distribution business plan example

Distribution Business Plan Template

Written by Dave Lavinsky

Distribution Company Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their distribution businesses.

If you’re unfamiliar with creating a distribution company business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to easily write a distribution company business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Distribution Company Business Plan?

A business plan provides a snapshot of your distribution company as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Distribution Company

If you’re looking to start a distribution business or grow your existing distribution company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your distribution company to improve your chances of success. Your distribution company business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Distribution Businesses

With regards to funding, the main sources of funding for a distribution business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for distribution businesses.

Finish Your Business Plan Today!

How to write a business plan for a distribution company.

If you want to start a distribution company or expand your current one, you need a business plan. The guide below details the necessary information for how to easily write each essential component of your distribution company business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of distribution business you are running and the status. For example, are you a startup, do you have a distribution company that you would like to grow, or are you operating a chain of distribution businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the distribution industry.
• Discuss the type of distribution business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of distribution business you are operating.

For example, you might specialize in one of the following types of distribution businesses:

• Exclusive Distribution Business: Operates as the sole distributor for its client in a specified region.
• Direct Distribution Business: Sells products directly to retail stores.
• Selective Distribution Business: Typically operates in niche industries with limited retailers.
• Intensive Distribution Business: Provides distribution services to a high number of retailers.

In addition to explaining the type of distribution company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of retailers secured, reaching $X amount in revenue, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the distribution industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the distribution industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your distribution company business plan:

• How big is the distribution industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your distribution business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your distribution company business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, organizations, government, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of distribution business you operate. Clearly, schools would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other distribution businesses.

• What types of customers do they serve?
• What type of distribution business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a distribution company business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of distribution company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide exclusive distribution services, selective distribution services, intensive distribution services, or direct distribution services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your distribution company. Document where your company is situated and mention how the site will impact your success. For example, is your distribution business located in a busy retail district, a business district, or a standalone office or warehouse? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your distribution company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your distribution business, including answering calls, scheduling shipments, billing clients and collecting payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your distribution business to a new city.  

Management Team

To demonstrate your distribution company’s’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing distribution businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a distribution company.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your distribution business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a distribution company:

• Cost of equipment and office supplies
• Cost of rent or mortgage on a facility
• Cost of purchasing and maintaining trucks/trailers
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a copy of the wholesaler and auto insurance policies you’ve purchased.  

Writing a business plan for your distribution company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the distribution industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful distribution company.  

Distribution Company Business Plan Template FAQs

What is the easiest way to complete my distribution company business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your distribution company business plan.

How Do You Start a Distribution Company Business?

Starting a distribution company business is easy with these 14 steps:

• Choose the Name for Your Distribution Company Business
• Create Your Distribution Company Business Plan
• Choose the Legal Structure for Your Distribution Company Business
• Secure Startup Funding for Your Distribution Company Business (If Needed)
• Secure a Location for Your Business
• Register Your Distribution Company Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Distribution Company Business
• Buy or Lease the Right Distribution Company Business Equipment
• Develop Your Distribution Company Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Distribution Company Business
• Open for Business

Don’t you wish there was a faster, easier way to finish your Distribution Company business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan services can give you a winning business plan.

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Top 10 Distribution Plan Templates with Samples and Examples

When we think of ordering something online, the first name that comes to our mind is "Amazon." The company has reached this position of unrivaled success due to its impeccable services and a well-structured distribution plan, seamlessly connecting every facet of its operational process.

Amazon's strategic distribution network spans warehouses well-located worldwide, ensuring swift order fulfillment. This well-thought-out logistics chain integrates with advanced technology, including robotics and artificial intelligence, streamlining inventory management and delivery processes.

By optimizing their supply channels, Amazon meets customer expectations for rapid deliveries and minimizes costs, enhancing  efficiency. This distribution plan not only enhances operational efficiency but also contributes significantly to Amazon's reputation for reliable and timely deliveries.

What is a distribution plan?

Have you  wondered how your favorite items make their way from the manufacturing facility to your front door? Or how companies choose which retail locations to put their goods on sale?

That's where a distribution plan comes in!

A distribution plan assists companies in ensuring that their goods reach their intended customers at the correct  time and location. Businesses risk missing out on significant sales if they don't have a strong distribution plan in place for getting their items before prospective buyers.

Without a distribution strategy, companies may find it challenging to supply customers with goods or services. This damages their brand and lowers their profitability. A distribution plan is essential for every organization that wishes to succeed, stay competitive, and satisfy client demand.

