I want to be a distributor. Distributor of a foreign company in Russia: how to start a business not from scratch. Options for work schemes

Let's start with what a distributor is. Translated, it means "distribution". In reality, the distributor is a legal entity engaged in the sale of consumer goods, which are acquired through the sale and purchase and a special agreement of any period at their own expense and with the further sale of the goods. Sales can be anything: wholesale, network, retail, etc. But in any case, the pricing policy is conducted or based on the recommendations of the manufacturer of the goods.

To understand how well a particular distributor is performing, indicators such as the sales volume of the product and the level of distribution (both in quality and quantity) in the territory assigned to the distributor are checked. The distributor begins its work as soon as the purchase of goods for its further resale is made. Distributors can distribute goods in a certain territory themselves, or hire intermediaries or their own agents for this.

To become a distributor, you must first find a manufacturer of goods. As soon as you find a suitable company, make up for them commercial proposal to cooperation. What to include in this proposal:

1. Important information about your company or entrepreneurship (as you remember, only a legal entity can be a distributor);

2. Scope of activity and territorial distribution;

3. Turnover of the company, its mobility;

4. Clientele (it is very important to indicate and tell in detail about your clients in order to attract interest to yourself).

In addition to such a proposal, it is necessary to prepare an overview of the market you are interested in, study its subtleties, collect sales volumes of the goods, process the territorial pattern, etc. If, for example, you want to work not in a specific region of the city, but want to become a regional representative (remote city), then you will interest the manufacturer of the goods with your knowledge about the region and the demand for goods in it.

Always be interested in the product from the manufacturer, even if you yourself have already learned everything. Ask as much as possible, but on the topic, show your interest. Questions may relate to both the product and its quality, delivery and supply, advertising, logistics, competitiveness, loyal conditions and offers. Next comes the most important thing in how to become a distributor: the organization of the initial contact of the goods with the clientele. The easiest way to do this is to participate in an exhibition of a similar product. So you can learn about competitors, show your product face and find customers. Suppose you have already established the necessary contact, which means that it is time for negotiations leading to a distribution agreement. The main thing in this moment is not to spoil the connection between you, but to establish contact to an ideal state.

Distribution in the modern world

So, having concluded an agreement with the manufacturer, you become the official distributor of the product and receive a certificate of conformity. A distributor can be general or exclusive. You can work in two ways. The first is buying a product from a manufacturer at a distributor discount and getting free samples of the product. The second scheme of work is represented by the establishment of a new enterprise, which becomes a subsidiary of the manufacturer. Also a popular option for today is the equity participation of the distributor.

Despite the fact that you have free samples of goods, this is not enough to get started. You will need to purchase the first batch of goods from the manufacturer. You need to offer it to your clients. So, if you want to become a distributor, you must have initial capital, at least for the purchase of goods.

Why is distributorship so popular in modern society? The fact is that this work does not take much time, it can only be a part of your income, extra income or main. Recently, more and more girls and women involved in the sale of cosmetics have become distributors, which benefits other women and gives pleasure to the workers themselves. The distributor's income depends directly on sales, and sales, respectively, on how much time you devote to work.

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

Distributor or Dealer – work in the 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. The words, unusual for the Russian-speaking ear, in translation 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 a translation 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 obligations.

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 wholesalers or small-scale wholesalers, as well as deploying an intensive advertising campaign for greater brand awareness.

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

Difference in rights

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

How to organize an IP in Russia for a foreigner

It may happen that a citizen of another country will express a desire to develop a potential market, confident that his products will be of interest to Russians. If you start big business a foreigner does not want, and may wish to launch a trial balloon, then the option of registering an IP in his own name is suitable for him.

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

A foreigner can quickly and without hassle open an IP online through the proven My Business service. It is enough to register, enter the necessary data, and the system will give you ready-made documents that you only have to print and submit to the tax office.

Become a Supplier: The Distributor Journey

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

Many foreign brands have their own set of requirements for potential partners. They can cover not only financial indicators about the minimum sales volumes.

Among the requirements for a future distributor, there may be wishes for the location, the availability of warehouses and industrial premises, equipment, personnel and retail space. Demographic and economic indicators region.

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.

Options for work schemes

The form of cooperation between the manufacturer and the official distributor may have several options. A foreign company may elect a Russian distributor as the only one entitled to import their goods and sell them on the territory of the Russian Federation. The broadest and sometimes exclusive rights for the development and expansion of the sales network can be transferred to him. There is a scheme in which different groups goods are selected by their distributor. Regional division is also possible.

