* The calculations use average data for Russia
What are the pros and cons of different ways to find potential dealers and wholesalers? We select the most effective methods for creating and expanding a dealer network.
Sooner or later, any entrepreneur seeking to develop his business comes to the conclusion that the market in one region has a limited number of consumers. One of the most cost-effective ways to expand sales channels is to create a dealer network. But the question arises, where and how to find dealers? And, most importantly, what methods will give the greatest return? Below we have presented the 12 best ways to find and attract dealers.
1. Take part in exhibitions
pros
Qualified industry dealers always take part in specialized exhibitions. Thanks to exhibitions, you can reach professional resellers with extensive experience and clearly advertise your product.
Minuses
The main disadvantage of exhibitions is that they happen infrequently and not everywhere. To visit them, you often have to travel to other cities and regions, incur transportation and time expenses, not to mention the colossal expenses for participation itself and the design of the presentation area. For information on how to take part in such events on a limited or even zero budget, see this material.
2. Post an advertisement looking for dealers
pros
The simplest, fastest and free way to make yourself and your product known is to place online ads on one of the popular classifieds sites. Here you can also try to find people who want to become dealers by looking at advertisements like “I will become a dealer” or “I will become a sales representative”, and offer them your conditions.
Minuses
The main disadvantage of placing an ad is that the very fact of placing an ad in the style of “We are looking for dealers” will indicate that your intentions are not serious. They don’t look for worthy partners this way. Get ready for a lot of calls from people “off the street” who will in no way meet your requirements. Do not forget that advertisements need to be constantly updated, since sites usually limit the posting time.
3. Post information in online catalogs
pros
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Manufacturers have the opportunity to create free pages with information about their company, products and services, news, promotions and leave requests to find dealers. Unlike publishing advertisements, the information is posted by the service administration. Catalogs are one of the most common channels used by dealers and those who wish to become dealers after mastering a new type of activity. Catalogs are a passive but mandatory channel for finding dealers.
Minuses
Your information may go unnoticed among a huge layer of advertisements from other companies. Your business proposal will simply be in the general list and without additional payment you will not be able to distinguish it from others of the same kind. You can only wait for calls that may not come at all.
4. Post information on business forums
pros
Typically, companies developing a dealer network use thematic forums in two ways. The first is to simply place an ad with information in a special advertising topic for finding dealers. The second option is to advertise your product in other topics in some cunning way, risking getting banned. For example, a company representative can “pretend” to be a novice businessman, describe the first steps of his business and, as if by chance, mention the equipment he uses and its advantages. In any case, unlike advertisements, on the forum you have the opportunity to describe your offer in more detail, showing all the advantages.
Minuses
Be prepared to respond to reactions and possibly criticism to your information. Forums are just forums because you can write almost anything on them. There is also a danger of entering into an unfavorable debate with a competitor.
5. Attract competitor dealers
pros
If you know for sure that the quality of your product exceeds that of competitors, you can contact the dealers of this company and offer them your terms. Finding contacts is easy - most often they are listed on the distributor's website. Paying customers will definitely be interested in your offer, and more favorable conditions, including discounts, the first trial batch, and so on, can convince them to change the supplier.
Minuses
Of course, most dealers will refuse to change a ready-made supplier. In addition, a large investment of sales people’s time will be required in negotiating, justifying benefits, etc.
6. Reach dealers through cross-selling
Pluces
It is often worth looking for potential dealers not where it seems at first glance, but somewhere nearby. For example, it is not necessary to look for dealers of computers and laptops among sellers of computers and laptops in a specific region. It is possible that the interested party will be a dealer of printers, copiers and MFPs. Thus, the main advantage is reaching a client with knowledge in this area, real sales experience and the availability of capital resources.
Minuses
Easy to find, hard to sell. Such dealers may have increased requirements for the terms of cooperation, and your offer will most likely not be considered seriously, but as additional income, which you can refuse at any time.
7. Make cold calls
Pros. Finding contacts on the Internet is not so bad. The main task is to make cold calls. It is cold calls that provide relevant contacts of people involved in assortment policy, to whom a commercial offer is sent. Apart from the costs of paying sales staff and telephony, the company usually does not incur any additional expenses.
