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Thinking of Starting a Distribution Business?

Thinking of Starting a Distribution Business

The product distribution industry is a big one. Wondering how big the industry is? In the United States, there about 300,000 distributors and they account for approximately $3 trillion in annual revenue. New entrants into this industry also have good profit outlook. As long as you have an entrepreneurial spirit and have the ability to plan well, you will thrive in this industry. Keep reading to learn more.

  • Start By Creating a Business Strategy

A good starting point for someone who wants to venture into distribution business is to create a business strategy. This requires strategic steps such as the following;

  • Choose Your Preferred Type of Distribution business

For instance, there are retail distributors and wholesale merchant distributors; the former purchases from manufacturers or distributors and sell directly to end users, while the later sells to fellow distributors or retailers after purchasing from manufacturers. You should decide which category is appropriate for your goal and experience.

  • Choose the Product You Want to Distribute

Also, it’s important to choose the product you want to distribute. Some people prefer to distribute a mix of products. You may base your decision on your passion. Alternatively, you may be drawn to a product because of its scarcity. If a crowded market is involved, you should consider providing niche products to specialized retailers.

  • Create a Business Plan

It’s important to come up with a complete plan of how your distribution business will run. It’s a great way to have a direction that will lead to the success of your business. In your plan, consider featuring your choice of distributorship, your preferred product or group of products, your company name, shipping method, and target customers.

  • Determine a Startup Cost

The costs will be estimated. It’s important to have a rough estimate of what is required to get your business up and running. Bear in mind that your major cost incident will be inventory. So, your startup costs will largely depend on the type of product you wish to distribute, as well as the scale. Costs of an office, warehouse, and or equipment’s should also be taken into consideration.

  • Determine How You Will Market Your Products

First, you need to determine what you want to sell and the people you are selling it to. Whatever the case may be, you need to create awareness of your product to your target audience. You can adopt different strategies, including one-on-one meeting, advertising, online marketing such as search engine optimization. It’s great idea to outsource search engine optimization to an expert.

Finally, you should make your distribution business legal and official by registering it. You also need to find a good location for your business.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

2 Responses to “Thinking of Starting a Distribution Business?”

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