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How to Become an Electronics Distributor

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Consumer electronics have become important in our day-to-day lives. These products offer a good profit margin for those who broker the products from the manufacturer to the consumers. To become an electronics distributor, you will need to analyze and understand your competitors, current trends and the most preferred distributors. You will need to choose the products that you will distribute, devise distribution and marketing strategy and determine how to differentiate your business.

Complete a marketing study. You will need to have a complete understanding of the market and economic forces that drive the consumer electronics industry and hence your business. Though you do not have experience, knowledge can take you to your peak levels. You will need to know a great deal regarding electronics such as video games, cell phones and other gadgets. Get an industry report from marketresearch.com ($250 as of September 2010) or collect the latest news and trends from Wired or gizmodo.com.

Compose a business plan incorporating the business and competitor overview, your mission and vision, your marketing and distribution plan, your funding alternatives, financial projections, contracts or agreements, and your products and services. Check out the available alternatives to obtain funds in your locality. You can approach banks, credit unions or independent investors.

Establish a type of distribution. Decide whether you will take up the position of wholesale or retail distributor after analyzing the mode of distribution of your chosen electronics. The profit margins may vary between a wholesale and retail distributor. But there are advantages and disadvantages to both dealerships. Choose the one that appeals to you the most.

Make a list of the manufacturers or brand of electronics that you wish to distribute. You can choose a single brand or multiple brands for each electronic product. Contact the manufacturers or suppliers of the chosen products. Ask about their prices and agreements or contracts. Compare and choose the best one. Check on factors such as packaging, transportation costs, delivery promptness, brand name, brand image or quality to compare.

Create a strategy to differentiate yourself. You can differentiate based on good customer service both during sale and after sale, low prices, good product quality, good offers and discounts.

Set up a good location. Your location should allow you to reach the manufacturers or suppliers as well as your potential clients easily and with lower costs.

Obtain the necessary business licenses and register your business. You will need to obtain a seller’s permit in most states. Check with your county courthouse for permits and licenses, and submit business registration to your secretary of state.

Purchase the necessary inventory and vehicles for transportation. Hire staff, if necessary. Obtain insurance to cover all the electronic items. Also, get workers' compensation insurance.

Market your products by distributing business cards and fliers; placing ads in local newspapers, phone directories and yellow pages; and developing online marketing. Contact electronics distribution outlets such as small electronic stores and large retailers such as Wal-Mart and Best Buy.

Tip

You also can start a click-and-mortar business, which is an online storefront for distributing your products. An online shop can lower your operating costs, but the competition is more fierce.

About the Author

Alexander Cequea has been writing since 2008. He is an activist, speaker and film producer whose work has been featured in "Enlightennext Magazine" and the Environmental News Network. Cequea is currently producing a documentary about sustainability and consciousness. He has a Master of Business Administration in sustainable business from Maharashi University.

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