Distributors broker relationships between a buyer and companies providing products and services. This is a broad definition that can be refined according to what industry and type of items the distributor is brokering. Some products and services may be designed for the general public and others may require a business-to-business transaction. There is not a uniform process for becoming a distributor for a company. However, there are some general steps that can be used by anyone wanting to become a distributor.
Establish a distributor business. A company will need proof that you are a legal business and have the capacity and experience to distribute their products. Some companies may request a copy of your business license, federal identification number, resale tax certificate and proof of a warehouse, showroom or storefront. Contact your state and local government licensing and tax agencies to discover more about what is required to establish a business in your state (see Resources).
Research the company's requirements for distributors. Most businesses offer detailed information on their websites about becoming a dealer or distributor for them. Others may simply offer an email address to use for inquiries about becoming a distributor. Some may require an exclusive distributorship, meaning you can only sell their products, while other companies may allow your business to sell their products alongside similar items.
Return a completed distributor application. Each company will have its own process and required paperwork for applying. Some companies may request that you receive proprietary training at their location before selling their products. Other companies may require you to purchase a sample kit and sales materials along with a completed application form.
Get to know the company and your point of contact. Develop a working relationship, learn the company's purchasing process and how returns and unsold product are handled. Take the initiative to connect with the company and stay informed about delays and manufacturing problems the company may be experiencing.
Build your distribution business. Access to deeper discounts and a larger inventory are usually based upon the amount of revenue a distributor generates. Use local, regional and national conferences and events focused on the types of products you sell in order to find potential buyers. Build credibility by referencing company certifications, training and awards on business cards, websites and in advertising.
Read about the industry you distribute products for. Taking time to stay informed about regulations and economic twists and turns can help you build a strong distribution business. Look to industry associations and organizations involved in legislation to stay up-to-date. For instance, the EPA is now enforcing a regulation requiring renovation, repair and paint contractors to follow certain rules when cutting, sanding or otherwise disturbing lead paint. Part of those rules require the wearing of respirators during renovations. Distributors selling products to general contractors could lose out on the revenue generated by the sale of respirators if they do not know about the regulation and increase their inventory (see Reference 3).
Be aware that you may be asked to sign confidentiality, exclusive rights and other legal agreements. Protect your rights by asking a lawyer to review the documents before you sign.
- “The Fundamentals of Business-to-Business Sales and Marketing”; John M. Coe; 2004
- “The Complete Idiot's Guide to Starting Your Own Business"; Edward Paulson; 2007
- EPA: Steps to Lead Safe Renovation, Repair and Painting
- Todd Warnock/Digital Vision/Getty Images