How to approach a distributor

[TitanDiddly]

Proofreading. It's essential.

 

[CrazyDe1]

Originally posted by: alkemyst
if there is only one distro for the US there is probably a reason.

The number 1 fact you will need to get clear is that you will make them money. That's what it boils down too.

Now *everyone* claims they can make money, I have some asshat friend that comes up with a million dollar get rich quick plan monthly...yet his dad is still paying his bills (he is 30).

You will need a business license, tax license, a storefront or at least a *real* office. A business bank account is a REQUIREMENT, one Uncle Sam hates mixing of business and personal funds, a company does even more.

Also you really have to know the product or at least who you will leverage.

All in all the average 'distributor' near the top of their chains probably handle 50% bullsh!t calls from kids / people with no clue claiming to make them millions overnight.

Actually you don't have to tell them anything. All you have to do is say you're interested in reselling blah blah blah products, please send me a line card. Can you fax me a credit app? YOu fax it back and you can buy whatever the hell you want.

I've never told a distributor anything. In fact, most distributor prices blow. If they ask I make up some BS about being an RFID system integrator and talk over their heads for 5 minutes so they never ask waht I do again. Eventually after calling up enough I could talk the lingo. Each guy would give me more infomration which I'd use to BS the next guy and talk the talk better.

Also, anyone who is going to make you a lot of money is not going to call you up and tell you they're going to buy millions of dollars worth of crap. In our business, if someone calls up and says they're going to sell 100's of our product they're immediately dismissed. Anyone who's serious is going to want to meet you in person, not make bold claims on the phone.

 

[CrazyDe1]

Originally posted by: DeadByDawn
I work for a distributor, let me give you a few tips:

Find out who the salesman for your region is, if they have one and deal with him.

Find out who their biggest competition is and talk with them first. Make sure and drop the name of the competitors salesman to the guy you really want to buy from, that way they know you've done your homework.

Come up with how much money you want to place in your initial order. Be like "Well I'm going to place a $10,000 order with either you or your competitor, and it depends on pricing".

Don't accept their first offer on what they will sell to you at. NOBODY that stays in business buys at wholesale price, the real accounts get a % discount off of wholesale price.

If you don't go to ingram or techdata most distributors dont' have minimums. Although some of your points are good I usually say something like so I can get Dell 20" LCDs for 650 and I'm buying 50-100 a month right now. I've heard they were rebadged benq's and I noticed you sell benq. What's the best price you can get me on quantities of 10, 20, 50, 100. Keep in mind they'll do way better for you if you're on net terms as it looks more legit.

 

[CrazyDe1]

Originally posted by: NL5
OK, now that sounds more like it. And, I just found out that they have a local competitor, that I may do business with instead.

And, that's about what I plan on spending to start (10k).

I still don't get the "it's like buying a house or a car"...If I buy a car with cash, they WILL sell it to me. I just can't imagine too many distro's saying no to a 10-25k sale. (unless reputation is at stake if they are high-end)

You planning on trying to ebay? If you are buying through distributors will never make you sucessful on ebay.

 

[NL5]

ebay? who said anything about ebay? Thanks for the advice though. You guys are really helping me out!

BTW - What is a line card?

 

[alkemyst]

Originally posted by: NL5
OK, now that sounds more like it. And, I just found out that they have a local competitor, that I may do business with instead.

And, that's about what I plan on spending to start (10k).

I still don't get the "it's like buying a house or a car"...If I buy a car with cash, they WILL sell it to me. I just can't imagine too many distro's saying no to a 10-25k sale. (unless reputation is at stake if they are high-end)

I was referring to the line "I got $X in CASH!!!!"...to a merchant it's always cash they get, the payments are worked out with the creditor. Now there are fees with a CC use (1.5-3%), but many distributors will require money order, cash or cashier's check for the first few orders.

You can fail with a spare time business. Buying 10k of items and having them sit is a FAILURE. Having them depreciate before sale is a FAILURE. You don't increase the distributor's sales = FAILURE.

I don't think you have really thought this and just want the claim of being a vendor for the company.

 

[alkemyst]

Originally posted by: CrazyDe1

If you don't go to ingram or techdata most distributors dont' have minimums. Although some of your points are good I usually say something like so I can get Dell 20" LCDs for 650 and I'm buying 50-100 a month right now. I've heard they were rebadged benq's and I noticed you sell benq. What's the best price you can get me on quantities of 10, 20, 50, 100. Keep in mind they'll do way better for you if you're on net terms as it looks more legit.

