Distributorship Opportunities: A Part of the Supply Chain

The supply chain of a business organization which is into manufacturing of goods and services would generally include the involvement of three major parties. The first and primary person in the chain would be the manufacturer. The producer would be the company which manufactures the products in order to sell them in the market at a particular rate of profit.

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The first intermediary in the supply chain would be that of the distributor who would be the link between the manufacturing company and the retailing units. There could be chances where the organization which has undertaken the distribution of the items would sell them directly to the general public instead of going through the retailers and other such intermediaries in the chain.

The distributor would collect the goods from the manufacturer and deliver it to the retailers who would sell the same to the end consumers. This would be done at a margin so that the distribution agency can earn profits out of the transactions. A distributor could exclusively deal in the products of a company or else be able to have several such contracts with various companies.

Be an intermediary through Distributorship Business Opportunity

People who do not wish to get involved with the manufacturing part of a business can easily opt to grab any good distributorship business opportunity that they would come across. It would basically involve an intermediation between the producing company on one end, and the retailing units or the end consumers in the general public on the other end of the deal.

This way, very few aspects of running a full-fledged business enterprise would be required to be explored and invested in. Conducting a thorough research on which kind of products can be dealt with will enable in selecting the best business plan in the same field. Also, if the business owner has good knowledge about the products he deals in, it would be an added benefit.

Significance of a Distribution License

When one starts up a business involving the trade of goods manufactured by another business person, it is required to have a legally binding contract signed by both parties. They are expected to abide by the terms and conditions mentioned in this contract. If by any chance, any violations are made to happen without the written consent of either of the parties, strict action would be taken against the party which committed the violation.

Such a contract is entitled to give the freedom to the distributing firm to conduct the business of products manufactured by the producing company, in the case of distributorship opportunities. A distribution license is another name for such a contract in this scenario. This license could even pertain to the distribution of samples of products as well on behalf of the parent organization.

 

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How to go about a Distributorship Business Opportunity?

Decades back, running a business meant to many people as only buying things from someone and selling it to the general public. Over time, with increasing awareness campaigns and literacy rates, they started to understand how actually a business runs.

Where were these products coming from which a businessman used to buy to sell later? People got the chances to study various facets of trade and hence received the answers to such questions no sooner. Thus the terms ‘manufacturer’, ‘wholesaler’, ‘retailer’, etc were born. While a manufacturer is the one who creates or produces a product, it is the wholesaler and retailer who form the vital elements of the supply chain.

Awareness about Distributorship Opportunities

Distributorship Opportunities | Image Resource : businesssaathi.com

Once a person identifies a distributorship business opportunity with a good brand, he is required to procure the license to conduct the distribution of the products of that company. Once this authorization is acquired, he can carry out his business by setting up warehouses for the storage of the products. Contracts to sell to retailers will need to be made. This is how he will be able to make the goods reach the consumers at the end of the supply chain.

The distributor will also be required to arrange for well prepared logistics. This will be necessary to collect the items from the manufacturing units of the parent company and bring those to the warehouses of the distributor. As per the agreement with the retailers, the wholesaler then needs to arrange for the transportation of the goods from his storage units to that of the retailers or dealers.

Need for Distribution License

Every person who runs a business needs to acquire various licenses for the same from the government. These are authorizations issued by law which ensure that the license holder will act as per the agreement or contract pronounced in the warrant, the breach of which will bind the person legally to punishments as relevant to the violations made.

If the person is a manufacturer, then they need to attain permission to set up a production unit at the fixed location. Apart from this, they require to be allowed to carry out the manufacturing activity at the decided place. They would also need to consider on how they would dispose the waste materials and so a No-Pollution certificate would also be needed to commence such a business; and the list goes on.

Similarly, when someone decides to explore distributorship opportunities, after all the necessary evaluation and finalizations on which industry they would prefer to work in, they will need to acquire a distribution license to enable them to carry out the business of a wholesaling unit or as otherwise known as a distributorship.