While many large companies are served by equally large distributors, these distributors are unwilling or unable to serve smaller, more specialized business. A good idea, especially in a crowded market like beverage distribution, might be to provide niche products to these specialized retailers. [2] X Research source
Writing a business plan can be the most complicated part of starting a small business. For more information, see how to write a business plan for a small business.
For an example of how much costs can vary, two successful business in different markets started with $700 and $1. 5 million, respectively. The first, a tie company, started with such a small amount because the business was run from home, started with low inventory costs, and didn’t require any equipment to manage. The second, a fine wine retailer, had expensive product to buy, had to rent a large warehouse, and had high operating expenses like temperature-controlling the warehouse and investing in equipment to transport the product around the warehouse and to customers. [5] X Research source The advent of online distribution has also created new options for distribution businesses. One of these, drop-shipping, allows for distributors to avoid all inventory control and shipping issues by never taking physical possession of the product. Never taking control of inventory means that your initial investment can be much lower. However, this a crowded market that can be difficult to make money in. See how to start a drop shipping business for more information.
As part of selling, put together a marketing plan so that you can promote your services. This may include the costs of printing brochures, creating catalogues detailing your offerings, and placing ads in trade journals or magazines. As a small business, you can expect to do a lot of marketing for the first few years until you have a good-sized customer base and have established a reputation. See how to create a marketing plan for more information.
The primary advantage of forming a company is that your finances will be legally separated from those of your company. This minimizes risk to you in the event that your business is sued or goes into bankruptcy.
It is conceivable that a successful distribution business could be built and run from your home. This depends on the physical size of your inventory, however.
Don’t buy too much inventory, especially at first. Try to estimate your customer’s needs before you invest in inventory. If you can get away with low overhead (storing items at home or at a cheap location) at first, go for it. Purchase inventory to a point where you can sell that inventory before you have to pay the manufacturer or distributor for it. [9] X Research source
You can also invest in search engine optimization (SEO) that directs potential customers directly to your website by placing it higher in search engine results. See how to improve search engine optimization for more information.