Net terms? net terms is something offered between buyers and sellers at a usually later date once a business relationship(s) have been made. Sometimes you can get net 30 days if you have a big amount of references.

You are always talking about all these deals you have lined up and how you employ your family to help with the burden of moving all this gear around, plus you can't bring up one topic without mention of how you lied or decieved about something. I am thinking with the amount of time you have to post here you are exaggerating A LOT of what you do.

Also buying $50k in a month doesn't mean crap. I know many vendors that spend that and still don't make anything due to piss poor management of resources and also selling to low just to make a sale. Sales are great, but without profit you are just working for free (or like some claim "I get cash back incentives!!@" which are not great and limited usually)

Also not all distributors are the same....I am refering to large ones, something with at least millions in sales....contacting a private distributor for a low run product is alot different than calling up Mattel's or Sony's lead distro telling them 'you gots $10k to spent and can dey hook ya up'

 

[alkemyst]

I think a lot of people are confusing wholesellers/volume resellers with actual distributors. Of course a simple sales guy with 10 of an item can label himself a distributor.

Many true distributors want large volume orders, why? because every order takes about the same amount of time to process and it's usually the smaller orders that cause the most grief. Usually most top level distros have more business than they can handle which is why smaller mid-level and low-level distributions are created.

Pricing varies from distributor to distributor. I know with car parts and the like it's not really how much you buy, but what kind of facilities you have and staff. A multi bay shop with trained mechanics usually gets the best terms, however, these terms may only be 5-10% different than what Joe Schmoe with a reseller certificate, business license and using his apartment number at his parent's place as a 'suite' number. Most I spoke with wanted pictures of the shop, a matching lease or deed to the address pictured, credentials on any employee you are claiming as skilled, financial statements with a listing of business accounts linked to the same taxid as the resell cert, etc.

There were many also that were just happy if I would send certified funds.....

The best deals usually come from the hardest vendors to find when dealing with foreign products as almost 100% of who you deal with stateside is just a glorified reseller....some do have actually warehouses here though and can give you as good a deal (better since they ship in huge volume) than dealing with their overseas centers.

There is no set answers....dealing with computer products is a way different niche than say silk flowers or pokemon cards. There is markets for food products that behave way differently than clothing...etc.

One of the best methods though is if you are importing to incorporate some sort of exporting also....if you want something of theirs chances are you have access to something they'd want from here.

I looked a lot into doing this, but I am a little burned out from college -> a ball and chain job for 5 years that paid me enough to buy whatever I wanted but time to spend my money -> college again -> making some mistakes and what not -> several dead end jobs I jumped back and forth to until working for myself for 2 years. It was decent money but there wasnt enough steadiness to it and I wasn't large enough to really take on more. Some weeks I'd make 3k others only $400-500....if I was 10 years younger that'd be cool but I need to get some savings and real estate going.

My current job/career is a good one...a lot of responsibility but good work is rewarded/recognized. I get a nice work environment and everyone gets along, jokes, and in general you know who you are working with as opposed to the dogma of 'no talking cubicle workers' that work in a place 5 years and don't know the guy 5 cubes down.

The best bet in life is to work for yourself. You may need to take 5 years to make it and struggle doing so, but once you get something off the ground you will be rewarded with anything you make going directly to you and then you can decide how it's divided amongst the bills and income.

My brother got a good business off the ground off $10k on a CC which he paid in full within a month and then doubled that each month for about a year. He may be moving 2-3million through the business now in it's 5th year (I think), we was profitable and fully in the black after 2 years which was a huge rarity. The big deal on the whole thing is he no longer works at it really, he has his own career (he is a CCIE/Chief Technical Officer for a large private ISP) and his g/f is the manager and he has two guys on staff....he bled though for the first 2 years working 12 hours at his real job then until 2-3am getting orders out.

Good luck

 

[LuckyTaxi]

Originally posted by: NL5
As much as I appreciate the witty remarks, it's not MLM...they are pro audio distro's. And if I were selling drugs, I wouldn't need any advice. LOL

contact chiboy if you were

 

[Fingolfin269]

Maybe I'm missing something here but who cares if you sound like a dumbass. If someone calls me up wanting to buy some stuff it wouldn't matter to me what they sounded like.

 

[CrazyDe1]

Originally posted by: alkemyst

Originally posted by: CrazyDe1

If you don't go to ingram or techdata most distributors dont' have minimums. Although some of your points are good I usually say something like so I can get Dell 20" LCDs for 650 and I'm buying 50-100 a month right now. I've heard they were rebadged benq's and I noticed you sell benq. What's the best price you can get me on quantities of 10, 20, 50, 100. Keep in mind they'll do way better for you if you're on net terms as it looks more legit.