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

However, most often there are contracts under which the distributor can delegate the authority to work with clients to smaller dealers, while he himself will be engaged in product promotion and expansion affiliate network. With such a scheme of work, the distributor will need not only an intensive search for new sales markets, but also information support for dealers, organization of seminars and representative events.

Documentation of cooperation

After conducting preliminary negotiations and receiving positive reviews of the proposal for cooperation, 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, often lawyers add a clause on foreign jurisdiction of cases under this document.

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

Work on the basis of a dealer agreement

In addition to obtaining the status of a distributor, a domestic entrepreneur can try to conclude an agreement with a foreign legal entity about working 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 territory of the Russian Federation and is interested in developing a partner network. Most often, the dealer agreement implies work on an advance payment. If we are talking about the possibility of paying for goods after their sale and allows you to return illiquid assets, 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 product promotion, the purchase of several starter and presentation batches of goods, the development of a distribution network should be announced at the stage of presenting a business plan and conducting negotiations. A scrupulous approach to the preliminary calculation of financial investments is not only useful for ensuring a positive response from a foreign partner, but also expedient for the potential distributor himself.

The amount of capital investment largely depends on the product being sold, and on the expected territory of distribution and the branching 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 the rate of capital turnover.

Ways to do business with foreigners without investments

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 delivery of at least a trial batch of products. Despite the riskiness of such a transaction, the contract can provide for some kind of insurance (for example, bank financial guarantees or insurance). In addition, this option may be the only opportunity for foreigners to penetrate new markets.

Another way to promote a product without purchasing it is an agency agreement. At the same time, the ownership of the goods does not pass to the distributor, he will receive only the commission specified in the contract.

Usually the agent's profit is less, but under conditions of shortage working capital this output seems to be optimal.

Pros and cons of working on behalf of a foreign partner

The indisputable advantage of working on the terms of official representation is that the distributor is guaranteed the support of the manufacturer. In the case of cooperation with a global brand, the establishment of sales is noticeably facilitated.

The disadvantage may be considered stiffness in decision-making. In the vast 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 verification sent.

The term distributor is familiar to many professional entrepreneurs and ordinary citizens, and the latter is often associated with myths and misconceptions, which we will try to dispel in this article.

Who is a distributor?

The distributor is an intermediate link between the manufacturer of a certain product and its final consumer, whose activity is to sell goods in a certain territory. Distributors are official representatives of companies and are entitled to trademark protection or trademark.

These representatives are divided into:

General– get the right to sell products, using their own infrastructure and resources for this;
Exclusive- usually act as representatives foreign companies and sell goods through an established network of dealers and retailers.

What does a distributor do?

A distributor is an official representative of a manufacturer of products who sells them to wholesalers and retailers, less often to end consumers.

The complete chain of sale of goods is as follows: manufacturer-distributor-dealer-retailer-consumer. On the other hand, some companies change their own this system removing some elements.

The list of duties of a distributor depends on the nature of the products being sold. Sales of small quantities of expensive goods can be carried out by one person, if he is able to find a sales market, has the right to conclude contracts, and has some knowledge in the field of marketing. However, when distributing a mass product, a whole staff of employees and representative offices in several regions of the country are needed, connected by logistics chains of transportation and supply.

The activities of a dealer and a distributor are similar in many ways, but the latter makes a profit by buying the manufacturer's product at a discount and selling it at full price. The income of the dealer is formed from the margin, which, under the conditions market economy limited only by the demand for the product.

Distributor Responsibilities:

Marketing promotion of products;
Transportation and supply of goods with the return of the barracks and containers;
Formation of a distribution network and establishment of transport logistics;
Control of supply and stocks of products;
Warehousing and storage of purchased goods, as well as ensuring their protection;
Compliance with the implementation of the quality standards of the manufacturer;
Conclusion of transactions relating to property rights to the products sold;
Formation of the final price per unit of goods.

How difficult is it to become a distributor?

Who is a distributor and what does he do, we told, now we will find out how to become a distributor. To distribute a manufacturer's product, you need to conclude distribution agreement, the result of which is certificate the right to officially represent a trademark or trade name. Distributor Agreement - legal contract, which indicates the procedure and volumes of purchases, the percentage of discounts and the cost of products purchased from the manufacturer, the conditions for the return of illiquid assets, liability for non-compliance with quality standards and other essential conditions.

Most manufacturers provide a model distribution agreement with standard terms and prices, which can be found in advance from official documents or publications on the company's website.

