To be a successful distributor in the FMCG industry, you have to first understand the distribution game to be able to come out on top and attain the kind of success your contemporaries have. Taking up distributorship is a bankable business as long as you have certain tips at your fingertips and observe the rules of the game. It is therefore in your best interest to have sufficient information and basic ‘secrets’ before you launch your distribution business.


Study the following tips carefully before you set out to launch your distribution business.


#1.  Invest in an efficient warehouse

As you start planning for your distribution business; prepare sufficient investments to acquire a sturdy and efficient warehousing system. Don’t make the mistake of launching head-on without paying attention to every detail concerning your warehousing system. The size of the warehouse should be sufficiently large and well equipped to stock the kind of products you want to trade in. Besides being cool and dry, the warehouse should be safe from termites and rodents so your goods are safe until they get to your customers.


#2.  Seek out trustworthy manufacturers and dealers

The FMCG sector is pretty saturated with a whole lot of newbies creeping in everyday. While this is good for the industry, you have to be careful before you choose a product manufacturer to partner with. To become a successful distributor, you have to get agreements into place so that the manufacturers sell their products to you at a particular price for a given period of time. This price should allow you to maintain a sizable profit before the products finally reach retail stores.


#3.  Install a robust inventory system

Before you start your distribution business, try to see if you can access a robust inventory software or any resource that can be useful to keep detailed records of products coming into your warehouse and leaving the premises. With an inventory system that tracks every commodity with number and perhaps a bar code, there will not be any chance of pilfering or theft.


#4.  Marketing your business

Once you have decided to start a distribution business, market it around the neighborhood business circles with online and offline marketing media like magazines and business directories. Find out if there is a local distribution association you can join and become an active member. Take tips from them about how to manage your business. You need to understand the economics of distribution and price margins before you even set out to become a distributor.


#5.  Seek out reliable business partners

While setting up your distribution network, develop long-term business relationships with reliable partners you can work in a profitable manner and grow gradually from a local or regional distributor to maybe a distributor with nationwide operations.


#6.  Dependable transportation

Make sure that you factor in a dependable transportation system during the planning phase of your business. By selecting a reliable transporter for your distribution business, you can be free of regular delivery issues which most distributors with poor transportation system face.


#7.  Effective cost and distribution management

Some of the common reasons most distribution businesses are hard to manage is the rising costs of storage, transportation and delivery. Start planning ahead on how to effectively manage costs and distribution margins. Besides determining costs of operations and profits, you will have to factor in unrelated problems like natural calamities, political strife, riots, inflation etc which are unpredictable but can seriously erode the profits of your distribution business, so take note .


#8.  Managing customer complaints

Customer complaints can become business nightmares and potential areas of lost revenues if not effectively dealt with

As you consider setting up your distribution business, or perhaps you’re already running one, pay attention to customer service. Do your possible best to minimize customer issues with your products.


#9.  Offer special discounts to new buyers

A one-time discount for new customers can be an effective way to attract new business, whether the customer is a sub distributor or a retailer, if they like your services enough, they’ll keep coming back, with or without a discount.


#10.  Offer incentives for referrals

Your buyers have their own network, and distribution business is solely a game of numbers. Leverage them by offering a reward for quality referrals so you can easily tap into these wholesale connections. It’s all about who you know. And chances are your customers already know a lot of other potential buyers. Leverage this to build up your customer base. Establish an incentive-based referral system for your business; this way, your customers know they get some kind of percentage for bringing you quality customers.


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