How to become an official distributor. Distribution as a full-fledged business. How and where to start - step-by-step instructions

There will always be a buyer for a good product, but what if the buyer is domestic, but the product can only be bought from a foreign manufacturer? Not every potential consumer is ready to go to another country for the product they like, so you can start making money on this desire in Russia. But before becoming a distributor of a foreign company in Russia in 2019, you need to make sure there is stable demand.

Distributor or dealer - work in a chain

Having established contacts with a foreign manufacturer, an enterprising person will need to decide in what capacity he will be ready to work with him. There are two options: dealer and distributor. Unusual to Russian-speaking ears, the words translated mean: merchant and distributor. Despite some similarity of concepts, there are differences between them that determine their functional difference.

Difference in Definitions

Even a superficial knowledge of English will allow you to find translations of foreign concepts that have quickly taken root in our vocabulary since the 90s. And if in the era of the “wild” market no one delved into the details, now the chosen status also determines a set of rights and responsibilities.

Thus, a distributor (general or exclusive) is first of all obliged to organize the distribution of a product or service. This means that a domestic company or individual entrepreneur will be busy forming a network of wholesale or small wholesale distributors, as well as launching an intensive advertising campaign for greater brand recognition.

Contacts with small retail outlets and end consumers are mainly carried out by dealers. It is their responsibilities that include direct direct sales of goods and services.

Difference in rights

If we imagine trade relations in the form of a hierarchical chain, we get a simple sequence: foreign manufacturer - distributor - dealer. Based on the manufacturer’s sales policy, there may be one or several distributors in the country. The number of dealers depends on the intensity of work of the distributor himself. It is clear that commercial success in Russia implies the most developed network of those who work directly with the buyer.

How to organize an individual entrepreneur in Russia for a foreigner

It may happen that a citizen of another country expresses a desire to develop a potential market, confident that his products will be of interest to Russians. If a foreigner does not want to start a large business, but perhaps would like to launch a trial balloon, then the option of registering an individual entrepreneur in his own name is suitable for him.

The legislation of the Russian Federation does not exclude the possibility of official commercial activities of a foreign citizen. To register, he will only need his own and.

A foreigner can quickly and without hassle open an individual entrepreneur online through the proven service “My Business”. All you have to do is register, enter the necessary data, and the system will give you ready-made documents, which all you have to do is print them out and submit them to the tax office.

Become a supplier: the distributor path

Having chosen a foreign manufacturer whose products, in the opinion of the future seller, will be of interest to the Russian buyer, the main thing is to correctly carry out the presentation work and negotiations. A well-written business plan and forecast data on purchases and sales will help you successfully present your company to foreigners.

Many foreign brands have their own set of requirements for potential partners. They can cover more than just financial indicators about minimum sales volumes.

Among the requirements for a future distributor may be wishes for location, availability of warehouses and industrial premises, equipment, personnel and retail space. The demographic and economic indicators of the region may also play an important role.

In addition, before becoming a dealer of a foreign company in Russia, it will be necessary to prove to the manufacturer that the company is able to establish and further develop a partner network.

Variants of work schemes

The form of cooperation between the manufacturer and the official distributor may have several options. A foreign company can choose a Russian distributor as the only one who has the right to import their goods and sell them on the territory of the Russian Federation. He may be given the broadest and sometimes exclusive rights to develop and expand the sales network. There is a scheme in which a distributor is selected for different groups of goods. Division by region is also possible.

Under an agreement with foreign businessmen, the distributor may be obliged to independently organize a network of representative offices and service centers and organize direct sales.

However, most often there are contracts under which the distributor can delegate authority to work with clients to smaller dealers, while he himself will be involved in promoting products and expanding the partner network. With this scheme of work, the distributor will be required not only to intensively search for new markets, but also to provide information support to dealers, organize seminars and representative events.

Documentation of cooperation

After conducting preliminary negotiations and receiving positive reviews of the cooperation proposal, it is time to discuss the draft agreement. According to established practice, a contract with a foreign company stipulates in detail many even small details. Most often it is compiled in two languages ​​(Russian and English).