Minuses. The need to develop a competent and presentable commercial proposal, sales scripts, and the need to attract professional sales managers.
8. Set up contextual advertising
pros
Minuses
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Unfortunately, if earlier, in 2014-2015, contextual advertising was undoubtedly considered the most effective tool, bringing companies a large number of applications at a cost per click of several rubles, but today the return on this channel has decreased significantly. First of all, we are talking about those areas where there is oversaturation of the market, for example, the market for plastic windows, suspended ceilings, building materials, and so on. For these types of businesses, the cost of a click in Yandex.Direct in large regions can reach up to 3 thousand rubles. In addition, to set up good contextual advertising, you need to spend a lot of effort, analyze competitors’ advertising, create a USP for the most pressing requests, and carefully select keywords so as not to engage in “heating the street.” And it is not a fact that the help of “specialists” will be conscientious.
9. Order advertising on federal media
pros
A dealer network implies the company’s expansion into other regions, which means that if you start an advertising campaign, it should be carried out at the federal level, and not at the regional level. By addressing federal media that work on your topic, you make yourself known throughout the country and create a name for yourself in the eyes of potential dealers from other regions. Advertising in federal media will bring the most benefits if you present a new technology or product and are developing a new market with a low level of competition. It is not advisable to reach this level of advertising with an ordinary offer.
Minuses
The first disadvantage is the high cost of advertising, regardless of whether we are talking about banner, native or any other advertising. For example, posting an article on the RBC website costs from 160 to 300 thousand rubles, writing an article costs from 180 to 400 thousand rubles, placing billboards costs about 165-190 thousand rubles/month. The second and key drawback is that no one carries out a targeted search for dealers in the federal media; they are used as image platforms.
10. Advertise on business guide websites
pros
On websites for aspiring entrepreneurs dedicated to starting their own business, such as a website, a company can get access to a potential partner who has both material resources and the desire to start their own business in a specific area of dealership. Advertising is possible in the format of a catalog of offers for dealerships and franchises (along with the largest network companies), and in the format of an article with a presentation of the offer, and in the form of banner advertising. The main advantages of placement are the opportunity to reach the federal level of advertising on a budget compared to federal media (savings on banner advertising up to 80%), to receive a large number of warm incoming applications at a minimum cost per click and powerful image advertising directly among those people who are going to open or expand their business, and don’t just read business news (more than 1 million banner impressions for the target audience per month).
*according to information from commercial offers provided by the media
Minuses
Ready ideas for your business
Often, this is a lack of experience in the required field for those who want to become a dealer, which, however, is compensated by keen interest on the part of the potential partner. If we are talking about advertising in the catalog, then the company will definitely need a person who is constantly involved in processing incoming applications and consulting with interested entrepreneurs.
11. Send mailings to a database of potential dealers
pros
A potential dealer may refuse to cooperate with you, but this does not mean that his contacts should be lost. Time passes, management changes, the market changes. The newsletter is effective in that two or three times a month or more often you can remind potential partners about yourself, sending them not only information about the company with a product catalog, but also articles on your topic. This could be analytical information about the market situation or some practical advice. A meaningful newsletter will definitely work to increase the loyalty and image of the company.
Minuses
The newsletter cannot become the main channel for attracting customers. Even extremely useful content will not guarantee you a high open rate, since the mail of most companies is already overloaded with corporate letters. In addition, you will need to take care of the actual creation of this content, either doing it yourself and acting as an expert, or burdening the sales department or hiring a remote employee.
12. Start a video channel on YouTube/conduct webinars
pros
Large audience reach: more and more people perceive information better through video, and this fact cannot be ignored. In webinars or on your YouTube channel, you can talk in detail about the terms of cooperation and reveal many business issues, from the specifics of your products to sales scripts. As a result, with one hand you maintain the loyalty of existing dealers and work on your image, and with the other, you attract new counterparties to your business who are interested in this area.