The agreement may also specify the requirements for the distributor, as a rule, they depend on the quantity, cost and features of the products. A popular trade name with an established production system may require the distributor to:

Availability of transport infrastructure for deliveries;
Warehouses and storage facilities that meet certain standards;
Purchases of large volumes of products (and therefore the availability of funds);
A staff of competent staff to carry out the agreement.

To get a status exclusive distributor of a foreign company additionally, knowledge of the language of the country of origin, the ability to frequently fly / move to negotiate and solve other problems, as well as experience in product distribution and good sales performance will be required.

When these requirements are met, legal or individual may obtain the right to represent a foreign manufacturer and, in fact, become a monopolist in the sale of its products in the territory of its own country, which will provide large incomes.

How to become a distributor?

Distribution - professional activity distribution of goods which require resources and knowledge to implement. It is extremely difficult to become a distributor without initial investment and a developed infrastructure for storing and transporting goods, especially when it comes to cooperation with foreign companies. However, the sale of the manufacturer's products can bring a good profit in the absence of the need to establish and control the production process.

Let's try to figure it out - who are dealers, why are they needed and what is needed in order to become one?

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

So, a dealer is a legal or natural person who purchases the company's products at wholesale prices and at special conditions and selling it 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 the purchase of goods, buying them at the most low prices and with all sorts of discounts.

Such conditions are also beneficial for a manufacturer of products, which, in addition to increasing volumes, also receives a 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 the purchase of goods, thus saving the manufacturer from searching for a market for his products.

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

Qualities necessary for a mediator.

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

To be successful, you must have the following qualities:

- Stress resistance;
- Purposefulness;
— Competitiveness;
— Activity;
- Initiative.

This set of qualities will allow you to succeed in your business and grow in career and financial terms.

Remember that you should simply radiate confidence - "in your rightness." 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 have to be very persuasive and know the products you offer to perfection 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 become a representative of one of the most popular Avon cosmetics companies, and earn money from the comfort of your home, perhaps on the official website http://myavon-company.ru

Required documents.

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

As a rule, the supplier usually requires the following conditions to be met in order to sign a cooperation contract:

- You must be a legal entity.
- Mediation agreement.
- Presence of the office.
- Having a certificate.

In order to conclude an agreement, you will need the following documents:

Passport data.
Certificate of registration in state bodies.
Certificate from the tax office.
Bank details.
Memorandum of association.
Dealer charter.

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

Contracts and documents you will have to certify at the notary. And we already know our notary office

Room lease agreement.

When you have collected all the documents, become the official representative of the company and 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 on your own. Your success as a dealer is an increase in profits for your partners, so they will provide you with support and all kinds of assistance.

First steps.

Once you have been assigned to your area, the question arises before you, what are the first steps to take in this business, so as not only not to burn out, 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 its sales level. Study the main competitors and how they work.

Try to develop your own customer base and poach customers 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 much information as possible about your potential client. Based on the data received, choose a course of action - when negotiating. The larger your customer base, the greater your profit, and money, as you know, is a fairly strong motivator.

What are the criteria for choosing a dealer?

If you want to work with a large and serious company, you will have to compete with 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 representative offices in this region, they will be more willing to cooperate with you. You will be given preference even if you already have your own established client base. Much attention is also paid to the business plan provided by you, your reputation, the availability of a technical base, qualified employees and the possibility of warranty customer service. So - the better you prepare, the more likely you are to get the job you want.

How much money needs to be invested.

For most people who want to try themselves as a dealer, the question immediately arises, how much will I have to invest in this business? There is no single answer to this question, because many factors influence this, and besides, 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 under such a scheme will be slightly higher than if you paid immediately.

If you decide to pay for the goods immediately, then the amount of your investment will depend on the type of goods and the volume of the batch you purchase. Do not forget to take into account the costs of shipping goods, renting warehouse and office space, recruiting employees, and legal and accounting support for your activities. A scheme is often used whereby the buyer makes a preliminary 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 your needs and choose the option in which you will not have to shell out 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 a comprehensive analysis will make it possible 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 simply on your favorite company.

Our Russian consumers have long been accustomed to imported goods and they are always in good demand. Therefore, the profession of a distributor is actually very much in demand.

Today we decided to talk about how Russian distributors actually work with foreign manufacturers. This area is not often talked about, but this activity is very profitable and the Russian market needs such professionals. Today we will talk in detail about the intricacies of this profession and how to start working in this area.