The main pitfall of such agreements can be considered that in any disputes the text in a foreign language will be taken as the basis. On top of that, lawyers often add a clause on foreign jurisdiction of cases under this document.

A positive aspect of such strictness can be considered a detailed description of all procedures and requirements, a list of information about information support and an appendix to the contract of a list of responsible contact persons.

Work on the basis of a dealer agreement

In addition to obtaining distributor status, a domestic entrepreneur can try to enter into an agreement with a foreign legal entity to work as a dealer. Such cooperation is suitable for those who are ready to work independently in the field of direct sales of imported products, without advertising support and service departments.

This is acceptable in cases where the manufacturer itself already has its own branch in the Russian Federation and is interested in developing a partner network. Most often, a dealership agreement involves work on an advance payment basis. If we are talking about the possibility of paying for a product after its sale and allows the return of illicit goods, then the manufacturer in most cases reserves the right to set maximum prices and return periods.

For an optimal approach to making an informed decision on the form of cooperation, it would be useful to familiarize yourself with information about.

How much working capital will such a business require?

The answer to the question about the costs of promoting products, purchasing several starting and presentation batches of goods, and developing a sales network should be announced at the stage of presenting a business plan and conducting negotiations. A scrupulous approach to preliminary calculation of financial investments is not only useful for ensuring a positive response from a foreign partner, but is also advisable for the potential distributor itself.

The amount of capital investment largely depends on the product being sold, and on the expected distribution area and the extensiveness of the dealer network. It is clear that high-tech gadgets or unique highly specialized equipment cannot be cheap, but the segment of a non-premium clothing brand will be more affordable in terms of material costs and capital turnover rate.

Ways to do business with foreigners without investment

If the preliminary calculation of capital investments before becoming a representative of a foreign company does not correspond to the available savings, draft contracts can be proposed with the distribution of the financial burden between the parties.

To reduce the size of the initial investment, you can try to negotiate a free supply of at least a trial batch of products. Despite the riskiness of such a transaction, the contract can provide for some means of insurance (for example, financial guarantees from a bank or insurance). In addition, this option may become the only opportunity for foreigners to penetrate new markets.

Another way to promote a product without buying it is through an agency agreement. In this case, ownership of the goods does not pass to the distributor; he will receive only the commission specified in the contract.

Typically, the agent's profit is less, but in conditions of a lack of working capital, this option seems optimal.

Pros and cons of working on behalf of a foreign partner

An undeniable advantage of working under the terms of an official representative office is that the distributor is guaranteed support from the manufacturer. In the case of cooperation with a global brand, establishing sales is noticeably easier.

Constraint in decision making may be considered a disadvantage. In the overwhelming majority of cases, the manufacturer rather tightly controls the fulfillment of the image requirements of the contract, insists on increasing the minimum sales volumes, sometimes it comes to applying a system of fines or reducing the amount of remuneration based on the results of the audit sent.

First, you should understand why you need to distribute a foreign brand. Everyone thinks it's easy and simple. They rely on the success of Unilever and Procter & Gamble, not realizing that distribution is a big responsibility.

You need to realize that you will make money in distribution only in the long term, when you learn to negotiate with suppliers and form a customer base. You need to devote all your time to this. This cannot be regarded as an additional business.

Try the product

When you decide on the products you want to bring to the Russian Federation, it makes sense to order testers. Better yet, don’t skimp and spend 100-200 thousand rubles: get a visa to the country where the product is produced and go to the exhibition. Consider different brands, try it for yourself, talk to company representatives. We fly to such exhibitions every year.

Ask the right questions

When choosing a supplier company, I always pay attention to the quality of packaging. People are greeted by their clothes, so I always ask myself two test questions: “Do I want to use this myself?” Second: “Won’t I be ashamed to give this to a loved one?” If both tests are passed successfully, then the product can be considered. But it is important to remember that good packaging does not always mean good quality.

Next, it’s worth talking to the sellers, because when collaborating, you will communicate with them or with managers. If they are friendly and open, that's a plus. You can only evaluate the quality of products through personal examination; I test men’s cosmetics myself.

I bring product testers to Russia and consult with specialists. In our case, I distribute cosmetics testers to barbers with whom we cooperate. They all have a great understanding of the product and trends, and give good advice.

