Start a Distribution Business

Start a Distribution Business

Getting into product distribution means entering a big industry. For example, there are roughly 300,000 distributors in the United States that produce a combined $3.2 trillion in annual revenue. Despite this large number of participants, the fragmented and competitive nature of the industry allows for plenty of profitable new entrants.1 With some planning and entrepreneurial spirit, you too can be on your way to owning a successful distribution business.

Creating a Business Strategy Decide what type of distribution business you will run.

Distributors can be split into two categories based upon who they serve. First, retail distributors buy from wholesalers or manufacturers and sell products directly to consumers end-users. In contrast, wholesale merchant distributors buy from manufacturers and resell the products to retailers or other distributors. Which one is right for your business will depend on your goals and experience. Decide what you would like to distribute.

You could focus on a specific product or offer a variety of items. Your decision could be based on a passion or on a product that is hard to find in your own personal experience. While many large companies are served by equally large distributors, these distributors are unwilling or unable to serve smaller, more specialized business. A good idea, especially in a crowded market like beverage distribution, might be to provide niche products to these specialized retailers. Put together a business plan that lays out the full vision of your new distribution business.

A business plan allows you to follow a direction for making your business a success. This plan will included the type of distributor you will be, the products you plan to offer at least initially, the name of your company, your target customer base, shipping method, and a general strategy. This strategy can be as simple as focusing on fast and effective service, or more complicated, s Getting into product distribution means entering a big industry. For example, there are roughly 300,000 distributors in the United States that produce a combined $3.2 trillion in annual revenue. Despite this large number of participants, the fragmented and competitive nature of the industry allows for plenty of profitable new entrants.1 With some planning and entrepreneurial spirit, you too can be on your way to owning a successful distribution business.

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-------------------------References---------------------
entrepreneur.com/article/190460---entrepreneur.com/article/190460


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