The Staff of Entrepreneur Media - Wholesale Distribution Business: Step-By-Step Startup Guide

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Wholesale Distribution Business: Entrepreneurs Step-by-Step Startup Guide, 3rd Edition, ISBN: 978-1-59918-555-2 eISBN: 978-1-61308-287-4

Previously published as

Start Your Own Wholesale Distribution Business, 3rd Edition, ISBN: 978-1-59918-545-3, 2014 by Entrepreneur Media, Inc., All rights reserved.

Start Your Own Business, 5th Edition, ISBN: 978-1-59918-387-9, 2009 Entrepreneur Media, Inc., All rights reserved.

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Wholesale Distribution Business

T hinking back to my first real job, I remember walking into a small showroom full of welding supplies and miscellaneous products hanging on pegs and wondering to myself, What in the world does this company do?

At the time, all I knew about a welding supply distributorship was that it paid well compared with the rest of the jobs I had interviewed for, and the owner seemed slightly impressed with my resume. With that, I found myself in the position of office manager for a three-person wholesale distributorship. My duties included loading trucks bound for job sites with cylinders of welding gases, packing and shipping boxes of welding wire headed overseas to companies like Air Products, and delivering damaged hydraulic gauges to a repair shop for a local cryogenics plant.

What followed was four years of hands-on experience in the wholesale distribution business. When I became a freelance business journalist, that job experience stuck, and I landed various distribution- and industry-related assignments.

Today the distribution landscape is a bit different than it was back in the early 90s, when I was filling out government bids for welding machines. Between rapid advances in technology and the most recent economic recession, the wholesale distribution landscape has gone through many changes. Add in the fact that huge, online-only retailers like Amazon have moved into new wholesale product categories and its clear to see that todays distribution landscape is very different than the one that companys operated in back in the 90s and 00s. The good newsas youll read in this bookis that there are still many opportunities for wholesale distributors to carve out their niches in the business world. The fact is, manufacturers couldnt survive without distribution networks. Sure some of them may opt to sell direct (i.e., creating their own sales networks to sell directly to customers), but for the most part the firms that develop and market products need the help of wholesale distributors to get their products to market.

Take the electrical distribution sector, for example. I regularly interview both manufacturers and distributors for The Electrical Distributor magazine, and both sides preach the value that distributors bring to the table. So even in a world where the next product source is just a click away on the internet, the knowledge, expertise, and customer service that a wholesale distributor provides remains a strong component of any manufacturers go-to-market strategy.

On the other side of the coin, the companies and other organizations that buy from distributors are also highly dependent on these expert middlemen. No manufacturer in the world can give the proper amount of attention to every end user. However, when territories are broken down and covered by individual distributorships, the task suddenly becomes more manageable. Take the contractor stuck on a job site in need of technical assistance with a product just purchased through a local distributor. Who do you think he should callthe distributor or the manufacturer? One is local, while the other will probably require a long-distance call and some time spent on hold.