How to create a distribution plan?

To establish a distribution plan that benefits your organization:

• Recognize your target audience's demands.
• Determine an efficient and cost-effective method of transporting goods or services from the manufacturing hub to the customer.
• Select the best distribution channel for reaching clients, such as direct sales, internet sales, retail shops, wholesalers, and distributors.
• To gain insight into consumer preferences and purchase habits, perform market research.
• Make a distribution plan budget that covers  costs, including marketing, PR, logistics, and shipping.
• To evaluate the effectiveness of the distribution plan, provide performance measures such as market share, sales volume, and customer satisfaction.

SlideTeam provides you with a framework and structure to assist you in drafting a distribution plan. We have curated this set of content-ready Top 10 Distribution Plan Templates. These templates are 100% editable and customizable. It provides you with a structure that allows you to focus on the plan rather than the presentation’s design.

Let’s explore!

Template 1: Distribution Plan Strategy Manufacturer Wholesaler and Retailer Template

Anyone familiar with the  manufacturing industry can profit from this distribution plan strategy demonstrated in this PowerPoint Template. The slide features three distinct outline flow diagrams that illustrate  levels of marketing channels  The manufacturer, wholesaler, and retailer are displayed along three pathways, which ensures smooth flow of information. It enables you to provide an order of command for the manufactured product. Download today!

Download Now!

Template 2: Distribution Management Plan PowerPoint Slide

This PowerPoint Slide, a complete deck in  20 slides, showcases a distribution plan. A lot of activity happens  between the creation of the final product and its delivery  to its final location.  Using this PPT Bundle, distribution managers of the manufacturing sector can  work on an effective and efficient plan. A distribution model, content distribution channels, a distribution plan template, a timeline, etc., are included in this bundle. It also showcases slides like our mission and vision for the organization, goals and objectives, information about the teams involved, etc. Download this bundle today!

Template 3: Sales and Distribution Plan PowerPoint Template

This PPT Template, a complete deck of 20 slides, showcases an effective sales and distribution plan. This bundle comes with a sales and distribution management action plan for operational efficiency to coordinate tasks and reduce delivery problems. It also showcases a strategy action plan schedule that assists an organization in meeting targets. In addition, a plan of sales and distribution for  industries, comparative analysis, etc, are also mentioned. Download today!

Template 4: Distribution PowerPoint Slide Bundle

Depending on the distribution requirements of a product, you may ensure that consumers can  obtain your goods and services, which will lead to a high customer retention rate. Businesses take into account the most profitable distribution approach while maintaining cost-effectiveness. This PowerPoint Slide, a complete deck in  22 slides, highlights a distribution plan. It showcases slides on types of channels with functions and benefits, considerations for selecting the right distribution channel, distribution management strategies, and more. You can develop the best distribution plan for your company by learning more about the advantages of  strategies. Download this template  now!

Template 5: Content Distribution PPT Template

The term "content distribution" is often heard in marketing groups without any clarification. Even excellent content has the danger of becoming lost , given the noise around content marketing. Content distribution is sharing content via channels to an online audience in  varied media forms. This PowerPoint Slide highlights basic details like the name of the content, registration page, blog post URL, etc. This slide includes social media platforms for content distribution: Facebook, Twitter, and LinkedIn. Download now!

Template 6: Content Distribution Matrix PPT Template

This PowerPoint Info graphic aims at helping marketers  review the effectiveness of  types of Paid, Owned, and Earned media. It assists in promoting or distributing their content in generating site visits, leads or sales compared to the level of investment in applying the media. Download now!

Template 7: Sales and Distribution Plan for Electronics Industry Template

This PowerPoint Slide displays the sales and distribution strategies  that the electronic industry  uses to increase their customer base and revenue. It also illustrates information about multiple products sold through  sales channels such as In-store, online, or both. The slide also depicts distribution channels, budget and the responsible authority. Download this PPT  to display information systematically.

Template 8: Sales and Distribution Plan for Food Industry Template

This PowerPoint Template showcases sales and distribution plans that food organizations  use to track their current status and plans for future.  It also illustrates  information about the products the industry deals in, what strategies it uses to distribute them, etc. All distribution channels through which the products will reach their final destination, as well as projected sales and budget, are also mentioned. Grab it today!

Template 9: Types of Distribution Channels with Core Functions and Benefits Template

This PowerPoint Slide illustrates  distribution channels, which are methods producers use to get their products to consumers. It also displays core functions and benefits that the producer will get using  distribution channels for their products. Direct channels, indirect channels, dual distribution channels, and reverse channels are  studied in this PowerPoint Slide. Download today and systematically display the necessary information.

