The 5 Biggest Challenges Distributors Must Overcome To Succeed
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- čas přidán 8. 07. 2024
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No one goes into business thinking that they'll fail, but the truth of the matter is that 99% of new distributors fail. Most distributors don't fail for lack of effort or lack of commitment. They fail because they encounter the following challenges.
1. Competition - If you distribute the same product as a big distributor, you are going to get squeezed out of the marketplace. This is because they have economies of scale and can afford to operate at slimmer margins.
2. Building a route - Every major distributor that I know had the founder go out and build a route to get the business of the ground. They did this by meeting people in the street, making relationships, and selling. Don't be afraid of sales.
3. Start up costs - To start a distributor there are some big startup costs. You need a warehouse, a truck, accounting system, LLC, bookkeeper. Most distributors don't understand the cost of the startup prior to starting up.
4. Unique Product Line - Finding a unique product line is difficult. Sometimes you have to introduce a new product to an old market. If you find product-market fit, your distribution business will explode.
5. Small Profit Margins - Most distributors that I know operate on 10-20% gross margins. This means that if your route is 100K, you will only make ~20K in profit. If you don't scale out routes, and build a sales team, you will find yourself exchanging time for money and living at a near-subsistence level.
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😮 I just learned a lot in less than 5 mins! Ty ❤
It was very informative! Thank you ❤
Awesome job 👏🏾
Appreciate you 👍🏻
I am seeing your advertisement at all time. I see you 20 time a day. I end up listening to all of your video....lol
I shared your Anderson Dairy story with few guys i know in softwares industry's. Good one there.
Keep it up and keep sharing.
I also think you maybe need to make adjustment to your add campaign, ad campaigns worked after I decided to do business with your company early in May 2020 and I had the money to sign up in November.
But I m still bombarded with ads countless time a day.
I am writing you so your ad money can be put toward someone is not your customer yet.
Anyway. Good seen you 20th time in a day.....lol
Thank you so much for this advice and for your support. I will take a look at the ad campaign to see if there is a way to limit the amount of time after exposure that the ads retarget you on CZcams.
It is amazing to receive your feedback and I really look forward to providing an excellent service to you moving forward. THANK YOU :)
Hello, how do I find suppliers? or any recommendations
It was really informative. I am planning to run a distributor company for robots ( industrial storing /stacking/ ) but I do not have expertise in that area. I do have an own retail business, but how do I go about this, ?
Hello,
iv been thinking the same have you found any more info ont he matter that you wouldnt mind sharring
Thanks,
I am working on creating a vegan wholesale business supplying to local restaurants, takeaways and ice cream parlours. I looked the competition and it is limited because I am looking at three main aspects Vegan cheese, vegan Doner and vegan gelato. I’m not show on the start up costs and if I should look at sample the products first too customers
Jamil, This sounds amazing. What you want to do sounds great. Regarding the startup costs, it depends who is manufacturing the products for you or if you are manufacturing. Once you have a product, it is a really good idea to provide samples. This gifting of samples traditionally happens during your sales pitch. Please keep me in the loop with what you end up doing, and let me know if you have any additional questions.
@@Laceupsolutions thank you for the response. I will do, in terms of manufacturing I am looking at doing that myself with the vegan gelato.
I am in the testing phase with the different flavours but with the cheese and Doner this is something I am talking too manufacturers about. I will keep you in the loop. I had the initial thaught of directly supplying to bigger wholesalers but then I realised this would literally squeeze my margins to nothing. I have an idea of just aggressively calling too companies and supplying myself once the cost has been sorted that is. What are your thoughts on that?
Do you regally get phone calls like that
Hope you notice me? I have a few questions?
How can i make a profit from being a distributor?
What are the privileges offer by the company?
I would like set up call tomorrow!
Hi Will, So sorry. This comment got buried. How can I help? What do you need in particular to see if I can be of service.
How does someone with zero experience e get their feet into distribution?
I am the founder of a portable monitor brand, and my team and I have spent many years developing our portable monitor, designing desirable structure, and iterating many times. Our products will be on sale soon. I am still condused How can I find distributors?
Pick up the phone and call them. Abboud trading would be a great example here in Miami.
Thanks for an interesting video, can you do a video offering advice on how distributors and manage credit vs cash customers
Will do. Thank you for your feedback.
I want to sell edible oil! Is their same competition as you told above?? Plz tell!
thought u were anwar lol
What do these companies that go out of business hire you to do? Your very discouraging! You don’t tell us how to do these 5 things. For example how do I get a product that no one else has? Help!
This is a good video idea. I'll see if I can get it made ASAP to help those that don't know how to get exclusivity on a product.
@@Laceupsolutions Did you answer this question? I definitely need to know!
It’s not that hard
It is that hard
r u a robot?