A distributor (wholesaler) business can have its ups and downs especially in a country like Zimbabwe. This is because the economy slows down every now and then. However, the business can be run viably if certain principles are adhered to, even during tough economic times. In this article, we look at how you can start a distributor(wholesaler) business in Zimbabwe.
Capital
Because you may be stocking a lot of commodities to distribute to retailers, your starting capital will be considerably high. This business is all about volumes so, the more you have the better. Even if you do not build your own shop or warehouse, the one that you will rent may cost you an arm and a leg especially if you need a lot of floor space. If you deliver commodities to clients, you may also need to invest in motorbikes, trucks and the like. All these require a considerable capital outlay.
Company Registration
Like any other business, your company needs to be properly registered. This will allow you to operate legally and remit taxes as required by the law. Your operations also need to be licensed. Such a business can rarely be run effectively from home. You need a shop or warehouse where people can notice you. If your shop is licensed, you will avoid constant disturbances from the authorities.
Premises
As alluded to above, chances are that you will need lots of floor space in this business. If you can afford to put up your own building you are better off. If not, there is no need to worry. You can still rent. You need to ensure that if you handle any perishable goods, your premises have adequate facilities like refrigeration. The location of your premises should be central so that you attract as many customers as possible.
Equipment/ Machinery/ Vehicles
As a wholesaler, you should invest in your own vehicles. More so if you deliver commodities to your customers. In less bulky goods, motorbikes can be used. However, if you specialise in perishables, refrigerated vehicles are a must. You may also need to invest in forklifts if your goods require that you do so. Forklifts can be costly to procure or even hire. But, they are very necessary to ensure you offer efficient, quality service.
Staff
Most wholesale businesses require a number of qualified staff. These may include sales and marketing people, drivers, administrators, general hands and so forth. Your staff should be very knowledgeable about your products because they are the face of your company most times. If you employ drivers, make sure they have valid drivers licenses. This will help avoid unnecessary delays at roadblocks. It will also reduce the likelihood of accidents caused by human error emanating from not being licensed. Your business does not need all these setbacks.
Market
In this business, you should take your time to study your market comprehensively. There are obviously different markets for different products. If you are into one product, your market will be simple, easier to understand. However, if your business distributes several products, the market may be wide and complicated. Do your homework before you even open your doors. In some cases, you may be distributing products that you do not manufacture. It must also be borne in mind that in such cases, you need to understand the product very well. This is because the market rarely differentiates between the manufacturer and the distributor. In any case, distributing poor products will also affect your business as much as it affects the actual manufacturer. In any business, market share is everything. So, you should concentrate on those things that help you gain market share. Everything else comes second.
Competition
Fellow wholesalers are your fiercest competition in this business. But, this should not scare you away. Check out what your competitors are doing and what they are failing to do and try to do better than them in everything. If their turnaround time is 24 hours, yours should be half of that. In addition, if you can compete on price, do so. If you really know your competition, you can get to a point where you can anticipate their next move. That way, you are never caught unawares.
Technology
There is no harm in making use of technology to promote your business. As such, your starting point should be an interactive website. If resources permit, you can allow customers to order goods online. You can also develop an app for your business. It is a fact that internet penetration is on the rise worldwide so your business should not be left behind. Use of social media to advertise, take orders and do other business related things is also important in this day and age. Social media has the potential to reach millions of potential customers in a short space of time. Use it extensively.
Other tips
Because Zimbabwe is going through a difficult patch economically, a wholesale business needs to be well informed about the environment in which it operates. As an example, any movements in the exchange rate between the local currency and the US Dollar may have an effect on your business. Be prepared to adapt quickly. Follow these and other developments closely. This will allow you to price competitively and make other informed decisions as well.
Another important point to note is that even if you are not manufacturing the products which you distribute, their quality is an important reflection on your business and you may be liable for faulty products. As such, ensure that you maintain high-quality standards as this will keep your customers satisfied.
Despite the harsh economic environment, wholesale business can be very profitable. In fact, some even make most of their profits in a difficult environment. Be prepared to follow all the basics and to think outside the box and you will build a viable business as a distributor.
