Official Distributor Letter

If you are a businessman and you decide to enter in the world of wholesaling industry, you need to send a letter to the company or manufacturer with the intent that you want to be their official distributor. Your selling point would be that you are good at marketing and you can promise that you will be able to reach out to the audience’s expectations by bringing the manufacturers product to them. You may also see child care authorization letter examples.

How you market the product is up to you. But you would not be interested in marketing or distributing a product that does not suit your interest, would you? If your interest is in selling foods and beverages, you would not be interested in distributing toys. Or if your interest is in children’s toys, you would not be interested in selling foods and beverages. But if you are interested in both products, then why not?

In this article, we talk about official distribution letter, how to write one, and the concepts surrounding it, as well as the business of distributing products. You may also see notice letter examples.

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What Is a Distributor and Its Functions?

A dictionary will give us two common definitions of a distributor:

1. In mechanical engineering, a distributor is a device in a gasoline engine for passing electric current to each spark plug in turn. That has nothing to do in this discussion. But the idea behind it is very relevant, and you will see why. You may also like business proposal letter examples.
2. An agent who supplies goods to stores and other businesses that sell to consumers. For example, a laptop distributor.

So what exactly is a distributor in the business world?

Imagine a scene where there is a producer or a manufacturer. This is where products come from. For example, a company that makes a laptop, let us call that company ABC, and they produce laptops called 123. All they do is design, make, produce laptops. They also do marketing. The second party in the scene are the consumers. These are the people who need laptops. They are supposedly the target audience in the marketing world of ABC company with their 123 laptops. You may also check out email cover letter examples.

Will the ABC company be able to reach out to the audience? Well, it depends on the company. If they spend time to connect to the audience, that would be great. But what if you were told there is actually a third party? That is the party in the middle between the manufacturer and the consumers. What if there was job that is specific for marketing and you could do it instead of the company doing it to for the consumers? That is the job of the distributor. You might be interested in simple resignation letter examples.

Distributor and Its Complexities

The distributor does not only do marketing but actually sell the products of the manufacturers. But it may be complicated; a distributor may not have to directly sell the products to the end users or consumers. Sometimes, a retailer, a value-added reseller, and a system integrator may come in between distributor and end users. You may also check out on how to write business reference letters.

Retailer, Value-Added Reseller (VAR), System Integrator (SI)

1. Retailers are like distributors. While distributors get their products directly from the raw manufacturer, retailers may get their from the distributors.
2. Value-Added Resellers (VARs) may make modifications of the product. They make the products more polished and ready for the end users and consumers.
3. Systems Integrator can make use of multiple products and combine them into one, such that he may come up with a computer that is made from different manufacturing companies. You may also refer to recommendation letter examples.

So we may think of distributors as someone who handles the selling of the products from the manufacturers. But they may not have to sell the products directly to the end users. And there are reasons for that other than for convenience sake. The products they are receiving from the manufacturers may not be that finished or polished. For example fuel. A distributor may buy the fuel from a big manufacturing company. But that is not all there is to selling a fuel. Take gasoline for example. It needs to be repacked. That is why we have some gasoline stations. And that is somehow the job of the retailer, the VARs, SIs. You may also refer to formal letter examples.

How and What to Write in a Distributor Letter?

So you want to become a distributor? You need to write a letter to the manufacturer. As a distributor, you will be proposing to be the sole distributor of products. You are actually proposing for the rights as the only distributor of the products. So you need to present it well. As mentioned earlier, your selling point would be that you have a good connection with the audience. Here are some tips when sending a (email) letter:

1. Site Domain. It is advised that you have your own internet email domain so as to make it appear as professional as possible. Remember, being a distributor is like having the responsibility of a manufacturer, save for the ownership and manufacturing responsibility. You may also see two weeks notice letter examples & samples.
2. Confidence. You have to show in your letter that you are confident in what you are getting into.
3. Direct. Get to the point. Say you want to be sole distributor, and that you have all the resources to handling the marketing, the payment. You may propose your own terms. You may also see complaint letter examples & samples.
4. Information. You need to let the company know all the important details, such as your name, your company name, email address, contact numbers, physical address, tax registration numbers. Include as well your company profile and the projects you have made. They would be interested to know if you have other distributorship contracts with other companies. If necessary, you may want to show them your financial capacity to invest in such a big business. You may also see how to write an official letter.

