3 Things You Should Know About A Distribution Business

Sneha Santra
Sneha Santra Jul 27 2019 - 4 min read
3 Things You Should Know About A Distribution Business
If you are interested in becoming a distributor of any company, there are few things you should know first.

When people think of business, all they can think about is starting their own business or franchise. But, what if we tell you there is another business opportunity which is one of the oldest & profitable businesses in India – Distributorship!

A distribution company is possibly the oldest known form of doing business, and have been done to death. The business dates back to the times where items and goods were bartered across cities and kingdoms, yes that’s how old distribution business is!

However, even in this digital era, the distribution business holds as much relevance as any other modern businesses. Millennials are more inclined towards something new & exciting concept in the business world such as franchising. But the distribution industry, despite being one of the oldest business concepts, is coming forward with technological revamp.

In fact, distribution is one of the most important elements in the business chain as most of the manufactured goods through the distributor before reaching to retailers/consumers. So, if you are interested in becoming a distributor of any goods, there are few things you should know first which are listed below.

#1 Role of Distributors

While a product is manufactured at one place, but customers are scattered over a wide geographical area, making it difficult for a producer to distribute his products all over the country. That’s where distributors come in.

Distributors, also known as a stockist, are basically someone who makes a partnership with the manufacturer, purchases products, stores them & sell them through a distribution channel. They are the connecting link between manufacturers and retailers or consumers. One of the key responsibilities of a distributor is of moving the products. The right distributor enhances a company’s exposure in the product market and can give an edge in terms of speed and efficiency.

#2 Distribution channels

The channel of distribution refers to the flow of business that occurs between manufacturer and consumers. They help to cover a vast geographical area and also bring efficiency in distribution and retailers, wholesalers are the common channels of distribution. There are basically four levels of distribution channel illustrated below:

- Zero Level:

- One Level:

- Second Level:

- Third Level:

# 3 Basic requirements

If you have plans about starting a distributorship business, then you must be wondering about the requirements to become a distributor of any company. Below is the list of few basics things you will require to start as a distributor.

  • Storage

Distributors are also known as a stockist because they stock products from the manufacturer to later distribute it to consumers via the distribution channel. Thus, the basic requirement for becoming a distributor is Storage space. The size and location of the storage space are of utmost importance. Unlike a retail or franchise store, you don’t require to have your storage area in a place of high visibility or high footfall. You would just require a decent location with a space requirement depending upon the product. The place can be anything from a warehouse to a garage or even a rented space.

  • Transportation

A reliable method of distribution is another pre-requisite for distributors in India. There are various modes of distribution, you can either opt for buying your own fleet of vans & trucks or hire someone, depending upon the type of business & budget.

  • Licenses

One of the most important things you will require to start as a distributor is getting licenses. The licensing requirements for a wholesale distribution business vary upon the local laws and the type of products you’re selling. It's important to research those licensing and permitting requirements thoroughly before you begin operations as a distributor.

So, if you are interested in becoming a distributor and want to know more about how to become a distributor, then watch this space for more information.  

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