationships is vital

Good relationships are essential to a distributor-consumer transaction. Distributors only help to close the gap between manufacturers and the final consumers. Therefore it is necessary for you to build and foster positive relationships with consumers and retailers within the supply chain.

Here the goal is not necessarily to crash the prices of your products to outsell your competition; instead, seek to build strong relationships that are established on mutual trust and understanding that can turn out to be priceless.

6. Stay on top of your credit

Distributors play the role of linking manufacturers and consumers and getting stuck between the value chain has its own advantages too. As a distributor, the onus lies on you to make the connection works seamlessly, by taking the producers product to the market and helping customers have access to them easily.

However, in the process, ensure that you are not overly providing credit extension to customers.

This can happen where a customer demands an increase of their credit limit while your manufacturer is also seeking for the payment of products supplied to you. Adopting strict and healthy credit check references, in addition to explicitly explaining your terms of credit and payments to new customers and setting a credit limit can help you avoid this dilemma.

7. Leverage on technology

Businesses are getting smarter, and if you refuse to move with the trend and embrace modern technology, your competition will eventually drive you out of business. Because every business is different, you would need to come up with a unique strategy to dominate your target market. Usually, different markets will require a different approach and level of technological input to grow.

However, as a distributor, it is essential to keep track of your inventory, order processing, keep track of your accounting and provide a flexible payment plan to facilitate transactions between you and your customers. Which is why a comprehensive order management software like the EMERGE App is instrumental to the success of any distribution business. The ease at which Emerge can manage your business workflow from sales to delivery and keep track of product location is crucial to any distribution business.

Building healthy relationships is crucial to the success of any business, especially one that involves you bridging the gap between the manufacturer and the final consumer. In addition, adopting some of the best technology in combination with being on top of market trends, can send your distribution business to the top in no distant time.


Leave a Reply

Your email address will not be published. Required fields are marked *