Tips on Becoming a Product Distributor

Christine Harumi W.

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It’s estimated that there are over 300,000 product distributors in the United States alone.  However, even with the large number of existing distribution businesses out there, becoming a successful product distributor is still possible with some entrepreneurial ambition and strategic planning. 


Following are some of our top tips on how to become a product distributor and successfully launch your own product distribution business:



Tip 1 - How to Become a Product Distributor:  What Type of Product Distributor?


The first step to become a product distributor is deciding what type of product distributor you want to become. In general, product distributors can be broken down into 2 basic categories:  1.)  A retail product distributor is a distributor that purchases products from manufactures to distribute directly to consumers or 2.)  A wholesale product distributor that purchases from the manufacturer to resell to retailers or other product distributors.



Tip 2 - How to Become a Product Distributor:  Seeking Out Product(s) & Suppliers


The next step to become a product distributor is to start seeking out manufacturers/suppliers that you would like to become a product distributor for.  You can start with a specific product or a variety of items.  We recommend sticking with a product or product line you have interest or familiarity with at first. 


If you are at a loss, try searching our extensive database of manufactures who are actively looking for product distributors to distribute their products to help you get started.



Tip 3 - How to Become a Product Distributor: Financial Planning


When you become a product distributor it is important that you plan your start-up costs according to what you will be selling and how/where you will be selling them.  As you plan your product distribution business, it will be important to keep in mind that inventory will be your single biggest expense.  Therefore, it is important to find manufacturers with the lowest per unit pricing and flexible payment terms (i.e. pay with credit card, net payment terms, etc.) to ensure the viability of your distribution business.   


If you are limited on cash flow or inventory space, for instance, you may want to become a product distributor for manufacturers that provide drop-shipping to prevent you from having to carry inventory and lower your initial investment costs.



Tip 4 - How to Become a Product Distributor:  Selling Your Products


The next step to become a product distributor is to establish how you will be selling your products. Our suggestion is to, first and foremost, come up with a Doing Business As (or DBA) name for your product distributor business and register it with city hall or your county’s administration office.  The next step is to create a website yourself, or through a website developer, that lists your products and prices. And, finally, get the word out about your business through advertising, trade shows, word-of-mouth, etc.


Like starting any business venture, deciding to become a product distributor requires that you do your research, plan accordingly, and keep in mind that building a successful business will take time, persistence, and hard work!


We're also here to help.  You can use our online platform to find great products to distribute from world class manufacturers.  You can also get investment from these manufacturers directly via our platform to help you get your business going.  For more information on how to become a product distributor or to find local distributorship opportunities in your country, visit PanXpan.