As a product’s supply increases in any developing market, the need for more distribution channels also rises exponentially. Whether it is a craft, organic food, pharmaceutical, or textile product, a team of distributors works actively to find the most reputable companies and helping them bring suitable products to shops at their store.
Also, product distributors have a good understanding of the market and how to work with manufacturers and retailers, making this business more profitable.
This is why more and more people are now planning to open this small distribution business by performing MSME registration online to start a distribution agency.
Table of Contents
How to be a distributor in India?
Mentioned hereunder are some steps you can follow to become a distributor in India.
Incorporate your company
Any innovative business idea must be registered as sole ownership (sole proprietorship), single-person company (one-person corporation), or a private limited firm. Get the GST registration done for your company so you can transact across states and cities.
A GST number is required to create tax invoices and help you account for the expenses and revenues. Also, as a distributor, keep in mind that there are several ways to market products.
Hence, when negotiating with a client, you must include all the potential ideas in your business proposal.
Select your product
Make sure you know about your industry and the products you’ll be selling. Select FMCG, Medicines or Textiles or Furniture or Dairy Products to see what catches your attention. Here, your supplier’s business plan is firmly in place.
Choose only products that are in short supply, prevalent in your market, and that you can move quickly to sell. Slow and non-moving goods will take longer to pay off. Help is available from distributors as well as consumers who can identify the requirements of a specific product.
Set up your online profile
Once your profile is complete, you’ll need to pitch a company for distribution. Things like your location, professional experience, finance sources, vehicle, area you own, labour, etc., can help you and your business stand out.
In addition, what are their current pain points and problems, and how can you help them overcome them by selling their goods quickly and getting the ROI. You can increase the chances of getting a response by tailoring each proposal to the company.
Pitch the business
It is possible to pitch companies with numerous entrepreneurial ventures by sending a proposition and how your business plan can benefit them. Before becoming a business partner, you must read all the directions, such as investment requirements, ROI period, added expenses, benefits to distributors, etc.
Focus on fixing their problem because MNCs love small-scale business ideas that help them reach market opportunities and establish their brand.
Make a web network for yourself
So, you’ve finally decided on the best business to start. After you’ve pitched a company, signed a contract, and received the products, you’ll need a robust network to sell them. Connect with various retailers, wholesalers, customers, and so on, and demonstrate how you can help them.
For example, when you plan to start a dairy distribution service, you must associate with a Dairy, Bakery, and Kirana Store owner and build a positive relationship to obtain repeated orders.
These are the people who will place orders with you and help you expand your distributor business in your area.
Choose a warehouse
If you’re having trouble deciding where to store your belongings, we suggest starting with your own home. In the beginning, you may have an empty storage facility or a corner space in your home to store these items.
And, if you plan to keep a large number of units, you will need a rented warehouse and a significant distribution network to market the perishable goods quickly.
Prepare your business strategy
Prepare a distribution plan that includes details, such as product price fluctuations, stock levels, delivery costs, employee salaries, attendance, GST, products you want to trade, and software costs.
You must be ready with a business strategy and a plan to manage the overall costs to make the business profitable.
You can also choose to seek help from a planning company that will help you by assisting in keeping track of everything from stock prices to employee salaries, participation to GST, and taxes to net income.
Make a credit policy for yourself
Set a debt capacity for each distributor, and only release the subsequent delivery of the goods once you receive the pending payment. As you may be aware, the distributor business is entirely reliant on cash flow; you will only be able to survive if you have revenues in your pocket.
Hence, it is advisable that distributors have a solid credit policy to sustain this business model and that the retailer signs it while negotiating terms.
Make use of technology
You may not require it right now, but you will need to computerise your business or risk failing to provide quality services to your retail partners once your business has grown. You may be a small company, but you should concentrate on solving large-scale issues.
Having an expert research team behind you can help control stock and supply-chain management. You can also let them take charge of various operations so you can focus on growing the business.
The best business ideas do not appear anywhere. You must go out and conduct market research. To see those green signals in the future, you must invest a great deal of effort, time, and money into small lucrative business ideas as the fruits cannot get obtained without planting the seeds and watering them daily.
Also, always try to maintain a personal relationship with your dealers and retailers and talk to them about their company and what else you can do to help them grow their revenue.
This way, you can have better associations and retain those dealers and retailers for an extended time.
Are you looking for a loan for MSME to start your distribution agency in India? ZipLoan can be your perfect partner.
We are one of India’s leading NBFC and can help you receive an instant business loan at an economical interest rate to help fulfill your dream of becoming a distributor. To know more, contact us at 011 – 4310 – 9577.
Frequently Asked Questions
A distributor can become an invaluable business partner to manufacturers that want to know what consumers are thinking, and to retailers that want to have inside information on new product releases.
Starting a distribution business is a profitable affair. It is one of the easiest ways to become businessmen with less overhead compared to manufacturing business.
One of the best ways to become a distributor without an investment is through a direct sales company. Direct sales companies recruit sales representatives to sell products or services through party plans, at flea markets or directly to businesses.
You need a business license to operate legally in your state, and companies may ask you for proof of your business license or resale tax certificate. Research the industry you wish to enter and learn about the products offered. Apply to the manufacturer to become an independent distributor.
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