Modern society is developing every day at a rapid pace, more and more new professions and terms are appearing. Thus, quite recently, the now famous dealers and intermediaries were called merchants. However, in current market relations, the differences between different types distributors of goods. Dealers and distributors – who is who, we will try to figure it out in this article.

Who is a dealer

The word "dealer" is of English origin and is translated as "agent, merchant." A dealer is a company or individual who purchases products wholesale and sells them in small quantities or at retail.

This group of traders also includes agents of the manufacturer or distributor participating in the transactions.

Thus, the dealer occupies the last place in the commodity exchange chain and is in direct relations with the final buyer. This is the main answer to the frequently asked question - what is the difference between a dealer and a distributor.

Types of dealers

In the trading sphere, there are two types of dealers:

1. A retail dealer is a classic type of intermediary between trading company and legal and individuals those wishing to purchase the product.
2. An exclusive dealer is an intermediary in the sale of original rare goods in a certain region. He owns the right to represent premium products and has the opportunity to make unlimited profits.

To better understand the difference between a dealer and a distributor, let's consider their main functions, rights and responsibilities.

What is the job of dealers?

Dealer activity consists of performing intermediary operations:

• purchase and sale of products produced by enterprises or sold by distributors and owners;
• representing the interests of the product manufacturer and its brand on the market.

Cooperation between dealers and product owners involves the conclusion of an agreement that defines the rights and obligations of each party. But, in addition to the delivery and payment of goods, dealers are required to adhere to certain principles. Thus, the intermediary, in addition to its main functions, has additional rights and certain responsibilities to the manufacturer.

In other words, the dealer is fully responsible for his activities and if the terms of the contract are not met, he may lose his job. So, if sales are not going well, the agent is not actively promoting the brand, and the owner of the product does not sell the required quantity of products, the company may refuse the services of such an intermediary. In this case, the dealership may be transferred to another dealer.

To ensure that the intermediary is interested in sales, all manufacturing firms and distributors offer agents a percentage of the actual volume of goods sold, in which a dealer differs from a distributor.

Dealer rights

Each dealer has the right:

1. Call yourself an official representative of the manufacturer or distributor.
2. Receive goods taking into account dealer discounts. He plays the role of a reseller, so he buys products at special prices.
3. Represent the trading interests of a manufacturing company in a certain region or among a specific circle of buyers.
4. Receive a loan from the manufacturer in order to develop your trading activities. From this point it follows that the intermediary does not necessarily have to be financially secure. What is the difference between a dealer and a distributor? The fact that he can start his activity with a minimal contribution.

Dealer Responsibilities

There are many more professional features that illustrate how a dealer differs from a distributor. The difference can be determined by the requirements put forward by manufacturers. Thus, the responsibilities of the dealer include:

1. Purchasing planning - the dealer must buy the goods in a certain amount and with the frequency specified in the contract. If for some reason the intermediary was unable to sell the required volume of products, then the difference is carried over to the next period. The fact is that the subject of the contract is the purchase of goods by the dealer from the manufacturer, and not its sale to the final buyer. Therefore, the agent is obliged to buy products in a specific volume. When the intermediary is already the owner of the product, the manufacturer is not interested in the dealer's relationship with third parties.
2. Territoriality - the intermediary has his own implementation area and must adhere to it. As a rule, such a sales territory coincides with the geographical or administrative division of the country. This could be a village, a city, a region or an entire state. If the contract provides for the right to sell in a specific territory, the dealer can supply the market with his product as a single person. Although it is possible that other agents with similar products will operate in this area. Such saturation with intermediaries is typical for consumer goods (for example, food).
3. Promotion of goods - this responsibility applies to every trader - dealer or distributor, but it manifests itself in different ways. At this point there are features of each type of trade, which also answer the question - what is the difference. The dealer and distributor are almost equally obliged to facilitate the sale of goods. Only each of them uses their own marketing tools. So, the dealer must conduct various promotional events and promotions. Thus, the intermediary actively advertises the manufacturer. And if there are several intermediaries of such a company in the territory, advertising campaigns of one agent should stimulate sales of all dealers. Financing of promotion occurs only at the expense of the intermediary. For comparison, marketing campaigns The distributor is paid by the manufacturer of the product.
4. Trade only goods from one manufacturer. This is especially controlled when the enterprise is fighting with competitors for the sales market. As a rule, dealers of the same brand must adhere to a certain company style. For example, wear branded clothing, use special equipment with advertising pictures and slogans.
5. After-sales service - in addition to the sale of goods, the dealer must provide warranty and post-warranty repairs of the sold products. Warranty repairs are carried out free of charge to the buyer, and costs incurred by the dealer must be reimbursed by the manufacturer.