Main functions of a distributor

In general, the primary task of a distributor is to maximize the expansion of the sales regions for any product. Usually, the distributor is an intermediary between the manufacturer and dealers who are already engaged in the direct sale of goods to end customers. Therefore, the functions of a distributor usually also include the creation of a dealer network. One or more distributors may work simultaneously on the market of the importing country, it depends on the demand for this particular product from our customers.

Thus, the distributor creates a market for the foreign manufacturer's products in our country, and the greater the capacity of this market, the larger the regional dealer network, the higher the distributor's income.

The distributor himself, after the creation of a dealer network, may no longer engage in direct sales at all, his main function is only to maintain the functioning of the sales chain he created and receive income from the total trade turnover of the goods sold.

Depending on their intentions and the agreement with the product manufacturer, the distributor can become a general importer for this foreign manufacturer, develop additional services or, for example, arrange the supply of components. In this case, the distributor's duties will also include a warranty exchange of low-quality goods, components and spare parts.

Typically, manufacturers have standard distribution agreements that contain a set of specific conditions, often with specific requirements related to the legal practice of a given exporting country and product features. Often, the contract with the manufacturer also contains an indication of the volume of products that the distributor needs to sell for a certain period of time. All this must first be clarified and carefully studied all the conditions of future contracts.

When creating a dealer network, a distributor must understand that in the future a lot will depend on the partners-dealers selected by him, because further on they will represent the foreign manufacturing company to the end buyer.

Therefore, the distributor must take care of conducting the necessary advertising and marketing campaigns in order to create the image of a product manufacturer and promote it in the domestic market.

How and where to start - step by step instructions

Where to begin:

First you need to decide in which industry and what product you would like to work with;
To study the current situation with supply and demand for these products in the Russian market;
Select a foreign manufacturer of these products;
Then you need to carefully study the conditions of work of this manufacturer with distributors, perhaps ask to send a standard contract by e-mail;
If at first glance your project looks profitable and realistic, then you can start drawing up your business plan;
When drawing up a business plan, you need to calculate all the main financial components of your future project as accurately and in detail as possible, calculate the main income and expense items, take into account possible risks;
If the business plan has shown that your project is profitable, then you can safely proceed to its practical implementation - your official registration as a businessman (opening an LLC or IP), concluding agreements with partners, organizing an office and a dealer network.

Some subtleties of the organization of the distributor's work

First you need to find a suitable foreign manufacturer. First of all, choose your field of activity, determine an approximate list of goods, the sale of which is in demand by the market and can bring good profit. Then look on the Internet for data on sales and manufacturers on business sites (for example, the international site all.biz, the European site eurolots.com, the Chinese site aliexpress.com), and also find the contacts of suppliers on the sites.

Additional information about a potential foreign partner can be found on the websites of various websites, for example: www.ved.gov.ru, creditreform.com, europages.com.ru.

Then you need to study the preliminary general conditions of the supplier, compose and send him an e-mail - your preliminary commercial offer "in the most general terms."

Usually, the distributor's working conditions are determined by his status (general, exclusive) and the terms of the contract concluded with a foreign manufacturing company. The key responsibility of the distributor under such standard contracts is the organization of a distribution and marketing scheme for the manufacturer's products, the provision of related services.

There is a generally accepted organizational scheme: foreign manufacturer - distributor - dealer - buyer.

There are two generally accepted options:

general distributor, this is when the importer is engaged in the sale of goods in his country according to his own scheme, independently or by organizing a dealer network;
exclusive distributor, in this case, the transfer of rights to distribute imported products occurs only within the region specified in the contract with the manufacturer and without the involvement of third parties. In this case, the distributor can usually already work with only one supplier - a foreign manufacturer.

As a rule, the sale of goods and services to retail outlets and specific retail customers, as well as all the necessary interaction with them, is already carried out by a dealer hired by a distributor.

It is the responsibility of the dealer to sell directly, not the distributor, and it is important to always keep this in mind when organizing and ensuring the effectiveness of the sales scheme. Only a clear delineation of all responsibilities and functions allows you to create and maintain effective business projects.

Based on the specifics of the products and the current situation on the market, a foreign manufacturer may have one or several distributors, which also determines the main terms of the contract between the manufacturer and the distributor. The current market situation and the specifics of the goods also determine the conditions for organizing the dealer network and the intensity of the work of the distributor itself.

