When we have the entrepreneurial spirit and in our head the idea of creating a company, we do it perhaps because of the desire to fulfill a dream, for a market opportunity, or simply the desire to have a higher income; sometimes based on experience in a market or simply the desire to fulfill that long-awaited dream.
To have a company it is not enough just to be a good entrepreneur, or a good businessman with great administrative, leadership, marketing and knowledge of a target market, when you think of being your own boss and start a distribution company you have to take several items into account In this case I will mention five, in no order of importance since they are all very important and should not be missed when analyzing our new distribution company:
1. Type of products to distribute
When we think about distributing we must take into account what type of products we are going to offer, it is not the same to distribute pencils as oranges, that is, we must think about whether they are perishable products or not, if they have an expiration date or not, since it is very important at the time of make the purchase of these products to distribute, not buy or deliver products with a short expiration period, but, there is a risk that soon they will be returning that product to us if it has not been specified before that the sale is made under a promotion by expiration date producing losses for returns.
2. Place or area to distribute
We must be clear about which area or in which areas our clients are, our target market, if it is a small area, within the same city or if, on the contrary, we must travel several kilometers to reach our clients.
3. Transportation
Based on the previous item, the "place or area to be distributed", the freight or transport marks an important percentage in the costs within the financial analysis of the company, in this it must be very clear if you plan to manage as a true distribution company or It would simply be handled very rudimentary with saving money, such as shipping with the same providers (which they can sometimes support), which for me is not ideal due to the risk that is incurred by unforeseen events at the time of dispatch, this issue could expand later on another topic to discuss.
4. Negotiation with suppliers
All items mentioned in this article are very important, however, this item I think is the one that sets the tone if it really is worth starting a distribution company, whether or not, many production companies or manufacturers do not have a distribution channel and They want to start operations in a certain area for which they require companies that know the area, the clientele, that already have a covered market, but if there is no clear negotiation, loyalty and respect in the negotiation, in a short time when the products are recognized, the supplier will be able or will try to continue its sales directly to the clients that the distributor is already working on, therefore it is extremely important to be clear about clear policies at the time of negotiation,Although currently there is little business with exclusivity, it would be very good to be able to carry it out, to avoid the aforementioned
5. Commercial policies with suppliers
When you have a distribution you can buy cash or on credit depending on the marketing policies of our supplier and our purchasing capacity, for which we must take into account in the commercial policies when selling, if we buy cash we must sell contact, if you do not have a good profit margin and excellent financial muscle, to be able to finance clients when they are not sold in cash but on credit, obviously at great risk of the money put in the clients; if instead you buy on credit and sell on credit,The ideal is to seek that the time of return of the money when distributing is less than the time that the providers should be canceled, otherwise we would be financing the clients again and running the risk that our portfolio has a longer time than we must cancel our suppliers, and perhaps in a short time to be in the hands of customers, suppliers, and banks looking for loans to finance our customers.