Also, the intermediary is obliged to serve customers at a high level, since he is the face of the manufacturer. During communication with a dealer, buyers form an attitude towards the brand, which significantly affects the indicator of product demand.

Sometimes the contract may provide for additional responsibilities: supplying the manufacturer with materials and raw materials, lending to production as an advance payment.

Who is a distributor

A distributor is an individual or entity, which is the official representative of the manufacturing company and performs the functions of distributing goods from the enterprise to retail or wholesale resellers - dealers. Such a distributor is an intermediary between producers and subsequent traders. This important feature how a distributor differs from a dealer. Although there are some cases when the distributor works with end customers.

A distributor can be either big company, and one person with certain skills and knowledge.

In addition, the distributor has the exclusive right to sell the product at a reduced price without trade margins. These are the most important differences between a distributor and a dealer.

Distributor functions

The functions of a distributor and a dealer are very similar. The distributor is also involved in selling goods, replenishing stocks of products and finding ways to sell them. But there is still a main feature that distinguishes a distributor from a dealer - the development and maintenance of a dealer network. That is, the distributor is constantly looking for new intermediaries. Thus, in order to increase large sales volumes, each distributor tries to create its own dealer network that would generate a stable regular income.

Requirements for distributors

To carry out its functions, the distributor must meet certain requirements. So, it should have:

• a specially designated place for storing the required amount of goods;
• own dealer network;
• cash for lending to intermediaries;
• qualified personnel.

Such differences between a distributor and a dealer indicate some complexity of the profession, since the distributor must have a certain financial basis.

Who is more important - the distributor or the dealer?

Every manufacturer at the very beginning of their activity wants to create a developed sales network for their products. To do this, it uses both distributors and dealers. Both perform the same role - selling goods. But who brings in more income?

By quantitative indicators The distributor's sales and profits can be considered the most significant link in the trade chain.

As a rule, an experienced distributor has a large sales network, which ensures stable sales volumes.

But if dealers are removed from this process, distributors will be forced to look for buyers on their own. And this will slow down trading and significantly affect the manufacturer’s profits. After all, the ability to work with customers is what distinguishes a dealer from a distributor. Therefore, both distributors and intermediaries are equally important in the trading process.

2 weeks ago

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Imagine that you manage three companies. One of them is a manufacturer of products sold through a dealer network. The other is a distributor, responsible for working with dealers in certain regions. The third is an ordinary dealer selling retail on the dropshipping principle. This is how my business works today. This position allows me to objectively assess the relationship between suppliers and dealers from all sides and determine the main factors that allow us to build an effective dealer network.

There are 3 main tasks when working with dealers:

• find potential dealers;
• convince them that they need your products;
• properly organize the work of the dealer network.

Search for potential dealers

• among those who already sell similar products;
• among those for whom your products may be related;
• among those who are just planning to open a business and choose a niche.

• in the Internet;
• on specialized trading platforms(for example, furniture shopping centers, construction markets);
• at specialized thematic exhibitions and conferences;
• in the address book of your phone.

There is another way to search for dealers, which I actively use. It is more expensive and labor intensive, but works great.

How to convince dealers to start working with you

Products

Let me emphasize once again that the competitive advantage of your products should be OBVIOUS to the buyer. Let's say you make very durable shoes and consider this a competitive advantage. It is true, but how can you prove it to the buyer? How can you prove this to a potential dealer if your brand is not yet known to anyone? Instead of talking about durability, promise free shoe repairs for 3 years. Make your advantage obvious!

If you are bringing to market new product, it is not enough to make it the same as competing products already on sale. It must be better or cheaper, otherwise dealers will not be interested in it.

Remember, if your products are in demand by the end buyer, dealers will be most interested in you.

Minimum retail price

One dumping dealer can scare away dozens of partners from you!

It is important to determine the MRP (minimum retail price) for the entire product line and prohibit dealers from selling cheaper. It is necessary to strictly monitor compliance with the MRP, primarily on the Internet, and stop shipments to violators! Don’t be afraid to lose such dealers; their benefits are much less than their harm.

