The Distributorship Business is a big industry that despite the large number of competitors and the segmented and competitive nature of the industry it still permits many profitable new participants to take a piece of the action. This business plan provides a roadmap with some planning and entrepreneurial steps in order to transform your idea into a successful distributorship business.
Distributorship Business Plan
The process in the industry start with manufacturers producing goods and retailers selling them to end users. But in between, there are a few key distributors that assist to move the products from manufacturer to marketplace. There are two types of distributors: retailers, who sell directly to consumers and merchants or wholesalers, who buy products from the manufacturer in large quantities, and take them to warehouses to finally sell them to companies that either want to resell the products to end users or use them in their own operations.
This section will provide orientation for making your business widely known within your are or market segment. Elements such as the type of distributor you are, the products that you offer, your target customers, shipping methods will be outlined in this section to determine your competitive advantages in order to help you gain a sizable market share.
Starting a distributorship business requires several key elements that will be described in this section. The distribution business operations plan involves selling products at a discount to retailers, who then mark up their purchase costs in an effort to profit when selling to final consumers. A distributor's initial steps include defining a customer base and locating reliable sources of goods (suppliers). The keystone of the distribution cycle is the flow of products from manufacturer to distributor to customer. As a distributor, your position on that supply chain will involve matching up the manufacturer and customer by obtaining high-quality products at a reasonable price and then selling them to the companies that need them. Therefore logistics and inventory will take a big part of your operations plan.
This area includes a research of potential customers and competitors to give you a comprehensive idea of what’s the landscape you are participating in. Through the distributorship business plan, you will find ways to reaffirm the value of the company to suppliers and customers by revealing a superior service offer, as well as the cost-saving efficiencies created by those services. This section will give you ideas to take your business to the market successfully.
The distributorship business is a service that usually works through B2B relationships, as. The entrepreneur must be able to understand its customer’s needs and learn how to serve them well. Every distributor relies on a pool of customers to sell its products and/or services to. In this regard, the business plan defines exactly who will be included in that pool, describing business strategies, defining your mission and tailoring your operations to meet the needs of your segment.
The promotional strategies of the distributorship business plan focus on offering services such as mail order and online channels, which are low-cost distribution channels and very convenient to customers. It also includes traditional advertising such as specialized magazines that matches your segments and ads placed on search engines on the internet.
The distributorship business plan shows in this section all the financial requirements to start the business and to keep it profitable and sustainable. It will help you identify the sources of revenues and potential operational expenses for the company, offering strategies to keep your business profitable and in line with your goals and expectations.
The main sources of revenues for a distributorship business are obviously the sale of products of which you have taken ownership. The business plan explains the steps and considerations in order to buy the products at a low price and then make a profit by tacking on a dollar amount that still makes the deal attractive to your customer.
The main expenses for a distributorship business plan will vary. This section will explain all the major expenses depending on the business, such as office rent, telephone bills, warehouse rent and expenses, and logistics costs (including transportation whether proprietary or external), among others.