Some foreign manufacturers already have some kind of representative office or just an office in the importing country, then it is quite easy to establish cooperation with the supplier manufacturer, since the company representatives are already familiar with the peculiarities of the work of the Russian business and it will be easier and faster for you to agree on everything with them .

If a foreign company does not have any representatives in our country, then establishing contacts will require much more time and good command of a foreign language. First of all, it will be necessary to study the specifics and basic conditions for the work of a foreign company with distributors, as well as familiarize them with the peculiarities of Russian conditions. In this case, you will also need to make several foreign business trips, conduct presentations in a foreign language. Such negotiations and approvals require considerable time and additional efforts - you will have to study a lot of additional information on your own, be ready to explain a lot and convince partners of the project's economic viability, and you will have to negotiate at the international level and according to international business standards.

Here it is very important to competently prepare and conduct negotiations and presentations to foreign potential partners. It is very important to study all the nuances of cooperation, prepare a competent business plan and presentation, and present a forecast plan for purchases and sales.

But the complexity of direct preliminary international negotiations with a foreign manufacturer that does not yet have a representative office in our country will then pay off, this will allow you to continue to speak on his behalf at all events held in our country and exclusively represent his brand.

It is necessary to say a few words about the organizational and legal form of the distributor, foreign partners, partners and buyers in our country are always more willing to interact with legal entities than with individuals.

To engage in distribution activities, it is better to choose the organizational and legal form of the legal entity “LLC” than an individual entrepreneur, this is more familiar to partners and causes more confidence. For dealers, both forms of “LLC” and “IP” are quite acceptable.

The legal form of a dealer rather depends on the business personal qualities of a businessman, and the regional specifics where he operates.

It is important to know that some foreign companies already have their own list of requirements for potential partners, as well as approximate schedules and volumes of deliveries of their products through export channels, requirements for financial performance, the volume of consignments of goods, minimum deliveries and sales.

Sometimes foreign manufacturing companies put forward requirements for distributors in terms of their regional location, availability of warehouse and retail space, technical equipment, and even impose some requirements on personnel.

Some foreign partners make their own forecast plans for the sale of products, use Russian statistics on economic activity in a particular selected region, demographic situation, and demand for similar products.

Foreign companies always use well-calculated business models, and therefore, it is necessary to be ready to correctly substantiate their position in negotiations, provide various additional data, provide explanations, and convince them of the mutual benefit of the upcoming partnership. During the negotiations it is also important to show that you will be able to organize an effective dealer network, arrange sales of products in the required volumes, maintain and develop the regional network in the future.

The distributor, being the official representative of the manufacturer, as a rule, can count on its commercial support. We also note that, often, international nonsense is interesting to consumers in itself, it may already be known and has proven itself well, perhaps many consumers would like to purchase such products.

Possible schemes of work with foreign manufacturers

Sometimes a contract with a manufacturer can impose rather strict conditions on the distributor and limit the freedom to make his independent decisions, it is also possible that the supplier may impose penalties if the terms of the contract are not observed, the minimum level of sales. This must always be taken into account. And sometimes, on the contrary, the distributor is given the broadest powers.

As already noted, sometimes foreign manufacturers prefer to work with only one Russian distribution partner, and sometimes large manufacturing companies choose distributors for each specific group of their products or for regional segments.

Some distribution agreements stipulate that the responsibility of the importer-distributor includes the organization of brand representative offices in their country, as well as service centers and regional points of sale. But usually, nevertheless, distributors work through dealer networks and do not engage in direct sales. In this case, the main functions of the distributor are the organization of a dealer network, regional expansion, advertising promotion of products, organization of presentations and other events related to attracting new consumers. All these conditions are negotiated with a foreign partner in advance, even before the conclusion of the contract.

The conclusion of a contract is a very important and responsible event for a distributor, since international contracts usually provide for the presentation in the contract of the smallest details of cooperation between business partners. International treaties are usually drawn up in two languages, usually English and Russian.

In the event of various disputes, foreign partners usually rely on the text in English. In addition, they immediately prescribe in the contract the consideration of all disputes in foreign jurisdictions. You need to know this and be ready for it.

Some domestic entrepreneurs choose for themselves a scheme of cooperation with a foreign manufacturer under a dealer agreement. That is, they are ready to combine both dealer and distributor functions, but conclude a "dealer" agreement, which is usually more "flexible", giving more freedom of independent actions to the entrepreneur. But we note that usually according to this scheme, more attention will need to be paid to direct sales, less opportunities for advertising and service support from a foreign manufacturer. It is also important to note that such contracts provide for the delivery of goods on an advance payment basis. There may also be some additional conditions on the timing of the return of defective or illiquid products and other restrictions. In some cases, such a scheme of work may not be very acceptable.