A dumping dealer does not increase the number of final buyers of your products, he simply “steals” them from other partners.

Dealer price

For many suppliers, the dealer price schedule depends only on the volume of purchases. In most cases this is an error. Let me give you an example. The manufacturer of building materials has among its partners retail chains, online stores and construction companies. The first and second promote its products among retail buyers, so the dealer discount for them should be significant. Construction companies They buy products because they are better than their analogues and the price suits them; giving them a large discount “for volume” makes no sense.

For each category of dealers, you need to create your own price grid based on the principles listed below.

2. The smaller the average retail bill, the greater the dealer discount should be. For example, if you produce bath mats with a minimum retail price of 2,000 rubles, the dealer discount of the retail chain should be about 50%. If you produce metalworking machines worth millions of rubles, then a 10% dealer discount may be quite enough. But do not forget to make allowances for the first point (if the dealer actively influences the choice of the end buyer, for example, recommends your machine or a competitor’s machine, your dealer discount should be more attractive).

3. Find out what dealer discount your competitors are offering. It is advisable that your proposal is no worse.

Remember, in the end, what matters to the dealer is not the percentage of markup, but the total amount of money that can be earned. For example, a dealer earns 50% on a competitor’s product, but only 30% on your product. But it is more profitable for a dealer to sell your product, since the retail price for it is 2 times higher, and at the same time it sells no worse, thanks to its unique characteristics.

I have come across furniture suppliers who tried to sell their products through online stores without proper photographs. They believed it was the dealers' problem, not theirs. It is not surprising that cooperation with online stores did not work out.

2. Don’t rely on managers; automate all business processes that can be automated. This will not only reduce your maintenance costs
employees, but also minimizes money losses due to the human factor.

3. Monitor compliance with the MRP (minimum retail price). I already wrote about this above, but since it is very important, it would be appropriate to repeat it. A dumping dealer does not increase the number of final buyers of your products, he simply “steals” them from other partners.

4. Inform dealers in a timely manner about new products, warehouse balances, planned revenues, discounts. The more accessible the information is to dealers, the higher the sales will be.

5. Provide advertising support to your dealers. Advertise your own website with dealer contacts. Provide product demos, flyers, catalogs, exhibition stands, etc. free of charge (or at cost).

6. Invest energy and money into “promotion” of the brand. Follow customer reviews, publish information materials on the Internet and print media. If you supply goods under a manufacturer's brand, seek funding for brand development.

And, of course, keep an eye on how actual information presented on websites and in partner stores. Very often they forget to add new items or do it very late. Information about your promotions and discounts may also not reach the end buyer. Remind dealers in a timely manner about such errors and demand their prompt elimination!

Online service for working with the dealer network

The listed features are only a small part of the functionality of the service. ANVE.ru “can do” much more and is actively developing towards a multifunctional tool for suppliers and dealers.

***
When your dealer network is built, monitor the performance of your partners. Identify the leaders, find out what the secret of their success is, and encourage others to pay attention to it. Sometimes following simple recommendations can increase sales several times.

Happy sales!

More and more often, clients come to us whose main task is to create or structure work with a dealer network, distributors, and representatives in the regions.

We will not go into more detail about how a dealer differs from a distributor or representative, since different companies have different ideas, depending on the historical profile of their representatives in the regions. In this article we will focus on the issues of creating and developing a dealer network.

Dealer is a company that purchases goods in small or large wholesale from a manufacturer or a general dealer of a manufacturer in the Russian Federation and then sells it in its region through its own retail stores or selling it to other retail chains and individual retail outlets.

2. How to build a dealer network:

2.1 Calculate the profitability of opening your own office or representative office

Its own representative office will always work in the interests of the company, since the dealer can change the main supplier at any time. That's why the best option, if you have a well-functioning model in a certain region, open your own office. But if there are no funds or resources for this, the calculation of opening your own office will allow you to understand the business from the dealer’s side. Because the dealer does exactly the same thing that your office would do, only he may already have some resources.

Dealer Resources:

• Client base; (secrets of successful work with the client base)
• Knowledge of the region;
• Administrative resource;
• Finance.

But the dealer will never have one thing - complete devotion to your company and product; he will always think about how to expand his own pie at the expense of your share of the profit. Yours the main task- give the feeling that the pie is already as big as possible, and changing the supplier or manufacturer will deprive it of many advantages or create problems.