Minuses
The amount of time and money spent on developing a YouTube channel or recording webinars does not guarantee you any percentage of return. Most of the most successful channels exist on the sheer enthusiasm of their creators. The presentation of information must necessarily take place in a live format, with feedback, communication with subscribers, with uncomfortable questions, and so on, and all this requires not only great knowledge in one’s field, but also time.
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Dealers are people who take goods in bulk for subsequent resale to sellers or stores individually or in small quantities (and not just drug dealers, as many are accustomed to believe). Most newcomers in this business do not want to make special investments: they are afraid of “burning out” if they suddenly don’t buy the product, there is not enough money to start, or other reasons, it doesn’t matter. For product owners, this desire is often not to their advantage, so there are not many options to implement their plans.
How to become a dealer without investment?
Method one - selling to order
Perhaps you have seen in the price lists of online stores the note “made to order” next to the indicated cost of the product. It means that you must first deposit the full cost of the goods into the seller’s account, and only then, after some time, they will transfer it to you for use. If you look at the situation from a business point of view, it looks like this:
- The dealer enters into an agreement with suppliers for the delivery of goods at the dealer price (in some cases it is possible to work without an agreement).
- The product is offered for sale at the dealer's outlet. More precisely, not the product itself, but the lines in the price list and promotional materials.
- Buyers are charged an advance payment, for which the dealer purchases goods from suppliers.
- The purchased product is transferred to the buyer.
Please note that if you work according to the “made to order” scheme, it is better to cover the market segment of goods in the middle price group (5-20 thousand rubles). It will be easier for customers to buy cheap goods in a nearby supermarket, albeit at a slightly inflated price, but quickly and immediately. If the goods are too expensive, you will have to spend extra money on renting a good office or store. For example, the same car dealers, in order to impress customers, are forced to rent large areas for showrooms.
Method two - goods for sale
Many manufacturers provide for this type of cooperation. The dealer is given a certain time within which he must sell the product. After the established period, you will need to pay for the goods, and the amount will be 1-2% higher than if you paid everything at once, so the risk of “burning out” does not disappear. If you fail to meet the deadline, you will have to compensate suppliers for losses. Only in rare cases can the goods be taken back from you (the terms of return must be specified in the contract).
Method three - free testing
If the manufacturer with whom you are going to cooperate agrees to send free samples of their products so that you can try them “in combat conditions,” then you are very lucky. Most suppliers do not want to work according to this scheme, so the chance to check a product for free is extremely rare.
Method four – become an official representative of the company
By choosing this option, you will receive advertising, information and consulting support, assistance in development, trade organization and, most importantly, a guarantee that the product you are selling will be of interest to the end consumer. In addition, advertising specialists are involved in promoting the product, which saves you from having to do it yourself.
As you can see, it is quite possible to start a career as a dealer without investments, without risking anything (or almost nothing, as in the case of taking goods for sale) and without being obligated to anyone. Of course, you will have to put in a fair amount of effort, which will eventually have to pay off.
Readers' opinions
I read the title of the topic - “How to become a dealer?”, I don’t know about you, but I immediately have associations with drugs.
Qwer, I think that “test in combat conditions” means testing the ability of a product to arouse interest among consumers and its quality, of course, too. If consumers buy the first small batch of goods and speak well of it, then they can safely purchase an even larger batch (this time with their own money) and sell it without any problems. By the way, the dealer, thanks to free samples, can also study the characteristics of the product offered to him for sale.
The idea is good, but there are also a lot of risks. First of all, I think you should study the market and test the quality of the product. In this case, you need to thoroughly study the product you are selling. And only then offer implementation services. In general, it’s a troublesome task, but worth it.
There are risks everywhere. And even more so, dealers, but here usually dealers are not just ordinary people, but those who have been engaged in some kind of art for years. For example, a person who is a fan of paintings can easily become a dealer in this area, since this is his element, and he will not buy low-quality goods for a lot of money.
If you become a company representative, there will be control from the company, which will not have a very good effect on your desire to sell. But less and less is given for the sale of goods every year. If they provided children's goods for sale, I would open a store myself.
Many trading companies offer to become distributors or dealers only to their regular customers who have proven themselves on the positive side on the basis of an agreement concluded with them, but not a single foreign company will give goods for sale to a supplier they do not know; this is very risky for them.