Choose a brand

Sometimes it is better to choose a product that is still unknown in Russia. It will be easier to enter the market with him. Customers are tired of tired and bored brands, and people are looking for analogues. At the same time, a brand with a big name most likely already has distributors in the Russian Federation, and if not, then its conditions will not be the most optimal.

How much to invest?

To become a distributor, for example, of an English brand, you will have to invest at least 2-3 thousand pounds (170-270 thousand rubles). This will be enough to purchase the first batch of goods. This way you can sell it quickly and test the market. Next you need to understand whether the product is in demand and continue the business.

Proper shopping

You have two options for the development of events. The first is to try to invest about 4-5 million rubles in further purchases, depending on the scope of sales and the cost of a unit of production. You buy, bring and resell.

The second option is to negotiate with the supplier for deferment or implementation. It is possible to reach an agreement with a foreign supplier, even if the company does not yet have a recognizable name. But this can only be done with a personal visit to the supplier’s company. If you speak good English, have diplomatic skills and are close to European culture, this will not be difficult for you.

A lot depends on you here. It depends on how you understand the market, the product, how confident you are in yourself and your capabilities. All this is important when you negotiate with a supplier in person. I know cases where almost identical companies agreed on completely different terms with the supplier for an exclusive product.

One company received the product without paying anything and received a line of credit for the product for £30 thousand (2.7 million rubles), and the second itself paid the manufacturer 9-10 million rubles to get the exclusive.

How to negotiate profitably

A company that has its own actual production will offer you much more favorable conditions for deferments, sales and payments. If a company does not produce goods itself, but orders from other factories, then it most likely will not agree to such conditions.

At the same time, listen carefully to the supplier. If they tell you that export is not their main task now, but that the main goal is the development of the local market, there is no need to harbor illusions and fight against a closed door. Look for another supplier.

Clear goods through customs

The most difficult thing is to bring the goods to Russia. Here it is better to use the terms of a broker (a specialist in clearing cargo and goods at customs). He himself will check the documents, control the nomenclatures, and draw up declarations.

At the same time, when clearing products through customs, you are obliged to immediately pay customs duty on all goods and VAT on all imported products. You also pay for delivery and storage services.

Many companies are trying to save on customs and taxes, trying to somehow circumvent these issues. My recommendation - don't! Under no circumstances should you play with the state and taxes. Better form the right price, optimize your business processes and management structure. But you can't escape taxes. The legislative “correctness” of a business is its foundation on which you can calmly build your business further.

In general, there is no need to be afraid of difficulties. You shouldn't go into business if you like to complain. But if you are a stupid optimist, everything will work out.

Let's try to figure it out - who are dealers, what are they for, and what does it take to become one?

Almost every serious company in its development reaches the level where it is necessary to increase the volume of products produced and expand the geography of sales to increase profits. And it is at this stage that the search begins for a person who could promote the product of this company in a certain region of the country or abroad.

So, a dealer is a legal entity or individual who purchases company products at wholesale prices and on special terms and sells them in small wholesale or retail. In other words, it is an intermediary between the manufacturer and the buyer or other intermediaries. Due to the fact that the dealer is the largest wholesale buyer, he has exclusive conditions for purchasing goods, buying them at the lowest prices and with all kinds of discounts.

Such conditions are also beneficial to the manufacturing company, which, in addition to increasing volumes, also receives representation of its product in a new region, while shifting the solution of most organizational issues to an intermediary. In addition, when concluding an agreement, a clause is stipulated on the regularity of purchasing goods, thus relieving the manufacturer from searching for a market for its products.

If you are planning to open an individual entrepreneur, you should know what you will have to pay

Qualities required for a mediator.

Not every person is given the opportunity to reveal himself in the field of trading; for this you need to have certain qualities, without which you should not even start, otherwise you will simply waste your energy, time and money. You can become a representative of one of the most popular cosmetics companies, Avon, and earn money without leaving home on the official website http://myavon-company.ru<

To expect success, you must have the following qualities:

• - Stress resistance;
• - Determination;
• — Competitiveness;
• — Activity;
• — Initiative.