Net terms? net terms is something offered between buyers and sellers at a usually later date once a business relationship(s) have been made. Sometimes you can get net 30 days if you have a big amount of references.

You are always talking about all these deals you have lined up and how you employ your family to help with the burden of moving all this gear around, plus you can't bring up one topic without mention of how you lied or decieved about something. I am thinking with the amount of time you have to post here you are exaggerating A LOT of what you do.

Also buying $50k in a month doesn't mean crap. I know many vendors that spend that and still don't make anything due to piss poor management of resources and also selling to low just to make a sale. Sales are great, but without profit you are just working for free (or like some claim "I get cash back incentives!!@" which are not great and limited usually)

Also not all distributors are the same....I am refering to large ones, something with at least millions in sales....contacting a private distributor for a low run product is alot different than calling up Mattel's or Sony's lead distro telling them 'you gots $10k to spent and can dey hook ya up'

Yes, and almost every distributor will make you fill out a credit app and if you qualify for net terms will give you net terms. What do you mean it's only between buyers and sellers after a business relationship has been made? You put down references of other businesses you've had terms with.

Think all you want about what I do I could care less. Since when did I say 50k meant anything? 50k doesn't mean anything to Ingram and TechData but you go and drop 50k at a smaller distributor and you'll have an account manager calling you everyday trying to cater to your every wish. Who said I wasn't making a profit? Why are you assuming I'm selling things so low that I'm not making a profit? I don't have overhead...no storefront, no nothing.

I am referring to medium sized distributors. Yes, these guys have millions in sales. I only deal in electronics. Look man, if you think I just call up and tell them I'm going to throw cash at them go ahead and think that. Your so called "large distributors" will deal with you. All you need is a tax certificate.

 

[Pepsi90919]

sup bitch, weed?

 

[alkemyst]

Originally posted by: CrazyDe1

Think all you want about what I do I could care less. Since when did I say 50k meant anything? 50k doesn't mean anything to Ingram and TechData but you go and drop 50k at a smaller distributor and you'll have an account manager calling you everyday trying to cater to your every wish. Who said I wasn't making a profit? Why are you assuming I'm selling things so low that I'm not making a profit? I don't have overhead...no storefront, no nothing.

I am referring to medium sized distributors. Yes, these guys have millions in sales. I only deal in electronics. Look man, if you think I just call up and tell them I'm going to throw cash at them go ahead and think that. Your so called "large distributors" will deal with you. All you need is a tax certificate.

Did you read what I wrote or do you not comprehend english? I spoke about $50k in relation to just because you (speaking of you in general terms not specifically directly) have $50k outgoing a month does not mean that is net income.

Almost any distributor no matter how large will perk up at a $50k buy...I don't know WTF you are talking about there.

In general you talk about all this money you are making and all these people you have running all over for your buys and sells, but what has anyone seen from you other than how you like to lie and decieve...perhaps it's all a lie.

You are also thinking too specifically to your own little world. Assumptions of account managers and what not. Most large distributors (again I am not talking about glorified resellers/wholesellers) need much more than a tax cert. They will want a business license and proof of business accounts. Definitely if they are offering terms with you (and again many lines of product do not extend credit easily).

 

[NL5]

Originally posted by: alkemyst

Originally posted by: NL5
OK, now that sounds more like it. And, I just found out that they have a local competitor, that I may do business with instead.

And, that's about what I plan on spending to start (10k).

I still don't get the "it's like buying a house or a car"...If I buy a car with cash, they WILL sell it to me. I just can't imagine too many distro's saying no to a 10-25k sale. (unless reputation is at stake if they are high-end)

I was referring to the line "I got $X in CASH!!!!"...to a merchant it's always cash they get, the payments are worked out with the creditor. Now there are fees with a CC use (1.5-3%), but many distributors will require money order, cash or cashier's check for the first few orders.

You can fail with a spare time business. Buying 10k of items and having them sit is a FAILURE. Having them depreciate before sale is a FAILURE. You don't increase the distributor's sales = FAILURE.

I don't think you have really thought this and just want the claim of being a vendor for the company.