2.2 Develop a strategy for capturing the region

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Why, if this is the dealer's task? Everything is very simple, there is no difference between management by managers and dealers. To achieve results, you need to see which way the dealer will go to achieve the goal. And we must understand his actions based on our own experience in a particular region. If your company does not have retail store in the region, or does not work with end customers, this is a very big disadvantage; you do not have an experimental field for testing working sales strategies. And you won't be able to help dealers achieve results. For a distributor to be successful, you must actually act as their consultant and help them organize sales as if it were your dealership.

That's why you need formulate a plan to conquer the region. But do not rush to voice this plan to the representative who has expressed a desire to work with you. Find out his opinion. It is quite possible that he will suggest new ideas, perhaps he will use a strategy or resources unknown to you. Having a clear plan of action at the dealer will allow you to understand the approach to work and the likelihood of achieving success.

So, we decided that before offering dealer conditions, we need to take the place of the dealer ourselves, draw up a work plan and calculate the profitability of the dealer’s work, in this case we have:

• Understanding the representative's remuneration corridor;
• The way of thinking of potential partners;
• Dealer's customer search strategy;
• Tactical techniques for developing sales in the region;
• Analysis of proposals from alternative suppliers;
• Understanding the required resources for the full conquest of the region.

3. From theory to practice

Let me give you an example from practice. Our client, a product manufacturer, followed a policy of creating a dealer network of only those representatives who sell only his product. One of the leading representatives of competitors approached him and offered to work with both the competitor’s product and the manufacturer’s product. The manager thought about the possibility of changing his policy.

Here are our conversations:

• — What percentage of buyers overlap. That is, both your product and your competitor’s product may suit them?
• — More than 90%.
• — That is, the buyer is most likely to choose the product that is best presented to him?
• - Yes.
• — What share does the competitor give to the representative and what share do you give?
• — We give 20%, the competitor 40%, but we cannot give such a reward, because our product is 2 times cheaper than that of a competitor.
• - Now let's take the place of a partner: you have the opportunity to receive twice the reward, from a price that is 2 times greater. In total, you need to choose to earn 10 rubles or 40. How much will you choose?
• — But our brand is more famous.
• — Of course, that’s why the partner wants to start working with you, so that he can have new channel sales through your brand. But what will he always persuade the client to do?
• — It’s clear that he’s buying a competitor’s product because it’s profitable for him.
• — Then it makes sense to find a representative in this region who will develop your brand, and not use it as a bridge to selling a more expensive product?

By the way, in this dialogue we used the SPIN technique to ask questions.

4. Who should you bet on: an established distributor or a promising one?

Having an excellent, but not well-promoted product, many manufacturers or suppliers believe that this is enough for a dealer network to be built only with large partners who would be happy to expand their range. But market realities tell a different story.

Large dealers already have regular customers and a permanent portfolio of brands, and expand it with little desire, except in cases where they commodity matrix there are real gaps. Access to large dealers is comparable to access to federal retail chains. Labor-intensive, low-margin, and high-risk. But such dealers have regular customers and there are volumes. Representatives with sparkling eyes and those who want to promote your brand don’t have volume, but they have energy and mobility. Therefore, for a new product it is always more cost-effective to start developing a dealer network with small but promising distributors. But here a new, no less important question arises.

5. Should I give the dealer exclusive?

I found a clear answer to this question for myself. To give, or rather to give the choice of status to the representative himself who wants exclusivity.
So, what do we do when preparing a dealer proposal:

Let's build a hierarchy:

• 1. Main distributor;
• 2. Cool dealer;
• 3. Official representative.

The first and second words in the names can be changed as you please, and as you like. But the point is this:

• 1. This is the exclusive representative in the region - he is given a volume commitment, marketing support and the best prices.
• 2. This is a large representative, there may be 2-3 of them in the region, that is, the exclusive seems to be given, but to several representatives. They also require volumes, but smaller ones and are given good prices, but worse than in the first option.
• 3. This is a representative who is not subject to volume requirements, but is also given the smallest discount.