This set of qualities will allow you to achieve success in your business and grow professionally and financially.

Remember that you should simply radiate confidence - “that you are right.” Your task is to convince potential customers that the product you offer is the best and highest quality. If you are negotiating with a representative of stores or other retail chains, then try to make them believe that the products you provide will simply be swept off the shelves. You must be very convincing and have a thorough knowledge of the products you offer in order to persuade them to cooperate with you. Be prepared for the fact that there will be failures, this should not unsettle you, know that “your” client is waiting for you somewhere, you just need to find him. But if you don’t find it, then you can become a representative of one of the most popular cosmetics companies, Avon, and earn money without leaving home, on the official website http://myavon-company.ru

Required documents.

To qualify for a position as a company representative, you need a number of documents, because this is an official business that can bring in serious money.

As a rule, the supplier usually requires compliance with the following conditions for signing a cooperation contract:

• — You must be a legal entity.
• — Mediation agreement.
• — Presence of an office.
• — Availability of a certificate.

In order to enter into an agreement you will need the following documents:

• Passport details.
• Certificate of registration with government agencies.
• Certificate from the tax service.
• Bank details.
• Memorandum of association.
• Dealer Charter.

Permission to sell vehicles from the traffic police (if you decide to work in the automotive business).

You will have to have contracts and documents certified by a notary. And we already know our notary office

Premises rental agreement.

When you have collected all the documents, become an official representative of the company and have concluded all the necessary agreements, do not think that you will be left to the mercy of fate and you will have to cope with the difficulties that arise on your own. Your success as a dealer is an increase in profits for your partners, so they will provide you with support and every assistance.

First steps.

As soon as you have received an assignment in your region, you are faced with the question of what first steps to take in this business so as not only not to go bankrupt, but also to make a profit? First of all, monitor the market in the territory entrusted to you and find out how strong the interest in your product is and in what ways you can boost the level of its sales. Research your main competitors and how they operate.

Try to develop your own customer base and lure customers away from your competitors. Using the Internet, make a list of companies that may be interested in your product; before making an appointment, try to make as many inquiries as possible about your potential client. Based on the data received, choose a course of action during negotiations. The larger your client base, the greater your profit will be, and money, as you know, is a fairly strong motivator.

What criteria are used to choose a dealer?

If you want to work with a large and serious company, you will have to withstand competition from other applicants. In order to have an advantage over them, you need to know what companies look for when choosing a dealer. First of all, this is your experience in this field; the region in which you live is of great importance.

If the company does not have offices in this region, they will be more willing to cooperate with you. You will also be given preference if you already have your own established client base. Much attention is also paid to the business plan you provide, your reputation, the availability of a technical base, qualified workers and the possibility of customer warranty service. So, the better you prepare, the better your chances of getting the job you want.

How much money needs to be invested.

Most people who want to try themselves as a dealer immediately have a question: how much money will I have to invest in this business? There is no definite answer to this question, because many factors influence this, and it all depends on the scheme you use. After all, you may be able to negotiate with the manufacturer to receive products for sale, in this case you will avoid large investments and pay the company after you sell the goods, but the price with this scheme will be slightly higher than if you paid immediately.

If you decide to pay for the goods immediately, then the size of your investment will depend on the type of goods and the volume of the batch you purchase. Don’t forget to take into account the costs of delivering goods, renting warehouse and office space, recruiting employees and legal and accounting support for your activities. A scheme often used is where the buyer makes a pre-order and makes an advance payment to the dealer. By the way, he, in turn, having received the money, pays for the goods to the manufacturer, and the amount remaining in addition to the prepayment is the profit that the intermediary received.

In general, if you do not have enough money, you will have to convince the manufacturer to meet you and choose the option in which you do not have to shell out money right away.

This type of activity has many pitfalls, but at the same time it is very interesting and very profitable. But only a competent approach and comprehensive analysis will allow you to achieve success, because only by overcoming difficulties can you get something worthwhile.

Perhaps after reading this article you will think about not spending your money on a dealership, but just on your favorite company.

