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Finding the right partners is critical to building any successful business. For product-based businesses who choose to use a distribution partner, there are a few key things to keep in mind. 

What is a distribution partner?

A distribution partner is the “go-between” or “middleman” between your products and your customers. They may be a company or an individual that has been given the authority to market, distribute, and even resell products from a business they are partnered with.

A distributor does the legwork for you to get your product out the door. They build and maintain relationships with vendors in your industry, dealing with different retailers and outlets on your behalf.

There are several benefits to using a distributor. The biggest potential benefit is that they may have industry knowledge and credibility, allowing the distribution of your product(s) to result in more sales. In addition, they can help with product shipments and ease some of the burden off your current staff. They can also negotiate contracts for you, freeing up your time for other tasks. Partnering with a distributor allows companies to better handle fast and scalable growth and to stay competitive. Lastly, it gives your company access to new markets and specialized industries.

If you plan to work with a distribution partner, you’ll need to support them by having plenty of inventory to offer. Scaling your business with a distribution partner may call for inventory funding. We’ll cover how to get affordable inventory funding a little later on.

What to look for in a distribution partner

When looking for a distribution partner, you want to find a company or individual that you can trust. They will be handling a large and very important part of your business, so reliability is key.

In addition, you’ll want to look for a distribution partner with some clout in the industry, and a proven track record of sales. They should have solid vendor relationships and the ability to connect you with other opportunities in the industry. They should serve your region and the pricing structure should be one that you can afford. Some distribution partners offer several value-added services such as business development, marketing, and sales support. When choosing a distribution partner, make sure they offer the expertise needed to make strategic business decisions about inventory and product placement.

Top tips on how to find a distribution partner

Choosing a distribution partner is going to depend on your circumstances and current business needs. Here are some tips on how to find a distribution partner that can meet your needs and grow your business.

  • Determine the need: The first step is to evaluate whether or not there is a real need for a distribution partner in your business operations. Take a look at your goals and whether or not a distributor can help you reach them. Determine whether or not your current manufacturing processes can keep up with the potential increased demand of working with a distributor. Consider if you are ready to introduce more hands between your company and your customer, which could cut into your profit margins. Analyze your current online sales numbers and whether or not there is a need for assistance with getting your product into more retail stores. If online demand is strong, you may not have a need for a distribution partner after all.
  • Identify target retail stores: Look at your target audience to determine exactly where they shop and would expect to find your product. Once you have determined a few key retailers, find out which product distributors frequently work with them. Leverage this data to work with a distributor who is relevant and known in your chosen industry.
  • Study the competition: Similarly, taking a look at which distributors your competitors are using is another great way to find a distribution partner who is known throughout the industry. A little bit of research will give you some great insight to work with.
  • Join trade associations: Trade associations that serve your industry and your area can be a great resource to finding all kinds of partnerships including a distribution partner.
  • Take advantage of other trade resources: Similarly, subscribing to trade publications and attending trade shows will be a good way to access information about many different product distributors in your industry. Trade magazines often publish lists of various business partners to consider, while trade shows allow you to connect with potential partners face-to-face.

Tips to evaluating distributors

In order to determine whether or not a particular distributor is right for your company and has built up a good reputation in the industry, you will need to do some research to evaluate them.

This includes finding a distributor who uses strategies that align with your business goals, offers the value-added services your business needs, and is competent enough to provide the sales you’d like to see. They should be able to keep pace with the anticipated growth in your target market and should have the capability to handle large amounts of inventory and analytics. Remember, the whole point here is to reach more customers and enter new markets to grow sales. So, be sure they can help you do that. A valuable distribution partner will help you stay competitive.

A few important questions to ask and observe are:

  • Are they stable?
  • Do they have a strong sales team?
  • Will they do any marketing?
  • How do they handle logistics and inventory?

Next, evaluate their capacity and style. Some businesses desire a smaller distribution partner for more personalized attention. Distributors with fewer partners should be able to give your brand more time and attention, but this may come at a cost.

Get connected with various trade resources that are relevant to your business and begin to ask around about the top distributors in your industry. Many key business relationships can be established simply by word of mouth. Hearing what others have to say about your potential business partners can help you evaluate your options and which one is right for you.

Remember, that your business needs may evolve over time, and it’s important to re-evaluate all of your business partnerships as time goes on and your business grows. The distribution partner that best suits your needs now, may not work for you in the future. Luckily, a choice of distributor is not permanent and can be changed to adapt to changing business needs.

Closing thoughts

A good distribution partnership results in increased sales and revenue, improves product visibility to new audiences, and provides infrastructural support for distribution logistics.

With the right partner, you can take your hands off many aspects of operations and focus your attention where it matters, such as marketing and scaling your business.

With a growing business, you’ll need to stock plenty of products. Afterall, a lack of product can mean missed opportunity. So where do you turn for inventory funding that’s fast and affordable? Kickfurther.

How Kickfurther can help

Maintaining a healthy inventory supply and healthy cash flow is important for all businesses. Product-based businesses can struggle with cash flow since a majority of their money is likely tied up in inventory and receivables. Therefore, they often turn for help with funding for inventory, only to find it’s expensive, hard to qualify for, and time consuming. But, it doesn’t have to be.

Kickfurther is the world’s first online inventory funding platform that enables companies to access funds that they are unable to acquire through traditional sources. For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. Companies can easily return to Kickfurther for several rounds of funding. In fact, companies that return after a successful round of funding often receive discounts and increased funding the second, third, or fourth time around. 

Interested in getting funded at Kickfurther? Here are 3 easy steps:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps

#4. Get funded in as little as minutes

Ramp up inventory levels to support distribution partners. . .create a free business account at Kickfurther today!

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