Template 10: Major Types of Distribution Channels Intermediaries Template

A distribution channel is a network of people and businesses that work together to transport products from a producer to a consumer. Companies and product makers use channel intermediates to transport their products to customers without owning or otherwise being in-charge of a supply train. These middlemen handle logistics and ensure every customer receives their order on time. This PowerPoint Slide mentions the four  main types of channel intermediaries. These include agents, wholesalers, distributors, and retailers with their respective icons and descriptions for easier comprehension. Download Now!

SEE DISTRIBUTION AS BUSINESS BACKBONE

You require a distribution plan to be able to get your products or services to your customers. You may increase your business sales and stay competitive by making  optimum use of your resources and regularly modifying your strategy. It is essential to invest  sufficient time in creating a strong plan that fulfills your company's goals.

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Wholesale Business Plan Template

Written by Dave Lavinsky

Wholesale Business Plan

You’ve come to the right place to create your Wholesale business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Wholesale businesses.

Below is a template to help you create each section of your Wholesale business plan.

Executive Summary

Business overview.

National Wholesale is a startup wholesale distribution company located in Long Beach, California. The company is founded by Tony Campona who has experience in leading a wholesale company Now, with the expertise of knowledge and business acumen, Tony has determined he can confidently start and effectively grow a successful wholesale company. He believes his experience of strategic growth, marketing skills, financial capabilities, and wide and deep knowledge of wholesale distribution practices will provide everything needed for long-term growth and profitability.

National Wholesale will provide a comprehensive array of services for a wide variety of clients. National Wholesale will be the one-stop shop for all grocery stores, providing services and products to each client while supporting the strategic goals of the company. National Wholesale will be the ultimate choice in California for clients, offering wholesale distribution services, while being the best-priced wholesale business in the state.

Product Offering

The following are the products and services that National Wholesale will provide:

• Customized streamlined operations to leverage time for the client
• Communication lines that tie advantageous client relationships together
• Inventory refreshed on an hourly basis/7 days per week. This offers faster service for grocery store distribution through the system
• Storage of food and grocery items up to one-week without charge with complimentary service until client can receive products
• Day to day management with custom software package to promote the JIT system
• Logistics and inventory management services

Customer Focus

National Wholesale will target all grocery stores with yearly revenue of 1M+. In addition, National Wholesale will target drug stores and drug store chains. They will also target government entities, such as military forces and those that need rush delivery. They will target large corporations that require kitchen, dining room, and/or restroom supplies. They will target universities and colleges with cafeterias that serve daily meals.

Management Team

Howard and Stacy Steinberg are the co-owners of the National Wholesale business located in Long Beach, California. Howard Steinberg was the former vice president of Oregon Wholesale, where his role was to garner new business with grocery store chains and build inventory. His relationships with grocery store executives were built on mutual trust and his clients were entirely satisfied with his distribution efforts on their behalf. He now believes he is ready to start National Wholesale in a larger operation, using the skill and capabilities he’s honed over the years with his prior employer. Stacy Steinberg is an experienced executive who will take on the role of strategic inventory manager and David Dickson, a former associate at the Oregon food wholesaler, will also join the new company as the Vice President of Sales and Marketing.

Howard Steinberg is a graduate of Oregon State University, where he obtained an accounting degree. He has been the vice president of a statewide distribution company for over ten years. His expertise and skills now lead him to believe he is ready, along with his wife, to tackle this new business effort and become profitable with long-term growth prospects.

Stacy Steinberg, Howard’s wife, is an equal co-owner in the National Wholesale business and will work in the role of strategic inventory manager within the business. Stacy’s background includes over ten years as an inventory manager for a national warehouse distributor, where her clients believed that she was the best team member and able to handle whatever difficulties the role faced. Stacy graduated from University of California, Santa Barbara with a degree in Strategic Communications. She will lead the new company with employee onboarding and client relationship training.

David Dickson is a former associate of Howard Steinberg’s in a food wholesale company located in Oregon. He is known for his quick wit and adroit handling of customer relationship issues and finding solutions in every circumstance that benefit the welfare of the company. He graduated from the College of the Evergreens with a degree in Marketing and will hold the title of Vice President of Sales and Marketing in the startup company.

