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How to Become a Distributor of Merchandise

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A distributor of merchandise serves two clients: the manufacturer and the merchandise buyer. The manufacturer wants a sharp distributor who brings in reliable orders that pay on time, and the buyer wants a distributor who runs a responsible business that provides market trend information, trustworthy product information and reliable order delivery. If you want to become a successful merchandise distributor, your ability to remain calm and organized under pressure will become your greatest asset. Strong success factors also include good communication skills and an ability to anticipate your clients' needs.

Decide what types of products you want to distribute. Cultivate experience in your chosen industry before trying to break in as an independent product distributor.

Contact the industry trade association for advice on how to structure, launch and grow your distribution business. Call the main office and start asking questions. The association is in the of assisting new companies in its industry and can often be an excellent source of key introductions to mentors and manufacturers.

Write your business plan detailing how you will choose products to distribute, acquire manufacturing clients, promote your product line to buyers and differentiate your company from the competition.

Research your costs and potential revenues by calling or visiting the manufacturers of the products you wish to represent. Obtain their pricing information, and ask them for guidance on the manufacturer's suggested retail price (MSRP) for the item(s) you wish to sell and where you might find buyers. Many manufacturers are aware of distributors who have had arguments with certain buyers or who are considering selling their distribution business to an enthusiastic new entrepreneur.

Determine how much inventory you will need to carry and find appropriate storage facilities. Many manufacturers will ship directly, eliminating any need for you to supply warehousing.

File your incorporation papers, obtain required business licenses and permits, and buy business insurance. Though your manufacturers will supply you with catalogs and other marketing materials, develop your own marketing materials such as business cards, brochures and price lists nevertheless. Many distributors offer specially priced packages of goods for business promotion; make this type of marketing part of your marketing plan and brochure design.

Tip

Ask your buyer prospects what you can do as a distributor to make their jobs easier. Most buyers are happy to tell you what they need in terms of merchandise, when to call, and any financing or delivery requirements they would like you to observe.

Use a sales contact management computer program that can sync with your mobile phone. You should plan to spend much of your time visiting your buyers and having calendar and contact information readily available may make the difference between a big sale and a big disappointment.

Warning

Failure to deliver goods on time and in excellent condition can destroy any budding business relationship. Always monitor the progress of product manufacturing and order fulfillment to ensure that your buyers feel they can count on you to perform when they can't always trust other distributors. Although buyers always place considerable weight on price, they tend to value distributor reliability even more.

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About the Author

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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