Distributions Offer Stability & Profitability


If you’re looking for a way to start a business but don’t feel like you know how to make or do anything exciting and new, your best opportunity might be in support of the people who do have those cutting-edge products.

Distribution is not a glamorous sounding term, but the fact is that the management of these functions for other businesses can be profitable and secure enterprise. As long as they are efficiently run, these firms can secure clients from a variety of industries as products come and go. Whatever trends may take place as a result of consumer whims or economic forces, sales and shipping will always be around. And firms that are involved in those processes will find a way to weather downturns that will crush other businesses. Here’s how they can help product manufacturers, especially new ones.

Expanded Market Areas

For many years, businesses could only make sales in the size area where they could afford to advertise. A stray item here and there might go elsewhere, but it was always a big thing to go nationwide.

There’s really no such thing as a regional manufacturer anymore. Online sales systems like eBay and free-standing website marketplaces make products available to anyone who hears about a company. Mass email advertising is inexpensive and knows no geographical bounds. Social media spreads the good word about quality products.

What results is that a tiny basement enterprise can be global from their first weeks of operation–something the proprietor may not be prepared to handle. Instead, he or she will work to find distributors who can handle the parts of the operation that are too big to handle alone.

Higher Consumer Expectations

Now that consumers are accustomed to instant bill payment, high-speed education, and overnight shipping, any business with materials to ship must be prepared to do so in an expedited fashion. When an upstart is still busy with growing pains like training workers and perfecting production processes, there’s little time left for making individual sales, much less for packing, taping, shipping, and tracking.

Working through distributors helps these new firms get products out the door in large groups rather than sale-by-sale. Distributors can execute sales and complete shipments in a much faster way due to their experience and the advantages of specialization. What results is a month-old company that’s putting products into consumers’ hands with the speed of an established manufacturer.

Faster Growth In Sales

Now let’s tie this all together and see how it can snowball. A global market plus a near-instantaneous growing demand can equal exponential growth in sales. And like any snowball, it can get big enough to crush you.

This results in a massive and urgent need for space, lots of space. Space to store raw materials, space to manufacture products, space to package and space to ship. Ladders, shelves, dollies and pallet jacks can all assist with better spacial organization. You also need space for sales staff and customer service personnel. Speaking of personnel, incredible growth means serious demands on the staff. For example, if you have an excessive amount of orders to fill, you will need a fast assembly process.

In short, new firms with explosive growth barely have enough resources to get items made and out the door. They probably can’t handle the need for additional sales work, warehousing, and shipping. They’ll be looking for distributors to handle that while they keep their heads above water.

Featured image credit: ShutterStock

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