So You Want to Be a Distributor ...

by Bob Harris
Created: April 24, 2009

There are a few key considerations when deciding whether to add a distributorship onto your business.

Bob Harris/DCI

Before moving your company into the realm of distributing you have to ask yourself if you're willing to give up a large portion of your warehouse space in order to stock products for customers.
Before moving your company into the realm of distributing you have to ask yourself if you're willing to give up a large portion of your warehouse space in order to stock products for customers.
Bob Harris/DCI

Bob Harris says dealing with freight companies can be the least desirable aspect of distribution. "Usually it is the responsibility of the shipper to file a claim," he explains. "But more important...
Bob Harris says dealing with freight companies can be the least desirable aspect of distribution. "Usually it is the responsibility of the shipper to file a claim," he explains. "But more important than finding a resolution to the claim being filed is the time lost for reshipment of new product."

Are you committed to protecting your investment and dealing with freight carriers? One of our first shipments as a new distributor was an entire flatbed of concrete countertop mix. Upon delivery we noticed under every pallet a pile of white powder, which of course meant someone damaged the bags while loading the trucks. We immediately took digital pictures and called the manufacturer to inform them of the situation before we unloaded any product. The end result was 23 damaged bags and a claim against the freight carrier. In addition, remember that certain products have a shelf life, which means rotating the inventory and ensuring your stock will not sit on the shelves unsold and become outdated.

Are you competing against your customers? I hear stories of businesses continuing the contracting side of the business while also distributing. The reality is that some companies are becoming distributors so they can be price advantaged. In essence, they are their own best customers. In one instance, a contractor/distributor was actually getting leads from the manufacturer which allowed him to adjust his bids accordingly which certainly was not fair to competing contractors.

These are just a few examples and considerations to keep in mind if you are thinking about adding additional divisions to your pre-existing company. Focus on your company's strong points and think through everything before you take on something you don?t want to handle and may regret.

Bob Harris is the founder and president of the Decorative Concrete Institute, Temple, Ga., which provides hands-on training in architectural concrete. He has personally placed or supervised the placement of more than 3 million square feet of decorative concrete and is the author of a best-selling series of decorative concrete books and DVDs. For more information, call (877) DCI-8080 or visit www.decorativeconcreteinstitute.com.