Angelica
For my dacha, I ordered different tools from the factory for cultivating the land. After payment, I was offered to become a dealer in my region. Unfortunately, at that time I could not do this, since I had just bought the product, and it was winter, and I did not test it in operation. Then it was already too late. I checked the markets specifically in the fall and they were already selling their goods with all their might.
Before becoming a dealer (that is, making a good investment financially and organizationally), it is wise to work as a sales agent (that is, the “made to order” option or something similar in essence). Thanks to this, sales tools will be formed and a circle of regular customers will be developed. And in general, you can feel confident in this sales market.
Dara, I was also offered to become a distributor through a company that distributes cosmetics, one of the cosmetic lines, but I was not satisfied with their working conditions. They have a sales plan, and hence bonuses and cash rewards, but this is acceptable for those who are free from other work, and this takes a lot of time.
Angelica
I will be experimenting with different fertilizers this summer. If it works out, I might think about selling it. At the same time, I will conduct an experiment with film and polycarbonate. You can conclude an agreement for the sale of Svetlitsa’s film, this is still rare in our country. But I'm more interested in vermicompost. True, it is expensive and I’m not sure whether they will buy it in the villages.
Dara, why is he so good? It’s just that I also have a problem with flowers, they don’t grow well, they put out leaves, but they don’t bloom. I tried to make different soils, but it didn’t make any sense, they were still capricious. I read a lot of reviews about the HB101 fertilizer, but they don’t send one or two packs, but only a batch.
Angelica
Oh, about the flowers, it’s all chemistry. I bought flowers at the market for planting, they all bloom and are so beautiful and alive. But I planted them from the hypermarket, but they don’t bloom and even grow poorly. I think that initially you need to buy good planting material. Regarding dealership, it’s a good idea, especially since now many products are offered for sale, but it is important to take into account the demand in the region so as not to make a mistake with the niche.
And I have with car dealers. Everyone thinks to the extent of their depravity, as they say. But the “no attachments” label is not entirely appropriate for this topic. You need at least a retail outlet, which is what TS wrote about. And at first, few people will dare to pay you the full amount of the advance payment in the case of “to-order” sales.
Angelica, vermicompost, and specifically even vermicompost contain all the necessary elements for plant nutrition. Plus, this soil is clean from all viral and fungal diseases. No pathogen develops in vermicompost. And now about the flowers. Flowering requires different conditions and the soil and its composition are not always to blame. Sometimes a cold winter is needed for flowering.
Zikam Stone, distributors or dealers, are the same sales workers who have their own property (store, warehouse, outlet), who decide to take a large batch of goods for sale, or purchase it immediately. As for sales agents, their task is to offer manufactured goods, conclude a supply agreement, and control the supply of this type of product. Therefore, in many ways, they have different functions. But both of them are united by the fact that they have a common task, which is to sell goods and find new customers.
Angelica
Don’t think that I’m too picky about the little things, but I’m wondering if there are differences between a dealer and a distributor, I can’t even pronounce this word correctly. Why are the names different if the function is the same? Or is a dealer not a distributor?
I would like to test something for free, a walk-behind tractor for example: rolleyes: .
Dara, this is the same thing, it’s just that now many vacancies are borrowed from other languages, but in fact their meaning and functions do not change, i.e. a wholesale batch of products is taken from the company at one price, and then it is distributed to its clients, but with a preliminary markup . The company encourages those dealers who take an active part in promoting their products and periodically rewards them with a bonus system.
Angelica
The most normal way is to take the goods for sale. Here the profit will depend only on you. If you simply become a representative of the company, you will receive a percentage of sales. He is usually not that tall. And it turns out that you are not running a business, but working for some company.
Dimcha.k, taking goods for sale may be the best way, but no one will simply, without checking you and making sure of your integrity and business viability, dare to entrust you with such a consignment of goods on which you can earn really good money. This is time, and quite a lot. But through a sales office, you can achieve success much faster, even if you don’t have complete freedom of action, especially if you choose the right product niche to work in.