Distributor Business Plan

• A plan for a manufacturer, wholesaler or distributor of products to market its products or services to large organizations in various industries. The business plan includes such key financial, marketing and distribution information as you might include in a business plan for a new venture. In some cases, a distributor business plan may be part of a master plan for a business that includes a large organization as a customer and/or partner. The business plan typically describes the distributor’s industry, customers, market potential, business philosophy and financial and operational plans.
• The distributor business plan should include three parts: the product introduction and marketing plan, a description of the customer’s role in the operation of the business, and the marketing and distribution plan.

Overview

• Most distributors of goods and services (such as hardware, chemicals, machinery, medical supplies and clothing) enter into contractual arrangements with large companies for the distribution of their products or services. There are many reasons for distributors to enter into such contractual arrangements, including:
• to increase the exposure of their products or services to large companies;
• to improve their customer service and market the products or services more effectively;
• to create a more consistent brand name for the distributor’s customers; to obtain a larger and more stable supply of products or services;
• and to better manage their own expenses.
• When customers (or “accounts”) enter into these contractual arrangements with a distributor, the distributors typically provide the customer with a product and/or service to market to their accounts in exchange for a fee paid to the distributor. For example, a manufacturer might employ a distributor to market the products it has manufactured. The manufacturer typically provides the products to the distributor, who markets the products to the account.
• A business plan can be very helpful in planning a distributor’s business. Distributors need a thorough business plan because their business is unlike that of any other type of business. Unlike the business of manufacturers or wholesalers, which can focus only on its own business, a distributor also needs to plan for and coordinate with other companies and individuals, including wholesalers, retailers, customers, bankers, investors, government agencies, law enforcement, insurance companies, shipping companies, etc. Distributors also need to plan for and coordinate with their account executives and management, who often are paid based on their ability to generate additional sales for the distributor. Additionally, a distributor needs to consider how changes in its environment will affect the distributor’s ability to conduct its business successfully. For example, the ability of a distributor to generate additional sales to an account might be affected by economic and/or political conditions that affect the account’s purchasing decisions. As a result, a distributor’s plan needs to include:
• It is important for wholesale business owners to devise a distribution business plan and stick to it. It will ensure the profitability and long-term stability of the business.

Some points to note in this context:

• The foremost step in conceptualising a distributor plan is to define the mission and vision statement of the distribution business.
• Pose questions like what is the purpose and goal of the business is pertinent.
• The owner must have clarity about the values and ideas to be followed to ensure the company’s growth and profitability.
• Set up a structure and smooth flow for the business.
• Seek profit margins at every stage.
• Ensure hiring of trusted employees in the business.
• Ensure the short-term and long-term goals of the business are met.
• Devise an apt business strategy for the smooth functioning of the venture.
• Also, focus on correct and suitable marketing strategies.
• Know the competitors.
• Seek reviews or honest feedback from the owners.