Wednesday, October 16, 2013

About Distributorships: Selling Other People's Products Through Your Own Business

Distributorships are Unstructured Opportunities, and are as old as commerce itself.  People who independently "rep" other people's products and services for a commission have been around since the first bead makers and flint knappers traded their goods for a share of the hunt.  Undoubtedly, some enterprising hunter gatherer thought, "this is good stuff.  I can swap some of these for a profit with the people in that next tribe over."  And the distributorship was born, which is why some of the independent reps I know say they're in the second oldest profession, after you know what.

The business is working as an independent sales representative for a one or more firms in an industry, and includes import-export business.  This opportunity requires a mastery of sales technique and a good knowledge of the specific industry into which you are entering.  

People who do well in an Unstructured Opportunity tend to fit a profile best described as a Natural Entrepreneur.  These are people who are hard working, educated with a commitment to life-long learning, are well organized, and work well with others.  They tend to be most comfortable in free-wheeling situations where they make their own decisions and create their own road map to success.(To better understand whether a structured or unstructured opportunity is best for you, take my quiz, What Form of Business is Best for You.

Distributorship can be an excellent business opportunity with generally low start up costs ~ mostly a professional wardrobe and a nice car (think Cadillac, Lincoln, BMW or Mercedes.)  It's also important that you know the industry you're going into, with existing contacts.  Trying to go into an industry cold?  Not advised at all.

Many companies will help you with product samples, sales materials and advice that provides some structure. Even though you're not purchasing a franchise or direct-sales business, some though not many companies help with training and consulting services as well as some business support.  It can be an advantage to rep at least one company with a known product that invests in national advertising.

The downside?  You are on your own -- which means freedom, but also uncertainty.  The upside?  You are on your own with your own business, and you can grow it and possibly succeed on your own terms.

You can start (or purchase) existing distributorships in many industries, selling a wide variety of  "lines", i.e., products and services.   Often it's possible to represent two, three or more company's lines to the same or similar customers as long as the lines are not competitors.
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