Success Factors

National Wholesale will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of National Wholesale
• Comprehensive menu of logistics services and an accurate and complete inventory control software system that guarantees accuracy.
• On-time/Every-time custom software that determines shipment deliveries
• Customer storage and warehousing with complimentary one week service
• High-quality food products that are guaranteed to be fresh and shelf-ready
• National Wholesale offers the best pricing in the city. Their pricing structure is the most cost effective compared to the competition.

Financial Highlights

National Wholesale is seeking $200,000 in debt financing to launch National Wholesale. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for National Wholesale.

Company Overview

Who is national wholesale.

National Wholesale is a newly established, full-service grocery wholesale distributor in Long Beach, California. National Wholesale will be the most reliable, cost-effective, and efficient choice for grocery stores in California. National Wholesale will provide a comprehensive menu of products and services for any client to utilize. Their full-service approach includes a comprehensive suite of custom software, designed to speed and simplify every logistical process and delivery.

  Howard Steinberg will be able to manage National Wholesale with his team of professionals to assist his efforts. The managers are highly qualified and experienced in distribution and logistics, in addition to inventory control. National Wholesale removes all headaches and issues of the food distribution industry and ensures all issues are taken care of expeditiously while delivering the best customer service.

National Wholesale History

National Wholesale is owned by Howard Steinberg and Stacy Steinberg. Howard was a former executive in a food distribution company and Stacy was an inventory manager for a national wholesale company. Howard has established relationships with grocery store executives that have been built on mutual trust and the satisfaction of his clients. Stacy is known to be an excellent team member and strategic in her workplace choices. Howard and Stacy believe they have the business knowledge and acumen to start their own company at this time.

Since incorporation, National Wholesale has achieved the following milestones:

• Registered National Wholesale, LLC to transact business in the state of California.
• Has a contract in place for a 10,000 square foot office at one of the distribution centers
• Reached out to numerous contacts to include National Wholesale as a distributor
• Began recruiting a staff of three and four office personnel to work at National Wholesale.

National Wholesale Services

The following will be the products and services National Wholesale will provide:

Industry Analysis

The wholesale distribution industry is expected to grow over the next five years to over $48 billion.

This growth will be driven by new technology offering digital tools, such as real-time data analytics for inventory, which will speed the process of distribution exponentially. The growth of the industry will also grow by the use of e-commerce platforms that will be technologically enhanced to hold pertinent information in much larger amounts, with greater flexibility. The growth will also be driven by an increase in the population of California, which will drive greater use of the grocery stores within the state.

Costs will likely be reduced as digital platforms, software, and technology-not-yet-invented performs minor, necessary operations to streamline the distribution process and shave off swatches of distribution time. This increases profitability for manufacturers and for wholesale businesses.

Customer Analysis

Demographic profile of target market.

Customer Segmentation

National Wholesale will primarily target the following customer profiles:

• Grocery store retail chains and independent grocery stores
• Drug store retail chains and independent drug stores
• Government entities, such as military entities
• Company suppliers, such as those who sell kitchen and bathroom supplies
• Universities and colleges that serve daily meals on campus

Competitive Analysis

Direct and indirect competitors.

National Wholesale will face competition from other companies with similar business profiles. A description of each competitor company is below.

US Trade Connections

Owned by Thomas Short, US Trade Connections was started in 2015 and is a wholesale distribution company for one drug store retail chain. Thomas, a former sales director at a national wholesale company, has built the wholesale company around the largest drugstore chain in the U.S., providing door-to-door service with an on-time delivery record that is 95% accurate.

Thomas Short is the president of US Trade Connections and has determined that supplying one major manufacturer is preferable to supplying many drug stores. His experience to date has been that profitability is difficult to acquire with every distribution of goods because the client understands that there is virtually no competition for the transportation, logistics, or services of US Trade Connections.

Evergreen Wholesale

Evergreen Wholesale was started in 2020 by Lucille Trenton to act as a wholesale jeweler for retailers who wanted a supply of inventory for online sales. Evergreen Wholesale is fully online and manages deliveries of products to clients or direct delivery to the digital platform warehouse used by customers. Lucille Trenton was formerly a manager of a mid-sized jewelry company who determined that the digital sales of jewelry would continue to move online. At that point, she chose to start her own wholesale business to garner the profit from the movement of jewelry to retail destinations.

Hardware @ Home

Hardware @ Home is a wholesale distribution company located in Reno, Nevada. The focus of the company is found in providing goods and services for national hardware company chain stores throughout the U.S. The owner of Hardware @ Home is Greg Lawson, a former employee of a franchise hardware store who saw the opportunity in 2019 and believed he had the business capability and skills to start his own wholesale company.

