How to become an authorized home appliances distributor?
June 8, 2021 / Industry News
An appliances distributor is the link between the end customers and the manufacturers of home appliances. A distributor purchases home appliances directly from the manufacturer, holds the inventory of the products, provides after-sale services, and sells the products to retailers or end customers. It is extremely important to purchase goods from a “real” manufacturer, instead of another distributor, which means your supplier must have their factory. As a distributor, the competitiveness comes from your professional services, but the price is always an important factor. Therefore, make sure you buy home appliances directly from a manufacturer to keep the prices at the competitive level.
TIP: Don’t just focus on the local market when you try to find a supplier. Sometimes you might notice that it is impossible to compete with some prices in the market. At this time, you need to consider importing goods from other countries which with lower prices, for example, China has now become one of the main countries in the area of manufacturing. And with the lower labor cost in China, the prices of home appliances are at the lower level.
This is a relatively long period since it is difficult to find out a nice supplier who can offer good quality home appliances at a low price. My suggestion here is that quality is the most important factor you should consider while choosing suppliers because there is a balance between price and quality. Now just assume that you were a customer who is looking for a refrigerator, of course, you care about the price, but the quality would be more important. Based on our research, “cost-effective” is the most concerning aspect of the vast majority of customers.
However, how to find a supplier who produces good quality home appliances become another problem. Here are some tips when you choose the manufacturer. Firstly, try to find any information about quality control on their official website. For instance, you can find some content from “about the company” that is talking about the quality control team. Generally, the factory should have a quality control team, because it shows that the manufacturer pays attention to the quality control at least. Secondly, customer reviews are thought to be shreds of evidence and it is easy to get these reviews from Amazon by typing in the brand name if they have shops on Amazon. Besides, if they do not have a shop on Amazon, you could search their brand name on Facebook or any other social media.
Organizational culture is the important aspect you need to concern about. The reason is that once you decide to choose a supplier, it would be long-term cooperation between you and your supplier. Therefore, it is important to understand its organizational culture before you make a decision and see if its culture is yours.
Most people have neglected the importance of corporate culture; however, more and more scholars claim that culture is vital for modern companies. What I can tell you is that every successful company has a strong culture, and the positive and correct value is shared among most employees. Overall, there is a strong connection between the development of the company and organizational culture.
After you look through all details I talked about above, the next step will be the test of their customer service and customer cases. These can reflect the real experiences of working with this supplier.
What I want to emphasize is that the customer service is not only just answer your questions in time, but the services they provide. After you establish an authorized relationship with the home appliance manufacturer, you will usually receive direct training from the manufacturer on how to use its products and other information about the home appliances. But these are very basic services that almost all manufacturers will provide. Based on my research, some home appliance manufacturers are providing more practical services such as marketing support. I believe marketing is extremely important and difficult for every distributor, so if the manufacturer could provide good marketing solutions and ideas, it would be useful because the manufacturer knows more about the products as well as the market, besides, the manufacturer has more experiences so the solutions they provide will have the high reference value.
When all things are ready, and you finally find your “Mr. Right” manufacturer, now it’s time to have contractual authorization to sell its home appliances. Tip again! My suggestion here is that since you have decided to be a distributor, it is better to obtain the exclusive right to sell the product in a particular region. The advantage is that this exclusive right gives your customers peace of mind knowing that they are working with a company with direct access to the manufacturer. In addition, as there are no competitors in this region, the competitiveness will be relatively lower.
You are about to have your own business and become rich! But calm down and there are still a lot of professional works to do.
First, you should do a detailed environmental scanning of the products you have chosen. Generally, people should do the environmental scanning for both the industry and products, but you have decided to get into the home appliance industry, and I can tell you it is a good choice. If you want to know the reason why the home appliance industry has an uptrend, please read another article in our official web. Environmental scanning is an important procedure for distributors as it helps identify and analyze the internal and external factors that may potentially affect a company’s decision-making. (Albright, 2004)
Regarding the external analysis, PEST analysis and Porter's five forces will be applied and for the internal analysis, a SWOT analysis will be used. The PEST analysis includes 4 aspects which are a political factor, economic factor, social factor, and technological factor. Porter’s five forces theory contains the threat of new entrants, supplier power, buyer power, industry rivalry, and the threat of substitutes. By applying these two methods, you can easily analyze your products in the market. In another word, you can choose the products based on your analysis.
According to Entrepreneur, the best way to find out what products are undeserved in your desired area is to thoroughly research your potential customers and their needs. So, you need to know what type of home appliances are popular in the local market. But usually, many sellers are selling these types of products. Then how do find out profitable niches? My suggestion is that you don’t have to sell the most common products but focus on the “blue ocean” market where the competitiveness index is relatively lower. For instance, it is super hard to grab market share in those high-end markets and it is unlikely to be successful. Hence, you should concentrate on another market such as highly cost-effective home appliances. The quantity demand in this market will be much stronger and competition will be lower.
Second, once you decided which market segment you want to engage in, you need to define your customers and find a location. Although you can start from home, to be truly successful, you will need to buy or rent a warehouse to stock your products. Consider warehouses in areas that are not too expensive or too far away from shopping areas and close to your desired customer base. Being close to customers is extremely important.
Starting your own business is never easy. But life is full of challenges, isn’t it? Everything comes to him who waits. If you run your business carefully, success is not hard. Becoming a distributor is a good idea to start your own business, however, there are other choices you can choose to be such as having your brand. Read this article to know more about how to have your brand without funding a factory. (OEM Service)