How to Become a Parts Distributor

by Martin Muchira; Updated September 26, 2017
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A parts distributorship business is one of the easiest businesses to start. You don't need to be a manufacturer. You just get ready-made parts and sell them. A parts distributor acts as a link between the manufacturers and the retailers. At times he links the manufacturer directly with consumers. The channel of distribution and type of spare parts determines the success of a distributor. If a distributor sells the parts to retailers, the profit is high but the required capital is more.

Step 1

Identify potential customer needs. Conduct a thorough market research. Check whether the customers are satisfied with what is offered by other parts distributors. You can do this through a questionnaire or interviewing the customers directly. Know the type of customers to whom you will be distributing parts.

Step 2

Purchase the parts you want to distribute. This is determined by the customer needs, cost, availability and portability. You can trade in auto spare parts, computer parts, factory machine parts, electrical parts or hundreds of others.

Step 3

Draft a business plan to guide you. This will make it easy to manage the initial stages of the business. The business plan should contain the objectives, sources of capital, a marketing plan, organizational structure and a financial plan.

Step 4

Identify the manufacturer. The manufacturer should be reliable, convenient and offer a fair price. It is good to deal with a manufacturer who advertises the product directly to consumers. This helps you penetrate the market easily because the product is already known.

Step 5

Apply for the necessary legal documents. A parts distribution business requires a license or certificate of operation. It also requires an insurance cover against risks such as fire. If you are dealing with electronic parts and machines, you must get and keep all the relevant documents accompanying the parts from the manufactures.

Step 6

Build a rapport with manufacturers and customers to build a strong business foundation which can withstand competition forces. Offer quality products to build customer confidence. Learn industry terminology.

Step 7

Advertise the business. This helps you win customers by opening ways to new markets and boost sales. You can advertise in community halls in your area, in magazines related to the parts you are selling, on the Internet, through direct mailing and in newspapers.

Warnings

  • Get the demographic details and economic status of your target market from the Bureau of Labor Statistics or online to help you in market research.

About the Author

Martin Muchira has been writing content for online businesses since 2008. He has written content for major companies like Air Asia and Comcast. Muchira graduated at the top of his class from Moi University with a Bachelor of Science in wood science and industrial processes.

Photo Credits

  • electronic parts image by Pavel Losevsky from Fotolia.com