Ok, we are saying the same thing I think. There will be NO CREDIT of any kind, I have ample amounts of cash for this to start. And, like I said, if I lose that initial money, it would be a failure. What I meant was, after that investment, on a month to month basis, I will NOT lose money. You would have to understand the entire model of the business I would be into. There is VERY little depreciation. It's not computer parts - they have a RAPID depreciation. It's similiar to diamonds. Lets say I buy a million dollars in diamonds. Now, the value will swing up and down somewhat, but basically, I won't lose my ass. If I buy a million dollrs worth of the latest AMD proceesor, they are only going to devalue, and devalue quickly - not good for a part time business. Do you kinda see what I am saying. Even if it takes a year and a half to sell the 10k, I really won't lose any money, worst case scenario is I unload it all for cheap, and break even - maybe even lose a hair - that's ok. If I told you how much I've lost in the stock market, 10k is would sound like NOTHING (and most of it was in "low risk" type mutual funds - low risk my ass!)

Thanks,

NL5

edit - And, I have thought about this a lot. This would only be a springboard into what I really want to do. I live in the Portland, OR Metro area. There are several million people in the metro area. There is 1 place that does what I want to do, and they don't really do it either. It is a new thing that is just now coming into its own. I see a NEW opportunity on the horizon. I can do it part time to start, and if/when it gets big enough, I can quit my day job. It will have to really take off tho, I do OK on my day job salary...

 

[NL5]

Originally posted by: alkemyst

There were many also that were just happy if I would send certified funds.....

This is what I am hoping......

 

[badmouse]

Pro audio? How high end? One distributor in the US? Here's what I'd do if I were still active in the business - I've been in or near this biz for a LONG time (I was a proaudio distributor, producer, musician, etc):

Go to a retailer - or several retailers. Chat up the salesdude, find out availability, etc. Ask if they give reseller discounts (you may POSSIBLY get better terms from the retailer than you can get from the distributor - don't underestimate them - and the retailer may have a good relationship with the distributor, a useful thing). Learn everything you can about the manufacturer and the distributor. A lot of pro-audio companies are LUNATICS. And if they make do with one distributor, they may not even be interested in your business.

Also, go online and find a proaudio bulletin board and find out everything you can about the manufacturer and the distributor. You need as much information as you can get. This isn't like buying from amazon.com. They may very well not sell to anyone they don't know. The answer to this is to get to know them - ask around for references, remember your good friends at the retailers.

Assuming that they might sell to you and you don't need an introduction, call the manufacturer and try to place an order. GET THE NAME OF WHOEVER YOU ARE TALKING TO. Then, when they say they can't deal with you, call the distributor. Use the name of the person you spoke to at the mfg., say that they referred you and say you are going to place an order for whatever.

You will be paying for it either COD or credit card. You can ask about credit terms (net 30, etc) but don't expect much. BTW if you ask about terms and they say they ship net 30, DON'T ask if they'll do COD instead - duh!

This is a very small field. You quickly get to know most of the people in the business, and we get used to sniffing out the wannabes. Don't freak out because the dudes aren't friendly at first. You'll make friends quickly once you know the ropes. And no faking it.

 

[NL5]

Well, it's pretty high end...not "top of the line", but for what I want to do it kinda is.

You think if I go to a retailer, and tell them I wanna buy like 10k worth of one item they would cut me a big break? It seems to me that this would just be competition for them, although, they will probably figure that I will fail anyway. Will this allow me to be a "licensed" reseller though, with full manufacturer warranties and stuff like that? This isn't some fly-by-night thing I'm trying to do. I am very adept at most aspects of running a business, but, like said, i am not very knowledgable when it comes to retail. I just need to learn a bit (which is basically what you are saying).

Also, from what I have gathered, they are NOT allowed to sell for less on the one item I want to start with. However, they are being sold on the net for about 35% less. I know those guys are still making money, so I figure wholeale is a tad under that. I won't have to move but 1-2 items a month, and I would be doing OK for a side business.

Also, I have discovered thru my DD (if that is what it's called in relation to starting a biz), is that there is a LOCAL manufacturer that makes a similiar product. I may go that route. The actual product is not as important, because that's not really what i will be doing. It sounds kinda weird, but believe me, it makes sense if I explained it all. It would be more of a springboard.

Thanks,

NL5

 

[PC Freak]

Don't worry, thhe Rep you talk to for the Distributor has signed up a good may other companies should have the ability to make you feel welcome. Remember they are trying to get your business so they'll be as helpful as possible.

I've setup several accounts with different Distributor's. It won't be nearly as bad as you think.

 

[NL5]

I'm sure it will be fine...if one dist. won't do it, I'm sure another one will....