The concept of distribution came to us from the English language and became familiar to our ears quite a long time ago. In the most general understanding, distribution is a type of activity in which a business entity purchases a product from a direct manufacturer and undertakes an obligation to him for the retail or wholesale sale of these products. However, this activity also includes other areas of work related to the development and implementation of logistics processes, the organization of distribution networks and the distribution of goods.

Two main views on this small business prevail:

• On the part of the product manufacturer, distribution consists of organizing channels for selling goods and effectively managing their movement from the manufacturer to the end consumer.
• From the side of the distributor himself, this activity is considered as a process starting from the placement of goods on the territory belonging to him and up to bringing the products to the consumer.

Thus, both directions complement each other, and, in accordance with which of them is accepted as dominant, different types of distribution can be distinguished. Legally, even an individual entrepreneur can act as a distributor. But, as practice shows, the most effective way to conduct this activity is by creating a distribution company.

General operating principles

As stated above, in distribution the interests of the manufacturer and supplier ultimately practically coincide. Consequently, the distributor can act both on his own behalf and on behalf of the manufacturer, indicating himself only as a supplier. As a rule, these approaches are combined.

Between the two main business entities - the manufacturer of the product and its seller - a corresponding agreement is concluded, which clearly defines and defines the principles and conditions of cooperation. They can also be considered as step-by-step instructions for creating a company from scratch. This:

• Product cost.
• The amount of surcharges applied for goods sold.
• Conditions for conducting wholesale trade.
• Policy of discounts and preferences.
• General description of the market and its regional distribution.
• Target audience of consumers.
• Procedure and conditions for settlements.
• Timing for the sale of commercial products transferred by the manufacturer to the supplier.

The amount of a distributor’s income depends mainly on how competently he calculates the profitability of the business, what equipment he will use to run it, and whether he will select premises, transport, and staff for it. Most often, the income of an entrepreneur-distributor has a variable value, because it is determined by seasonal factors of consumption, volumes of goods supplied from the manufacturer, and the time of settlement with customers on specific terms for each sale.

Legal regulation

It may seem strange, but Russian legislation does not in any way regulate the distribution agreement. There are no regulations about it contained either in the Civil Code or in other laws and instructions. However, since clause 2 of Art. 1 and paragraph 1 of Art. 421 of the Civil Code of the Russian Federation determines that legal entities and individual entrepreneurs are free to choose the terms of the agreement (except for cases when these agreements contradict existing legislation), then they act as a legitimate legal act that has no restrictions on the territory of our country.

Some features of the legal registration of a distribution company exist in the case when it is engaged in the sale of goods from foreign manufacturers. However, here too, the terms of the contract and other documents require additional elaboration only in connection with the nature of the products being sold.

Distribution pitfalls

As practice shows, this business idea has its pros and cons. According to experts, the main problems that you need to know about even before creating a company and entering the markets are:

• Where to start searching for an intermediary market, and how to organize access to it.
• How to hedge risks associated with distribution activities.
• How to independently assess the prospects of supplied technologies and products.

Opening a company in Russia should be accompanied by an understanding that the domestic distribution market is quite well developed. This is also evidenced by the fact that many product niches have already been distributed and occupied, and stable and long-term relationships have developed between manufacturers and suppliers. However, in the system of these relations there is often a rather low level of professionalism.

The main problem both for novice entrepreneurs who are just thinking about opening a distribution company, and for existing entities, remains the price of the product. This factor creates objective obstacles when working with quality products.

To overcome them, many distributors open parallel training centers where, at their own expense, they help customers understand the advantages of the product offered. It goes without saying that this entails additional costs, and therefore requires a very prudent attitude from the beginning entrepreneur when choosing a brand that he intends to promote in the retail or wholesale markets.

Another common mistake when starting a business is incorrectly assessing the volume of these markets. Among the new challenges for distributors, one cannot fail to mention the high level of competition in certain groups of goods and the lack of freedom in their promotion. This problem can only be solved by a high reputation - that intangible part of a business that is formed over a very long process, but begins from the very beginning of the company’s functioning.

Eventually

Before you open a distribution company from scratch, you should understand that our country represents a huge market for this activity. Therefore, at the initial stage, it is necessary to direct all efforts to developing your data portfolio for effective cooperation and developing competent tactics for interaction with both manufacturers and end consumers.