The Definitive Guide To Beginning Your Distribution Business
The most critical aspect of becoming a distributor is figuring out beyond all self-doubt what kind of a distributor you intend to be and then choosing the channels of distribution that you would like to work within. This means introspecting how closely you want to work with the end consumer and how are you planning to accomplish the delivery of the finished product to the end user. Here are a couple of things to note and abide by, before beginning your business as a clothing distributor.
Plan Well Ahead
Even within the all-encompassing garment industry, there are a lot of market segments and you need to find the segment most suited to your interests because catering to all segments in a hyper-competitive, forever-changing industry, can be very challenging for a distributor who is just beginning his or her operations. Explore different market segments and then decide what kind of clothing you would like to invest in, and whether you’d be fine with being one of the shirt wholesalers on the market for something else, better suited to your interests and business plans. Invest in products that have the highest scope of profitability after factoring in retail rates and overhead expenses.
Stick To The Basics
Stick to the basics integral to beginning any commercial enterprise and have a meticulously prepared business plan before officially going to business. The business plan will be inclusive of a distribution model, start-up costs, a well-defined strategy, and a blueprint for the distant and immediate future.
Obtain All Licenses
A distribution venture is just like any company being set up for commercial gain and you will need to get requisite licenses and clearances from all the relevant statutory bodies before you can begin your business officially. The clearances will differ according to different geographical locations so you check that have all licenses and permits, to begin a fully legitimate business venture.
Build Relationships
Relationships are very integral to the success of a distribution business. You need to partner up with suppliers so that you can build a long-term relationship growing forward because, without a mutually respecting and benefiting relationship with them, it will be difficult to get a distribution business off the ground, let alone sustain or expand it. Your dependence on the suppliers won’t be a one-off thing, so always have the future in mind before striking a deal. Contact multiple manufacturers about their wholesale rates and select the one that promises the best rates but don’t proceed solely with a savings consideration, as it will brutally backfire since reputation matters a lot in this business. Enter into business only with manufacturers who have a proven track record of delivering on time, along with a decent reputation in the market. Sourcing quality and distributing quality is the only way to become a distributor and remain one!
Optimize Inventory
Knowing where you will store your inventory is the most crucial aspect of a distribution channel. You need to plan well ahead and make the smartest decisions to the best of your ability because logistics can make or break a distribution venture. Your ability to succeed will depend solely on how effortlessly you can source your needs from your suppliers and how efficiently you can deliver them to the retailers. This is DISTRIBUTION 101, and you just can’t afford to err in this aspect.
Play To Your Strengths
Beginning a distribution business will require a lot of time and money, so you’re advised to play to your strengths and make a foray into this industry only after you are convinced to the best of your understanding, that you are indeed putting your best foot forward. This is a capital-intensive industry and it will require a lot of capital just to get the business off the ground, so you would do well for yourself to pick an industry that you feel you would do well in. Trying to begin a fresh distribution business after your first one went bust is not for everyone, unless of course, you have god-like patience, a Rambo-like never-say-die attitude and a never-ending supply of funds! You are ideally expected to have decent leadership and team-building skills along with a good enough understanding of the many crucial facets of beginning and sustaining a business like supply chain, finance and accounting, sales, and marketing.
