Distributors make a partnership with the manufacturer who supplies a product. Generally, distributors buy the products at wholesale price and sell at retail price to the customer. A key responsibility of distributor is of moving the products. If you have distributorship business plans and looking for distributorship opportunities then have a look on the requirements to become a distributor.
Storage
Storage space a basic requirement for a distribution. The size and location of the storage area is important. Whenever the distributor will receive products from manufacturer, he will need space to store it. The place can be anything from a warehouse to a garage or even a rented space. It depends on you.
Transportation
A reliable method of distribution is another pre-requisite for distributors in India. Some distributors choose to buy their own delivery vans or trucks, while some hire a courier service. Buying a truck means hiring a driver depending on the business type and hiring a courier service means experienced staff at your service.
Customers
The distribution business is based on the relationship with customers. Distributors in India need strong negotiating and sales skills for maintaining good working relation with customers. A distributor’s focus is buy the product at the lowest price and sell it in profit. To create a healthy business relationship with the clients, distributors need to set a price which the customer finds reasonable.
Contract
Distributors have to sign an agreement specifying terms and conditions between distributor and manufacturer. A distributor can discuss with the manufacturers if he wants to add, edit or delete any clause. Spell out specifics about all pricing and terms.
Licensing
Distributors must get the required licenses like federal tax identification, state resale license for operating their business legally. The federal tax number application comes from the IRS and for the resale license; distributor can apply at their local country clerk’s office.
Application
Some manufacturers give an application form to distributors to fill out. Generally, in these forms the distributor has to fill his general info and knowledge of the business and products. As manufacturers don’t provide customers, they ask if the distributor has already established clientele.
So, start working on the above things to become distributor in India. For Distributorship Opportunities, feel free to contact Businesssaathi. We help prospective distributors find the right business opportunities.