How to become a distributor? Who is the distributor in fact?

Faced in the media or advertising with the term "distributor", we can not always correctly understand its meaning. A distributor is a trader, but how and on what rights he conducts his activities 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 relationship between the distributor and the manufacturer is built on the natural desire in the current economic conditions for the exporter to expand the sales market of his goods abroad, while reducing his expenses to a minimum.

The official distributor-intermediary is helping him to realize these plans. By the way, this term borrowed from the English language means "distributor", "one who distributes the goods". The distributor arrives in this way: when purchasing goods for his own money from the manufacturer, he distributes it in the regions on his own behalf.

But, by the way, it often has a downside - the producer starts economically (and in connection with the conclusion of the contract of commission - legally) to depend on the extent to which this agent is conscientious, enterprising and, most importantly, whether he has the capabilities and the desire to provide profitable deals.

How to become a distributor

If a particular firm or company decides to acquire the status of a distributor, it first of all must formalize the corresponding contract (the so-called "sales contract"). He can have both exclusive (giving the right to the sale of goods only this company), and non-exclusive nature.

Naturally, entering into the named relations, the company in the rank of "official distributor" becomes not an ordinary reseller who acts as a wholesaler. She, as a rule, maintains long and close ties with the exporter and promotes and organizes the sale of his goods in a certain territory of the country, which is pre-assigned to it.

What you need to do to become a distributor

Answering the question about how to become an official distributor, we already mentioned the necessity of concluding a sales contract between the manufacturer and the vendor. But for this, at first the company should send an appeal to the selected company with a proposal for its implementation services.

In this appeal, as a rule, the sphere of activity of the company offering itself for the role of the distributor, its mobility, turnover, coverage, number of clients and opportunities is indicated. Considerable attention should be paid to the review of the market where the work will be carried out, as well as indicative information on the volumes of marketing of certain goods on it.

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

Competent establishment of contacts, as a rule, ends with business negotiations and signing of a distribution agreement.

The rights that the distributor has in the sales market

The exporter often gives the distributor an exclusive right to sell, and voluntarily leaves the market, not only not competing, but also in every way promoting the promotion of a particular 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 training of personnel and to post-sale maintenance of the goods.

For greater clarity in the relationship "distributor-producer" by the International Chamber of Commerce, a guide was issued to draft appropriate agreements. In it, among other things, some aspects of the activities of distributors are underlined:

• The producer loses the preferential position in the territory where the distributor works;
• The relations between them are concluded for a certain period of time;
• Cooperation can not be episodic;
• Communication between the manufacturer and the distributor takes a confidential nature, but the sale of finished products carries with it a restriction of the freedom of action of the distributor, in particular, this is expressed in abstaining from competition.

Features of the agreement concluded between the manufacturer and the distributor

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

Exclusivity in the contract can concern both the territory where the sales are made, and the names of goods or consumers. If there are no conditions of 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 contract is of an organizational nature. So, on the one hand, it is realized by the purchase by the distributor of contractual goods from the exporter, which is confirmed by separate purchase and sale agreements, and on the other hand - by selling them in the allotted territory of this product, which is also confirmed by the conclusion of separate sales contracts, but already with The consumer.

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

How the distributor's revenue is determined

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

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

Types of distribution activities

To date, there are several types of distribution activities:

• General distributor. They are considered an intermediary, which organizes regional sales of products of a firm through its own network and on its own.
• A distributor with warehouses. It performs the function of storing goods, concluding contracts for their delivery in the future, and also providing services in sorting and selecting assortment groups of goods.
• A distributor who does not have warehouses, as a rule, participates in transit deliveries.

As you see, deciding to become a distributor of the company, you should also decide on which intermediary is most advantageous for your firm or company.

Can an individual act as a distributor?

Along with companies or firms, individual people can also engage in distribution activities. All they need is an understanding of the state of the market for goods or services to which the manufacturer is targeting. So, for example, the distributors of cosmetics, having selected a suitable company for themselves, the quality of which they trust, having proved to it their competitiveness and signing a contract with it, begin to assess the market.

First of all, it is necessary to understand what kind of population will be interested in this cosmetics, and then you can find shops, including virtual ones, that are aimed at this stratum of the population. Having written out all the advantages of this type of goods, you need to prepare its catalog and offer to specified stores, explaining why it will be profitable to sell this particular makeup.

This advice, as you understand, applies to virtually all types of goods.

Distributor of food: features of this type of activity

However, choosing a sphere of activity, it is worth remembering about their capabilities. After all, if you do not need special conditions for storage of purchased cosmetics or its residues, then, for example, for those who decided to sell food, they are often needed.

We mean not only racks and storage tanks, but also refrigeration units. And this implies additional costs for their purchase, and then for electricity. After all, the food distributor 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 distributor

As you probably already saw, distribution activities are a good option on a wide scale - both in the form of working for yourself, and as a means of building large distribution networks or businesses with huge turnover. Everyone can find in it their own, depending on the goals and opportunities available.

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

So, try it, and you will succeed!