How to become a distributor? Who is a distributor really?

Faced with the term “distributor” in mass media or advertising, we cannot always figure out its meaning correctly. A distributor is a trader, but how and on what rights he conducts his activity is not clear to everyone. Let's try to figure out who it is, and at the same time how to become a distributor.

Why does the manufacturer need a distributor

The relations between the distributor and the manufacturer are built on the exporter’s natural desire in the current economic conditions to expand the market for their goods abroad, while minimizing their costs.

The official distributor - intermediary helps him to realize these plans. By the way, this term borrowed from English means "distributor", "the one who distributes the goods." A distributor does just that: when purchasing goods at his own expense from the manufacturer, he distributes it in the regions on his own behalf.

But, by the way, this often has a flip side - the manufacturer starts economically (and in connection with the conclusion of the contract of assignment - legally) to depend on how conscientious, entrepreneurial the agent is, and, most importantly, whether he has the ability and willingness to provide profitable deals.

How to become a distributor

If a particular company or company has decided to acquire the status of a distributor, it must first draw up an appropriate contract (the so-called “sales contract”). It can be both exclusive (giving the right to sell goods only by this company), and non-exclusive.

Naturally, entering into these relations, the company in the rank of “official distributor” becomes not an ordinary reseller who acts as a wholesaler. As a rule, it maintains long and close ties with the exporter and is engaged in the promotion and organization of the sale of its goods in a certain territory of the country, which is assigned to it in advance.

What you need to do to become a distributor

Answering the question of how to become an official distributor, we have already mentioned the need to conclude a sales contract between the manufacturer and the seller. But for this, first, an appeal should be sent to the selected company with a proposal of its implementation services.

This appeal, as a rule, indicates the scope of the company offering itself the role of distributor, its mobility, turnover, coverage area, number of customers and opportunities. Considerable attention should be paid to the review of the market where the work will be conducted, as well as indicative information on the volume of sales of certain goods on it.

The purpose of this appeal is to interest their future partners in the services offered, while showing their own awareness of the possibility of promoting the product and how to advertise it.

Competent networking usually ends with business negotiations and the signing of a distribution agreement.

Rights held by the distributor in the sales market

Most often, the exporter gives the distributor the exclusive right to sell, and he voluntarily leaves the market, not only not entering into competition, but also in every possible way promoting the promotion of a certain product and its advertising.

In addition to these privileges, the exclusive distributor receives from the exporter the right to use the trademark, the opportunity to organize staff training and after-sales technical maintenance of the goods.

For clarity, in the relationship “distributor-manufacturer”, the International Chamber of Commerce has issued guidance on the drafting of relevant agreements. It, among other things, emphasizes some aspects of the activities of distributors:

• the manufacturer loses a priority position in the territory where the distributor works;
• relations between them are concluded for a certain period of time;
• cooperation cannot be episodic;
• the relationship between the manufacturer and the distributor is trustworthy, but the sale of finished products carries with it a restriction of freedom of action for the distributor, in particular, this is expressed in abstaining from competition.

Features of the agreement between the manufacturer and the distributor

The exclusive distributor receives from the manufacturer the exclusive right to sell and place certain goods agreed upon in the contract on a clearly defined territory. He undertakes to purchase these goods only from the exporter, with whom he concludes an agreement.

Exclusivity in a contract may concern both the territory in which sales are made and the names of goods or consumers. If there are no conditions for exclusivity, then an unlimited number of distributors may appear on the contract territory.

Features of the legal nature of the distribution agreement

The legal nature of the distribution agreement is organizational in nature. So, on the one hand, it is realized by the distributor acquiring contractual goods from the exporter, which is confirmed by separate sales contracts, and on the other hand, by selling them the goods on the allotted territory, which is also confirmed by the conclusion of separate sales contracts, but already with by consumer.

Therefore, as you see, it is very important, before becoming a distributor of a company, that both sides of the transaction (exporter and distributor) have stable rules of interaction. They are agreed in the form of general conditions for the sale process, and all of them are contained in the distribution agreement.

How distributor income is determined

Before becoming a distributor, of course, you should decide on the amount of remuneration (in commercial practice it is called "commission"). It is calculated as the difference between the prices for the purchase and sale of goods.

And the right to receive commissions, methods for calculating them, the procedure and terms for their payment, as a rule, are determined by agreement of the parties.

Types of distribution activities

Today, several types of distribution activities are distinguished:

• General distributor. They consider him an intermediary who organizes regional sales of products of any company through his own network and on his own.
• Distributor having warehouses. It performs the function of storing goods, concluding contracts for their delivery in the future, as well as providing services in sorting and selecting assortment groups of goods.
• A distributor without a warehouse is usually involved in transit shipments.

As you can see, having decided to become a distributor of a company, you should also determine which intermediary is most profitable for your company or company.

Can an individual act as a distributor

Along with companies or firms, individuals can also engage in distribution activities. All they need for this is an understanding of the state of the market for goods or services that the manufacturing company is aiming at.

For example, cosmetics distributors, having selected a suitable company for themselves, the quality of the goods of which they trust, having proved their competitiveness and having signed an agreement with it, begin to evaluate the market.

First of all, you need to understand which category of the population will be interested in this cosmetics, and then you can find shops, including virtual ones, that are aimed at this segment of the population. Having written all the advantages of this type of product, you need to prepare its catalog and offer it to the indicated stores, explaining why it will be profitable for them to sell this particular cosmetic.

This advice, as you know, applies to almost all types of goods.

Food Distributor: Features of this activity

True, choosing a sphere of activity, it is worth remembering about your capabilities. After all, if special conditions are not required for the storage of purchased cosmetics or its residues, then, for example, for those who decide to sell food products, they are most often needed.

This includes not only shelving and storage tanks, but also refrigeration units. And this implies additional costs for their purchase, and then for the payment of electricity. After all, the distributor of food products must necessarily take care of the method and place of storage of the goods, otherwise it will lose its appearance, and the intermediary, respectively, the invested funds.

A few words about the profession of distributor

As you have probably already seen, distribution activity is a good option on a wide variety of scales, both in the form of self-employment and as a means of building large distribution networks or businesses with huge turnover. Everyone can find his own in it, depending on the goals and opportunities.

Earnings in this field of activity, regardless of who you are - a distributor of food, automobiles, hygiene products or computer equipment, depends only on your business skills, ability to promote a product on the market, prove its advantages and interest the buyer.

So try it and you will succeed!