The broadest definition of an independent distributor describes the distributor as a manager of the sales relationship between a buyer and a manufacturer. There’s no single process for becoming an independent distributor, but there are certain steps you should follow when you’re attempting to establish a relationship with a manufacturer.
Choose Industry, Product & Market
Choose an industry or product to sell, and decide who your customer will be. Independent distributors generally specialize in distributing products for an industry or a particular audience. For instance, independent distributors of paper products (paper towels, bathroom tissue, paper napkins) can focus on the general public or sell products to companies that sell to the general public.
Establish Business Legally
Companies hiring independent distributors need proof that you operate as a legal business. Some companies may ask you for a copy of your state or local business license, resale tax certificate or federal identification number. You may also need to prove you have a showroom or warehouse space from which to receive and distribute products. Contact your local government’s business licensing and regulations department to find out what you need to do to establish a business in your area.
Research Suppliers and Manufacturers
Find and research the companies with products you wish to distribute. Businesses need distributors and may offer information from their websites about becoming a distributor or dealer. Some may provide detailed information, and others may provide an email address for potential distributors to contact.
Companies wanting exclusive distributors require you to sell only their products. Other businesses may be comfortable with an independent distributor who sells many brands from a variety of manufacturers.
Complete Distributor Application
Apply as an independent distributor. Return the required materials and follow the manufacturer’s process for applying as a distributor. Some companies may want to meet you in person and tour your business. Others may require a financial statement and a letter of credit from your bank.
Taking a product training class from the manufacturer or the purchase of a sample kit and basic sales materials also may be required.
Develop Relationship with Supplier
Find out about company policies, and ask for a point of contact. Independent distributors are not employees of a manufacturer and can be left out of the loop when new products are introduced, training is implemented or changes are made to a manufacturing schedule or company policies. A point of contact can help you navigate the manufacturer’s business style and culture and keep you informed so you can better manage your customer’s experience.
Stay Up-To-Date With Industry
Stay informed about the industry. Build a stronger independent distribution business by staying informed about the manufacturers you work with and the industries they are affected by. Utilize organizations, associations and government agencies supporting an industry to stay informed. Many industry organizations provide email newsletters or website updates regarding pending legislation, market information or industry changes.