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Distributorship vs. Franchise

It would also be interesting to discuss the nuances between distributorship and franchise. A good keyword to use when making a distinction between distributorship and franchise is control, but there are many other things.

1. Control is the the key factor when deciding whether to become as distributor or a franchisee. As distributor, you have good control over the products so much so that you can somehow make mods of it. And that can be a problem because modifying products has, to some extent, limits, such as renaming the product. This has even caused a lot of legal issues. The best defense that a distributor can do is to make a claim that they were only doing it as a franchisee. You may also see appointment letter format examples.

And why is that? In a franchise, the franchisee is so limited in handling the products. In fact in a franchise, the manufacturers provide the training, the marketing, the building of structure, etc. to the franchisee. That is not the case in a distributorship. In a distributorship, the distributor will take the big role of the manufacturer, even to the point of making themselves independent from the manufacturer. Although a distributor purchases the rights to sell the products, they do not have the ownership of the products. You may also like reference letter examples.

2. Selling products or brand? Although, franchisor is limited in the control of the products, the big advantage that it has over distributors is that it has already a strong customer backup. There is a solid customer base because of the company name that they bear. In a distributorship, they only take advantage of the clients (retailers or resellers), which may not be an end user or customer. You may also see email cover letter examples.

3. A franchisee has to pay an initial fee, as well as the continuing royalties just for using the company name, the brand, the right to operate the business. A distributor will only have to pay the products that it gets from the company, the manufacturer that makes the product. You may also refer to application letter examples.

Which one would you prefer? That is up to you. There is a creative aspect in being a distributor. But in a franchise, you will enjoy the popularity that the company has already started.

Relationship of Manufacturer and Distributor

Manufacturers have two options to distribute their products to the end users:

1. By doing the distribution themselves.

2. By allowing distributors to do the distribution for them.

The very reason why manufacturers may need distributors is because the manufacturers’ sole job is to produce. If they have to do other things, that may not be healthy to the productivity of the company. It is like a basketball player whose main role is to shoot, but the coach would also want him do other things like dribbling the ball. Not that dribbling and shooting roles are impossible to do in the game of basketball, but that there could be somebody else who can do the job. You may also check out application letter examples & samples.

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Advantages of Having or Being a Distributor

As a distributor, it is important that you have connections with retailers. This is not just an advantage for one but for all three: the manufacturer, the distributor, and the retailer. And for a company having a distributor, the task of delivering the products to the end users is saved, so it can focus on doing its main function. You might be interested in complaint letter examples & samples.

So How Do You Become an Official Distributor?

1. Education. Research, research, research. The only way you can be successful in you endeavor as a distributor is to be knowledgeable in what you are getting into. You need to see the cons and pros of selling. You need to master the art of business, as well as the mathematics of it.

2. What product to sell. You also need to be knowledgeable in the products that you will be venturing into. You cannot be selling computer parts if your interest is limited to corn grains. But you should not only be interested in the products, you should have a love for the products that you are into. You may also see simple resignation letter examples.

3. Is the business profitable? It is good that you have interest and love in the products. But you should first remember that this is business, and business is about profit. It is about money.

4. Open up a business account. Apply for a business license. You can start without a license, but you cannot go on without one. If you want your business to be operating legally, and if you want manufacturers to be convinced in your skills, your talent, your credibility, you need to show them something, not just your talent but also papers. You may also see offer letter examples.

5. Calculate, compute funding. There are many products that you can distribute. Look for one that can get you to the top. Choose one that can provide you with a lot of profit. Choose the product not just for the sake of interest but also on account of profitability. So which do you think is more profitable, distributing beverages or computer parts? That should be part of your research. If your own research is not enough, hire a distributor consultant. He can give you all the options on how you can operate your business. You may also like thank-you letter examples.

6. Do you need a warehouse, a physical building? Maybe you never thought of having a warehouse when you enter into distributorship business. And now you realize that being a distributor really requires a warehouse. Do spend some penny for a warehouse. But if you cannot afford for the moment, you can use a tent. Depending on the products you are distributing, if you are into beverages, a tent would do. In some cases, you can rent a warehouse. You may also check out incident report letter examples.

Distributorship is a good business. It may be difficult to operate at the start, unlike in a franchise where in all parts are provided—from the building, the training, the marketing, the products, everything. In a distributorship, you somehow have to operate on your own. And that makes it interesting and less boring than operating a franchise. You might be interested in recommendation letter examples & samples.