With increasing technological developments in various parts of the world, employment opportunities have been affected adversely. This has paved way to the lines of human thinking to explore business opportunities which have lesser risks at stake. Therefore, over time, the emergence of distributors has taken place.
How a Distributorship Business Opportunity works
Not all manufacturers wish to expand into the distribution sector as well. This is the case especially with the newly commenced business ventures in the manufacturing field. Why does this happen? The main reason behind such an attitude would be financial constraints.
First of all, it requires a huge investment for starting up a manufacturing unit that the idea of immediately stepping into distribution as well of the products might take a huge toll on the person owning the business.
Secondly, some businesses might want to concentrate on increased profits only, at least over a fixed number of years from the start of the venture, by eliminating such avoidable costs directly in their business for the time being. Here steps in a distributorship business opportunity. The distributor undertakes the distribution of the products in the market by collecting from the manufacturer and making it available for the dealers or retailers at wholesale prices.
This way, they do not have to deal with the risks associated with commencement and maintenance of a manufacturing company and at the same time they would not require such large investments either.
They get the relevant support from the parent company in terms of strategies, trainings, etc. thus enabling full concentration to the focus point of the business. Distributorship is a well thought out concept of business meant especially for those who do not have sufficient capital to start up a business plan from scratch nor are ready or willing to take risks associated with opening a new company.
Need for Distribution License
Without a legitimate contract, no distributorship opportunities will successfully grab the relevant hold on the market. Hence, the need for obtaining a distribution license arises without any explanation. This builds a stronger relationship in terms of trust and respect between the distributor and the manufacturer, which in the long run proves very beneficial for both the parties.
Also, having a license always helps run the business in legitimate grounds, which in turn increases the loyalty among the retailers or dealers as well with whom the distributor maintains business relations. Such a legal contract not only helps the distributor in receiving trainings from the manufacturing company with regard to the marketing strategies for the business as well but also a reminder to the retailers that the former does not have any direct connection with the risks associated with the manufacturing section apart from the procuring of finished goods.
Author Bio : Aadvik Patel is a venture capitalist. He has worked closely with a number of start-ups and distributors in India. Occasionally he writes columns in business magazines, giving a bright insight to the public about various kinds of businesses and distributorship opportunities.