How to start a distribution business in South Africa

If you already have a particular product you are thinking of distributing, your best option would be to contact that company and find out what the requirements are to distribute their products. Each company will have different criteria.

Getting Into distribution business in South Africa

The field of wholesale distribution is a true buying and selling game-one that requires good negotiation skills, a nose for sniffing out the next “hot” item in your particular category, and keen salesmanship. The idea is to buy the product at a low price, then make a profit by tacking on an amount that still makes the deal attractive to your customer.

What to do next?

Put together a business plan that lays out the full vision of your new distribution business. The first step in writing an effective business plan is to understand what a business plan is, what type if information is contained in a business plan. And also to understand what the benefit of a business plan is to you as an aspiring entrepreneur. A business plan is a formal document that details the goals of a business, the strategy that will be used to achieve those goals. The purpose of writing a business plan is to provide you, the entrepreneur with a crystal clear picture of the likelihood of success for your business in a rapid and ever fluctuating dynamic business environment… read more how to write a  business plan.

Estimate your startup costs.

In addition to a business plan, you will also need some idea of how much money it will take to get your business up and running. As a distributor, your single biggest expense will be inventory. This means that your startup costs will vary widely depending on what you are planning on selling. You will also need a place of business, office equipment, and some warehouse equipment.



Figure out how to sell your products.

This will depend largely on who your customers are and what type of products you’re selling. In any case, your goal should be to let potential customers know about your business and what you can offer. As part of selling, put together a marketing plan so that you can promote your services. See how to create a marketing plan for more information.

Determine how you will be funding your business.
With low startup costs, you may be able to purchase your inventory and get your business started with money you already have. However, more expensive startup costs may require you to take out a loan. See List of organisations finding businesses for more information.
Register your distribution business
Make your business official by registering it, See how to register your business for more information.

Find a location for your business.

The size of the space you need to hold your inventory will be determined by the size of your product and your delivery method (you don’t need inventory space for drop-shipping). You should consider starting off small as your business builds a reputation. As your business grows, you can move into larger facilities that can accommodate your inventory needs, such as a distribution warehouse.

The Day-to-Day Routine

Like many other businesses, wholesale distributors perform sales and marketing, accounting, shipping and receiving, and customer service functions on a daily basis.

They also handle tasks like contacting existing and prospective customers, processing orders, supporting customers who need help with problems that may crop up, and doing market research (for example, who better than the “in the trenches” distributor to find out if a manufacturer’s new product will be viable in a particular market?).

To handle all these tasks and whatever else may come their way during the course of the day, most distributors rely on specialized software packages that tackle such functions as inventory control, shipping and receiving, accounting, client management, and bar-coding.