And we send this offer to everyone who wants to become a dealer in the region. That is, all market players understand the general situation. They understand that an exclusive representative may appear in the region, which will dominate the entire region. Moreover, options 1 and 3 or 2 and 3 are not mutually exclusive. That is, there may be a representative and several large representatives in the region. Or there may be representatives and one exclusive owner. But representatives buy from large representatives or from an exclusive agent. By creating such a system, we set a high bar for 1st place, and those who reach this place understand that there are contenders for their share from below. And if he doesn't keep up the volume, there are plenty of other players looking to grab his pie.

Certainly, the creation of any scheme does not exclude the characteristics of the market and the position of the product on the market. But our team has extensive experience in building dealer networks and we can say that this approach to building a network works most often successfully. I think we have answered your question on how to create a dealer network, and if you need help, we are always ready to support you in this matter

Hayrapetyan Felix

“Good ideas do not originate at conference tables. They originate in working with the consumer"

Manufacturers are interested in the successful introduction of goods to the market and rapid growth in sales. But the pace of sales cannot increase all the time in one region, since the market consists of a limited number of consumers. To solve this problem, it is necessary to bring the product to other regions, creating additional distribution channels. One of these channels is the development of a dealer network.

Thanks to intermediaries, the movement of goods becomes more economical and efficient. They provide various services as products move through the dealer network. There are two types of intermediaries: retailers and wholesalers. Retailers sell goods directly to end consumers. Wholesalers distribute products to retailers.

Intermediaries exist because there are real problems in the sale of goods that are easiest for them to solve. Firstly, there are problems of geographical distance between buyers and sellers. Remoteness complicates the process of matching product and market, because consumers in different regions want completely different things. For example, a person in Novosibirsk wants to buy a wool sweater, while in Sochi he would rather prefer a light turtleneck. Secondly, the goods should be located in places that are easy to reach, such as large shopping centers.

The discrepancy between producer and consumer can be traced in two directions: quantity and assortment. Companies would like to produce products in large quantities, whereas an individual buyer only needs one or two units. At the same time, manufacturers must understand what range is needed. After all, people across the country have many different wants and needs, and organizations must strive to meet them.

Because intermediaries are located close to buyers, they can more accurately assess the needs and desires of a particular market. Intermediaries, especially retailers, actually talk to consumers, work directly with them, and learn first-hand what they want. They share the acquired knowledge with the manufacturer.

Let's take a look at the development of a payment system business as an example. It provides intermediary services for data transfer. In our case, the payment system is a wholesaler that distributes goods to retailers. In order to stimulate sales, the wholesaler converts the aggregate offerings of service providers into a single product.

The figure shows the channel of interaction between Service Provider, Wholesaler, Retailers.

As goods move from the company to the final consumers, various exchange transactions take place. Manufacturers purchase raw materials, which in turn are used to make a finished product, which is then distributed to the final consumer.

The payment system, based on proposals from service providers, develops a product for accepting payments, which is exchanged for payment in one form or another. But this is not all that is exchanged during this process. As a product passes from one participant to another, information is exchanged. Communication back through the distribution channel allows producers to know the needs of consumers, although channels that are too long can filter and limit the data.

The scope of distribution covers both strategic and tactical decisions. Strategic ones consist of choosing a distribution channel and intermediaries that will form a system for promoting the product to the market. These decisions serve as a stepping stone to making tactical decisions, such as specifically identifying the firms that will be used as intermediaries to actually move the products.

Channel of interaction between Service Provider, Wholesaler and Retailers.

If the products are new to the firm but not to the market, channels already exist. If it allows throughput channel and there is sufficient demand for the product, it can easily take its place next to other products. For example, this approach was successfully used by payment systems when they sent self-service terminals and other payment acceptance products to retail chains. That is, the subscriber could pay for communication services to service providers by depositing money into a banknote acceptor at a self-service terminal, or through a cashier when paying for goods purchased in a store.

When deciding which channel to choose, try to evaluate the organization's goals, resources, and understanding of the market. Distribution strategies are determined by three criteria, namely: the degree of market coverage by a particular channel, the level of control of the organization over the channel and the level of costs.

With the help of intermediaries, it is possible to reduce the number of transactions that need to be completed to reach a specific market. Let's look at an example. So, a supplier can make sales through one contact with one end customer. And he can also contact one wholesaler, who is connected with two retailers, each of which works with different regional centers, which, in turn, includes about 30 regions. In the latter case, the total number of contacts will increase by more than 60. The longer the distribution channel, the higher the market coverage. Thus, if the size of the potential market is very large, a large number of intermediaries are required.

