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Showing posts from April, 2020

How To Start Distribution Business With Limited Capital

Every week, I receive many mails and tel calls from enterprising youth, experienced businessmen, retired professionals with vast domain knowledge - inquiring how to enter distribution trade. They are enthusiastic entrepreneurs - want to start a new business or expand existing one - with limited capital. For newcomers, its always better to start a business in service than manufacturing as the later may demand larger investment in terms of money, effort and other resources. This article describes what's necessary to start a distribution business with modest capital.

The first and most vital requirement of a distributor is to have a downstream retail chain where he/she can sell the merchandise. Essentially, distributor is a middleman - a re-seller. He/she has to resell the products coming from manufacturer to retailers. So, building a good relationship with retailers in the region is the starting point in the life of a distributor.

Developing this ability does not require financial…

How Distributors Add Value In Manufacturing - Few Hidden Facts

We all know distributors help manufacturers by re-selling products. But there are many other ways a distributor adds values in manufacturing process that need to be understood. Its true, distribution channel costs money - sometimes as high as 40% to 50% of MRP. But a properly aligned distribution  channel also adds enormous value through tangible and intangible ways. Knowing these facts can help manufacturers make optimum use of their distribution channels. This article describes some known and some not-so-known facts about how distribution channel adds value in manufacturing.
1.  Bulk Breaking Companies produce in lots, but consumers buy in single piece. So, we have retailers who buy in moderate quantity and sell in single units. However, the nature of manufacturing is such that, its     completely uneconomic for even a small or medium sized company to sell to retailers. Distributors break manufacturing  lot into pieces or dozens or whatever units the retailers wants them in. Its a …