How To Become A Distributor
About becoming a distributor and how to approach a supplier to establish a distribution business.
Factories think of distributors as a wholesaler or middleman engaged in the distribution of a category of goods primarily to retailers in a specific area. In other words, a distributor is someone who buys larger quantities and resells to retailers.
This page will take you through some important background information.
You may, however, be interested in looking at some specific distribution opportunities that you can review immediately. To do that, click on Business Opportunities.
In Depth On Becoming A Distributor
There can be different levels of distributors.
A Master Distributor may aggregate orders from Regional Distributors. This person is often a broker who does not maintain inventory. See Master Distributor.
Regional distributors warehouse product purchased either through a Master Distributor or factory direct and sell to retailers within their area.
To buy from a factory you must meet their order minimums. Some factories will not ship less than a container load, truck load or pallet of product. So regional distributors who do not wish to order this amount, will work through a Master Distributor.
Even if order minimums are less than a truck or container load, shipping costs, in spite of getting very low factory prices, may make the product to expensive for you to compete in your local market. In that case it might be best for you to work through a Master Distributor. And it might be most convenient to work through a local regional distributor who can provide you local service.
As a note, some factories have exclusive distribution arrangements in some parts of the world.
How To Approach A Factory To Distribute Their Products
First check the web to see who in your targeted sales region is offering wholesale prices on your targeted product. Use this information to determine your ability to compete. If you can, go to the next step.
Second, check the shipping costs from the factory to your location. That number will give you an indication of whether it will be profitable to deal factory direct.
Third, check if the factory has any exclusive distribution agreements, what the order minimums are and if they have any restrictions or guidelines for selling their products.
Submit a request for quotation for a specific load of product with the order complying with the factory order minimums and requirements.
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