How to Become a Distributor in India? [A Complete Guide]

Are you planning to start a distributor business in India but don’t know how to start? Then don’t worry, this article will guide you on how to get a distributorship.

But before you start, get familiar with these terms like distributor, wholesaler, manufacturer, etc.

Distributor: A distributor works as an agent between the manufacturer and the retailer by working as a supplier.

Wholesaler: A wholesaler is the second person who purchases directly from the manufacturer and sells it directly to consumers.

Manufacturer: A manufacturer is a person who produces the goods on a very large scale and sells them to either wholesaler or distributor.

Firstly, write down all the distributor business ideas you have. Remember the above-discussed terms and the below discussed steps and important points that will help you start your distributor business within a week.

Now, let’s move on to how to start your distributor business in India:

1. Register your business.

If you believe you have a unique business idea, you must acknowledge it as a sole proprietorship, a one-person corporation, or a private limited company.

Get your business GST number for doing transactions across the states and in between the city. GST number is necessary for creating tax invoices that will help you account for your expenditure, profits, etc.

Also, remember, there are various ways you can sell products as a distributor. So you must identify it under your business proposal while negotiating with a client.

2. Choose your Product.

Research your industry and the products that you are going to sell. You can choose from FMCG, Medicines, Textiles, Furniture, Dairy Product, etc., and see what interests you.

See, can your products fulfil the market gap? If yes, then go for it.

This step solidifies your distributor business plan. Choose only goods that are in short supply, hot in your market, and move quickly. These will help you get your return on investment faster than slow and non-moving goods.

You can also talk to other distributors, retailers, and consumers for help and identify the demand for a specific product.

3. Build your profile.

Now, it’s time to need to build your profile before you pitch a company for distributorship. Add things like your location, work experience, Finance Sources, Vehicle, space you own, labour, etc., to show a powerful presence for you and your business.

In between, highlight their pain points and problems now, and state how you can help them solve them by selling their products fast and getting the ROI?

Make every proposal different for every company to increase your chances of getting a response.

4. Pitch the company.

If you have multiple new business ideas, you can pitch companies by sending them a proposal and how your business plan can help them.

You must read all the instructions like investment required ROI period, additional costs, benefits to distributors, etc., before joining them as a business partner. MNCs love small business ideas that help them reach newer markets and build their brand, so focus on solving their problem.

Hint: If you lack pitching in an email or a call, we suggest you go through some sales skills videos, tips, and tricks, to avoid getting rejected in the first round.

5. Create your web network.

Okay, so now you’ve zeroed on the best business to start. Next, after you pitch a company, sign the contract, and get the products, you need a good network to sell those products. So, connect with different retailers, wholesalers, consumers, etc., and show them how you can benefit them.

Let’s, take an example: Assume that you are a distributor of Amul Milk. Then whom will you pitch?

It's simple, you have to connect with a Dairy, Bakery, and Kirana Store and maintain a good relationship with them to get recurring orders. These are your target audience, who will take orders from and will help you grow your distributor business in your locality.

6. Decide the warehouse.

If you are having trouble deciding where to store your goods, we actually recommend you start with your own house. There might be an empty storeroom or a corner space in your house to store these items in the initial days.

And, if you are planning to keep tons of units, you need a rented warehouse and an extensive distribution network to sell the consumable items fast.

7. Have your business plan ready.

Make your distribution business plan ready and include relevant points like product fluctuating cost, stocks, delivery expense, employee salary, attendance, GST, products you want to import, and software cost.

You have to manage your overall expense to make this small business profitable, and hence, we are here to help you grow your business. We assist you in tracking everything from stocks to employee salaries, Attendance to GST, and taxes to gross margin.

Connect with us and clear all your doubts related to accounts and commerce.

8. Create your credit policy.

Sometimes retailers often neglect to pay advance to the distributors and to solve this, set a credit limit for each distributor, and release the following delivery of the product only after you receive the earlier payment.

As you know, the distributor business completely depends on the cash flow, you’ll only survive when you have the profits in your pocket. So, we highly recommended a credit policy for distributors to sustain this business idea and ask the retailer to sign it while negotiating a deal.  

9. Use the technology.

You may not need it right now, but you need to automate your business or lack in providing quality services to your retail partners after the initial boost in your business. You might be a small scale business, but you should focus on solving large scale problems.

So have a strong data team in the backend to manage the inventory and supply chain management, and as we said, you can have us at your back to control these operations, and you can think freely on further expanding your business.

Conclusion

This sums up our article, how to start your distribution business in India. And the things you must know while getting a distributorship.

Best business ideas don’t just come up suddenly. You have to go out and research the market. For small profitable business ideas to be successful, you need to invest a lot of effort, time, and money to see those green signals in the future.

One cannot have the fruits without sowing the seeds and watering them daily.

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FAQs

Q. Is the distributorship business profitable?

Ans. Yes, it is lucrative — especially if you're introducing a new product to your retailer or selling it quickly. You can even sell the FMCG products, as they come under user daily needs.

Q. I needed how much investment to start a distributor business?

Ans. You can start a distributor business with min. Investment of 25000 rupees and also calculate the light bills, rent, etc.

Q. Our distributor and franchise businesses the same?

Ans. No, in distributorship, you take the products, add your margin and then sell to the retailers, while in the franchise business, you have to work according to the franchisor rules and regulations.

Q. Which products should I choose while selecting categories?

Ans. It ultimately depends on your interest in the product. For example, you can become a medicine distributor if you have an understanding of drugs and chemicals.