We are delighted that you are interested in distributing our products. Below we will provide you with some information on the distribution of our products.
Who is the distributor?
Distributors are usually independent business owners who transfer products from manufacturers to market environments. They are an important part of the supply and demand chain. Distributors often buy products, store them and sell them using different processes depending on their specific purpose. They can serve as retail distributors, selling such products directly to consumers, or as wholesale distributors, buying goods from producers and selling products to other organisations such as retailers, traders, manufacturers and wholesalers.
Similar to retailing, the main objective of distribution is to buy goods and sell them at a profit. Comparatively, most distribution takes place exclusively in the business-to-business (B2B) sector. In essence, distributors serve as a link between the producers of the product and the final consumers. This can be a very lucrative business, especially in niche markets where distributors can grant distributors exclusive rights to sell certain products in certain regions.
What does a distributor do?
Distributors typically buy products from manufacturers and sell them to customers, such as retailers, for commercial resale or use. They can choose to sell any product – from food to cars, distributors can choose the industry they operate in. From here on, distributors enter into commercial agreements with manufacturers that dictate the terms of their relationship. Manufacturers can set contract prices for bulk purchases by distributors. In most cases, however, distributors take the main responsibility for the operations needed to sell the products, while manufacturers focus exclusively on creating the products.
Distributors usually form business partnerships with a network of retail outlets or buyers to whom they can sell products. These buyers purchase products from distributors, often at wholesale prices, and resell them to final consumers. Many distributors take care of the transport logistics, such as shipping, behind these sales, which is an important advantage for both manufacturers and retailers. Distributors can ship products domestically or abroad, depending on their specific industry.
In addition, customer care is a big part of the distribution business – as sales professionals, distributors need to build an infrastructure to provide customer support to retailers through their organisation. Although many conceptualise customer service as the responsibility of the manufacturers who make the products, this is usually not the case. Distributors can take care of accounting problems, shipping errors, product shortages, defects and other customer-related concerns. The distributor is often responsible for replacing defective or damaged products.
How to become a distributor?
Once you have identified potential manufacturers and suppliers, you need to apply to be their distributor. Each company will have its own unique application procedures, but almost all suppliers will ask you to go through an application process to see if you will be suitable for them as a distributor of their products. These procedures may require face-to-face meetings, site visits, analysis of financial statements, proof of your financial institution’s letters of credit and other steps.
If you are accepted as a distributor, you can start the tangible part of moving products from suppliers to customers. However, it is important to know that some suppliers, especially larger ones, may enrol you in their robust distributor training programmes first. These programmes are designed to help distributors develop the skills they need to sell their products effectively.
When you plan your business on the basis of the partnerships you have built with your suppliers and customers, you must make a deliberate effort to build trusting working relationships with them. These relationships are a key part of maintaining a healthy distribution business, as manufacturers ensure a steady supply of products, while buyers ensure a steady flow of sales. These entities will help you develop a profitable business model and grow as a company.
That’s why you should identify a point of contact in all the companies you work with – these individuals can help you navigate efficiently between the production and purchasing processes. They will be familiar with the culture of their workplace and this can be extremely useful when running a distribution company. They can also keep you informed about product details so you can provide effective customer support.
Skills that a distributor must have
Different skills can be useful in the work of a distributor. Depending on your specific industry and the size of your business, the exact skills you will need to succeed as a distributor will vary. However, there are some fundamental skills you should focus on when starting a new career that can help you enter the distribution field more easily. These skills include:
- Sales skills: as distributors are primarily involved in selling goods and products to customers such as retailers, wholesalers and other businesses, they should have excellent sales skills. These sales generate profits for the distribution companies. It is therefore important that distributors develop skills that can help them understand the needs of their customers, the type of products they sell and how they can effectively engage their customers.
- Interpersonal skills: distributors need to develop strong interpersonal skills, which usually accompany the sales skills mentioned above. From cold-calling customers to building relationships with manufacturers, distributors need to use their interpersonal skills to create trusted business partnerships. These skills are particularly important as secure partnerships are key to building a successful distribution business.
- Negotiating skills: many successful distributors are able to strike lucrative deals with manufacturers and buyers. If you want to make a profit, you will want to negotiate purchase and sale contracts that will benefit your bottom line. That’s why developing a strong base of negotiation skills can help you as a distributor in the long term.
- Operational skills: most distributors will need the operational skills needed to run a business. These operational skills can help distributors manage staff, logistics, budgeting, customer service and other key components of business maintenance. As companies grow, employees may take on these responsibilities, but initially the distributor will be responsible for these tasks.
- Research skills: distributors need to keep up to date with trends in their respective industries. It is therefore important for distributors to improve their research skills in order to anticipate which products will be favoured by market trends. Developing a keen sense for these forecasts can help distributors find relevant, saleable products and stay on top of their industries.
- Communication skills: as distributors are in regular contact with producers and buyers, developing skills to communicate effectively can be useful. These key skills will come into play in almost all aspects of running a distribution business, including sales, negotiations and operations. Therefore, distributors have much to gain from building a solid base of communication skills.
How to proceed?
Contact us with a presentation of your company and your experience. Tell us why you are interested in distributing our products and what potential you can achieve in this business. All interested parties are contacted and an online meeting is arranged to get to know each other better and discuss the possibilities of cooperation.