Things to Know About Starting a Distribution Company or Becoming a Distributor in Malaysia

Starting a distribution company is a profitable business. You require much less capital than someone in the manufacturing industry, yet you can be an entrepreneur in your own right. If you are in Malaysia and are contemplating to start your own business, consider becoming a distributor in Malaysia as a good business option.

A distribution business is successful only if you have a proper strategy in place. You must execute your plans correctly, judge customer needs and market trends, and do all this within your stipulated budget. Even if you have poor marketing skills, but a great product, you have a high chance of getting good profits.

Here are some things you must keep in mind before becoming a distributor in Malaysia:

Select the Right Product

There are numerous products available in the market. You have to select a product with which you have some affinity, that is, you know at least the basics of the product, and one that is always in demand and is likely to remain so in the future too. The product you select should also be low on maintenance and high on quality.

Get a Good Supplier

Once you have selected a product, the next step is to identify a good supplier. A good supplier should give you quality goods at the cheapest unit price so that your profit margins are higher. The supplier should also be willing to take up huge orders at a time and supply them in record time to you. A supplier with his own transportation services is a bonus. If they are ready to drop-ship, then it will be very beneficial for you.

Select a Dealer

Selecting a dealer with good reviews, high credibility, and wide reach is of utmost importance. The dealer should be able to handle multiple customers at a time. Dealers play a very important part of the distribution business. The mode of transportation of products and the mode of payment should be very clear right from the outset.

Arrange Space for the Goods

Distribution is a wholesale business. You are expected to stock up products. For this purpose, you need to rent out or buy storage space. Make sure it is large enough to meet your initial needs. If space is near the factory outlet, it will be an added bonus. Depending on the place, you may need to arrange for security too.

Arrange for Funds

Funding is the most important aspect of any business. Many businesses fail to take off due to lack of funds. You need to calculate how much amount you will require and arrange capital accordingly. You can avail of small business loans to overcome this obstacle. While arranging capital, keep in mind that you will need a working capital too. Once you start the business, you should keep track of the money. You can do it yourself, or outsource it to accountants, or even get an ERP software to do it for you.

Set up an Office

Setting up an office is important, though you can do it at your home too. Setting up an office at home brings down your overhead expenses, but gives you and your business a professional look. Suppliers and dealers/customers find it easy to trust a person with office space.

Register Your Business

Select an innovative name for your distribution business. Register yourself as a distributor in Malaysia with the name of your business at your local administrator office.

Select Mode of Operation

You should decide whether you wish to start from scratch or get affiliated to an established distributor in Malaysia or elsewhere. If you wish to work as an affiliated company, search out business magazines and get names of top distribution companies.

Advertise

Once you start your business, start advertising in various local business magazines. You can also print pamphlets or flyers and distribute it in nearby areas. Electronic mail is another great way to ensure that your potential clients are updated about your business. Newsletters and classified ads are the best possible way to spread the word. You can also hire a search engine optimizer to put your website among the top-rated websites. Keep your customers apprised of new products.

Create a Database

Maintain a database of your suppliers, retailers, and customers. Managing monetary transactions becomes easy once a database is created. You can also source out your loyal customers and give them special discounts or giveaways.

Conclusion

In simple words, a distributor in Malaysia is just a person or a company that purchases goods from a “source” and sells them at a “destination”. At how much price you purchase from the manufacturer and at what price you sell to a customer determines how much profit you will gain. If you have selected a product that perpetually remains in demand, and defined your target market, you have a very good chance of success.