In any case, no matter what scheme of work you would choose for yourself, it is necessary to study in advance, stipulate and clearly spell out in the contract all the conditions of the partnership.

How much money should be invested and is it possible to do without capital investments

In general, the organization of any business requires at least a minimum investment. If you do not have the ability or desire to make the necessary start-up expenses, then in this case, then offer your foreign partner the distribution of upcoming financial expenses between the parties or postpone them in time. For example, you can ask for a trial delivery of goods with a deferred payment or with payment after the sale, that is, after receiving the proceeds from the sale.

This option is quite acceptable if the contract is concluded with the provision of bank guarantees or additional insurance for the delivery of goods.

If you correctly prepare all the necessary papers, then foreign partners may well agree to work according to this scheme.

There is also the option of concluding an agency agreement. In the case of the implementation of such an interaction scheme, the ownership of the goods remains with the manufacturer, and the distributor receives only his agency fee (commission). Perhaps the agency fee is less than the estimated income of the distributor, but it allows you to do without the "start-up" costs.

"Start-up" costs usually include the following costs:

the cost of preparing a business plan;
expenses for presentation preparation and advertising;
travel expenses;
purchase of a trial batch of goods;
fare;
office rental expenses;
warehouse rental costs;
other organizational expenses.

The size of the required “start-up” costs depends largely on the products you choose and the expected scale of the activity.

You can reduce initial costs if you do most of the work yourself, without involving additional personnel, as well as carry out sales through your own website or websites of online stores, negotiate direct deliveries from the manufacturer at the time you need and self-delivery.

Business plan

A business plan is a very important document that allows you to clearly calculate the main financial indicators of a future project. In addition, another important task of the business plan is the presentation of the business project to potential partners of the distributor. A well-written and accurately calculated business plan is in many ways the key to the successful implementation of any project.

Any business plan should include the following sections:

Project summary - here it is necessary to give a general description of the project;
Marketing plan - this section should include an assessment of the current market situation for this product, an analysis of supply and demand, it is desirable to present an analysis with data on specific regions, the target audience. Analytical and statistical information for this section, at the initial stage, can be taken from the Internet;
Organizational plan - in this section it is necessary to outline and calculate the scheme of your forthcoming distribution activities;
Risk assessment - in this section of the plan, it is necessary to indicate and evaluate possible potential risks for this type of activity, as well as suggest ways to minimize them (for example, risk insurance);
Conclusion - here it is necessary to give a general assessment of the economic feasibility of this project, to show its profitability.

In fact, for distribution activities, the main cost section is the “Organizational Plan” section.

This is explained by the fact that the costs of Marketing, namely marketing analysis, can be done independently using the Internet, and the costs of online advertising are minimal (set your own any amount that is acceptable to you).

Risk assessment is, as a rule, only approximate estimated amounts. You can issue bank guarantees. It is possible to conclude insurance contracts with insurance companies, but this will already require some costs.

Purchase of a consignment of goods 1 million rubles;
Office rent - 100 thousand rubles;
Payment of utility bills and communications - 12 thousand rubles;
Warehouse rental - 100 thousand rubles;
Transportation costs - 30 thousand rubles;
Salaries of employees - 150 thousand rubles. (3-5 people);
Payment of taxes and fees 40 thousand rubles;
General organizational and economic expenses - 20 thousand rubles;

Thus, we received a very approximate amount of total costs - 2,352 thousand rubles.

Conclusion

As you can see from our brief business plan, the bulk of the costs are for the purchase of a trial batch of goods. This item of expenditure depends entirely on the type of goods and can vary greatly. In addition, as we said above, there are quite acceptable options to negotiate with the manufacturer on deliveries without making an advance payment.

This is followed by an expense item for renting an office, but now most of the work can be done at a home computer or renting an office with a minimum area - this will significantly reduce the cost of this cost item.

The cost of renting a warehouse can be removed or at least reduced by organizing direct deliveries to retail outlets or dealerships. Transportation costs can also be greatly reduced if these costs are shifted to dealers, and import deliveries can be more carefully scheduled. Additionally, you can save a lot on current expenses if you do not inflate the staff and effectively build the entire organizational structure and sales chains.

Distributor activity is just such a type of activity, where the initial investment and current costs are largely determined by the businessman himself.

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