Once intermediaries take ownership of a product, they can do almost whatever they want with it. They own it. Most manufacturers strive for aggressive sales and promotion by intermediaries in some form that will allow the product to move through the dealer network efficiently and at low cost. They also want the product not to fall into the hands of intermediaries whose image does not correspond to the goals of the manufacturer, and whose business does not contradict the law.

Distribution costs for the producer are lower when a longer channel is used. A short, direct channel requires significant investment on the part of the manufacturer, since he is forced to maintain a large staff of sales and office personnel.

All these criteria serve as a general guide to the selection of a distribution channel. Neither of them should determine the strategy themselves; rather, the totality of all relevant factors must be taken into account.

Once you have determined the length of the channel and the type of intermediaries that should be involved in the distribution, proceed to the next step. It consists of finding the total number of intermediaries in the channel, in other words, the distribution intensity. There are three alternatives: intensive, selective and exclusive distribution.

The purpose of intensive distribution is to cover a wide area. This method ensures maximum contact between consumers and products and assumes that at each retail outlet where the product may be of interest potential consumers, it is in stock. For example, in communication shops a large assortment mobile phones. The clients of these salons are often subscribers of telecom operators, so providing the opportunity to accept payments to operators is in demand by consumers.

Selective distribution means using a limited number retail outlets in every territory. This allows you to select the best among channel participants, avoiding increased risks. At the same time, such a strategy places greater responsibility on intermediaries in terms of promoting goods. It is usually used for products that can be classified as well-known brands and which are characterized by a high degree of brand loyalty.

With selective distribution, producers benefit from greater loyalty and cooperation among channel members. Retailers, for example, know that they are guaranteed a certain volume of sales and experience less competition from sellers compared to intensive distribution.

During the exclusive distribution process, the number of intermediaries for each region is limited to one. With this form, producers retain maximum control over the market. Often the manufacturer expects them to not have competing products on sale. It should be noted that such a policy is very risky for the manufacturer himself. Firstly, this is an artificial restriction of competition, and goods may become inaccessible to the mass consumer. From the point of view of the intermediary, exclusive distribution guarantees him the provision of all sales of a given product in the region, and the development of the network in a given region is focused on one partner. Secondly, the network connected from large quantity intermediaries in different regions, it is difficult to control the absence of competing goods for sale. Thus, the intermediary receives an exclusive agreement and continues to sell competing products. For example, operators mobile communications in the process of exclusive distribution, they offer the most favorable conditions for accepting payments to the partner. Partners often agree to such conditions, but it is difficult to control the lack of acceptance of payments to competing telecom operators, although there are penalties.

From my point of view, exclusive distribution is appropriate for established partners. A year ago, I received a letter from the Samara region to our company’s common mailbox. A man wanted to start a payment business, but had never been involved in it and didn’t know where to start. For exactly two months we had telephone conversations with him, correspondence via e-mail, where they described our company’s products in more detail and gave advice on ways to promote the product and business in general. As a result, he entered into an agreement with us, then became an exclusive partner, developing a huge sub-dealer network in the Samara region. Its monthly turnover exceeded the monthly turnover of our representative office in the Siberian region, which was financed for two years from the company’s funds.

How and where to find dealers and agents? What will allow you to quickly bring dealers into business and expand your network? How to work with dealers and agents? How to organize and create a dealer and agent network? You will receive answers to these and other questions in this material.

Who is an agent and who is a dealer?

Agent is a private entrepreneur or individual. a person who privately promotes the products of a manufacturer or dealer, attracts customers and receives a commission for this. The Agent has a smaller share of sales compared to the Dealer.

Dealer is a company or private entrepreneur that sells manufacturer’s products wholesale or retail through its retail network stores or sells products to other stores, wholesalers, and also builds an agent network of sellers. He can act both on his own behalf and on behalf of the manufacturer, it depends on how the parties agree. The dealer has a significant share of sales.

Why is it necessary to develop a dealer and agent network?

You can, of course, create your own sales department and engage in direct sales. You can also build your own representative offices and branches in different regions. But this requires large resources.

An effective option is to create wholesale online store(find out without IT specialists) and develop a dealer network. Why is it profitable to build a dealer network? The answer is obvious: The dealer will invest his resources and he will do the same thing as you would if you opened your own office.

For example, many automakers sell their cars through a built network of dealers, even virtual ones software products are also promoted through partner networks. Kaspersky Lab, 1C or Microsoft practically do not sell their products directly to end consumers, but act through authorized dealers and agents. And there are a huge number of such examples.

The development of a dealer and agent network will allow you to cover large territories and expand sales markets with minimal resources. The main thing is the presence quality product and network building systems.

Step-by-step instructions for creating a dealer network

Step 1. Calculate the cost of launching your own office or representative office

In the first step, it is important for you to put yourself in the dealer’s shoes and calculate the necessary resources to launch a representative office yourself, as if you were the one starting new business. In this case you will have:

• Startup cost estimate
• Work plan for launching your business
• Answers questions from dealers, since you will already have their way of thinking
• Sales and customer acquisition strategy
• Tactical plan for business development in the region
• Analysis of competitors' offers

Step 2. Create a region capture strategy and instructions for launching your business

Having been in the “skin” of a dealer, you should have a plan to capture the region; besides, if you or your company were involved in sales themselves before developing the dealer network, then this experience will be useful for creating a strategy. Strategy is a military term and means overall plan waging war.

Create your overall business development plan in the region and describe step by step instructions how to launch your business. This must be a real described document, like the operating instructions that come with, for example, a new refrigerator. This document should include everything successful actions to develop your business.

Having gone through the steps of your instructions, the Dealer should easily get into business, fully launch the business and develop it successfully, and this will save you a huge amount of time when launching your next representative office.

Step 3. Create a database of potential dealers and agents

How and where to find dealers and agents? First, make a description of who can be your Dealer and Agent. For example, if your company supplies motor oils or spare parts, then your dealer may well be a car service center that already has an extensive target customer base; your business may become an additional direction or a new business for them.

Therefore, it is advisable to look for dealers and agents among those companies and people who are already working with your end consumer, those who already have experience in building a business. Of course, you can give this opportunity to novice entrepreneurs, the main thing is that they are assertive and passionate about this direction.

Step 4: Formulate your offer to dealers and agents

After you have compiled a database of your potential dealers and agents, you need to formulate dealer conditions. Describe the sales plan you require, shares of sales and other conditions for dealers. Describe your products, advantages, show uniqueness, etc. Do it all in document form.

Step 5: Conduct a survey

Contact your potential dealers and agents. Conduct a survey, but do not make any offers, just communicate.

Tell them directly what you do and that you plan to find a dealer in this area soon, so do your research and ask them to answer a few questions. Find out the information you need, for example, how many years have they been on the market, what is their customer base, are they thinking about new or related areas of business, what should the products and conditions be like for them to want to promote it, etc.

The survey will “kill” several birds with one stone.

Firstly, it will allow you to find out more information about your potential dealers, and will allow you to adjust the offer to your future representatives, based on their wishes.

Secondly, you will establish initial communication and later you can communicate as good friends.

Thirdly, you will make yourself known and may already arouse interest in your dealer and agent offer.

After the survey, your proposal may be received the new kind, but this will already be an offer tailored to the real needs of dealers and agents. Next, send your proposal to the compiled database. After some time, contact them again and see if they have looked into the offer. Start negotiations to launch a dealership.

In parallel with the mailing, launch advertising on target sites that you are looking for dealers and agents in a particular region. You can run contextual advertising in Google and Yandex, in social. networks, as well as on the online wholesale platform Qoovee.com, which is visited by entrepreneurs, wholesalers, dealers, and agents.

Step 7: Train your dealer and agent

Create a training program for running your business and learning about your product. Record video lessons, compose written materials. Walk the dealer and agent through your program. Encourage your partners to study the material provided. Do something like an exam.

Step 8: Maintain communication with dealers and agents

Working with Dealers and Agents is no different from working with sales managers. We must constantly train, educate, communicate. Maintain communication with your partners. Communicate with them at least 2 times a week, or even more. Conduct online conferences. You can also periodically, for example, once a quarter, organize a general congress of dealers and agents.

Get feedback from your partners. Based on this feedback, improve your service, production and delivery.

Compile a collection of useful links on various business topics. Send it to your dealers periodically useful information in business and personal development.

Step 9: Expand your network

Don't stop with the results achieved. Continue to expand your sales territory and dealer network. Of course, increase production capacity. An obvious law of nature: those who do not expand, contract.

We wish you success in building a dealer and agent network!

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