Hardware @ Home serves chain hardware stores throughout the U.S., offering warehousing of very large equipment, as well as small items, in addition to providing logistics with on-time deliveries and inventory management systems that are customized to meet the specific needs of hardware stores.

Competitive Advantage

National Wholesale will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

National Wholesale will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who are able to provide a comprehensive array of on-time product deliveries and logistical inventory that are driven by the newest technology and software

Promotions Strategy

The promotions strategy for National Wholesale is as follows:

Word of Mouth/Referrals

Howard and Stacy Steinberg have built up an extensive list of contacts over the years by providing exceptional service and expertise to their clients. The contacts and clients will follow them to their new company and help spread the word of National Wholesale.

Professional Associations and Networking

National Wholesale will join all national trade groups and offer to take on official duties. This will increase their potential client base and build business relationships. They will also join statewide associations and non-profit organizations to help with state-related food security issues and determine that food not used will go to worthy recipients through qualified services.

Print Advertising

Using a special drop-in mailer, National Wholesale will advertise to all grocery stores within the US via a national weekly grocery store magazine. The advertisements will be quarterly, with the results of the ad buy examined at the end of the first fiscal year.

Website/SEO Marketing

National Wholesale will fully utilize their website. The website will be well organized, informative, and list all the services that National Wholesale provides. The website will also list their contact information and list their warehouse space available. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “wholesale food” or “wholesale distributor near me,” National Wholesale will be listed at the top of the search results.

The pricing of National Wholesale will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for National Wholesale. Operation Functions:

• Howard Steinberg will be the President of the company. He will oversee all staff and manage client relations.
• Stacy Steinberg will be Strategic Inventory Manager. She will oversee digital tools that drive on-time deliveries and the logistics that go with tools. Together, Howard and Stacy have recruited:
• David Dickson will take on the role of Vice President of Sales and Marketing.
• Marsha Michelson will become the Administrative Manager, who will manage the office administration, client files, and accounts payable.
• Stanley Maren will become the Staff Accountant, and will provide all client accounting, tax payments, and monthly financial reporting.

Milestones:

National Wholesale will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for National Wholesale
• 6/1/202X – Finalize contracts for National Wholesale clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into National Wholesale office
• 7/1/202X – National Wholesale opens its doors for business

Financial Plan

Key revenue & costs.

The revenue drivers for National Wholesale are the fees they will charge to clients for their services.

The cost drivers will be the overhead costs required in order to staff National Wholesale. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

National Wholesale is seeking $200,000 in debt financing to launch its wholesale company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Contracts Per Month: 380
• Average Revenue per Month: $190,000
• Office Lease per Year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Wholesale Business Plan FAQs

What is a wholesale business plan.

A wholesale business plan is a plan to start and/or grow your wholesale business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. You can easily complete your Wholesale business plan using our Wholesale Business Plan Template here .

What are the Main Types of Wholesale Businesses?

There are a number of different kinds of wholesale businesses, some examples include: Full service retail wholesale, Wholesale brokerage or agency, Manufacturers’ wholesale, and Specialty wholesale.

How Do You Get Funding for Your Wholesale Business Plan?

Wholesale businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Wholesale Business?

Starting a wholesale business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster. 1. Develop A Wholesale Business Plan - The first step in starting a business is to create a detailed wholesale business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your wholesale business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your wholesale business is in compliance with local laws. 3. Register Your Wholesale Business - Once you have chosen a legal structure, the next step is to register your wholesale business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 4. Identify Financing Options - It’s likely that you’ll need some capital to start your wholesale business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 7. Acquire Necessary Wholesale Equipment & Supplies - In order to start your wholesale business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your wholesale business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

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How to Start a Wholesale Distribution Business Buy low, sell high: A background in sales and a keen eye for popular merchandise are the keys to success as a wholesale distributor.

Editor's note: This article was excerpted from our Wholesale Business Distribution start-up guide , available from Entrepreneur Bookstore.

So you want to start a wholesale distributorship. Whether you're currently a white-collar professional, a manager worried about being downsized, or bored with your current job, this may be the right business for you. Much like the merchant traders of the 18th century, you'll be trading goods for profit. And while the romantic notion of standing on a dock in the dead of night haggling over a tea shipment may be a bit far-fetched, the modern-day wholesale distributor evolved from those hardy traders who bought and sold goods hundreds of years ago.

The Distributor's Role

According to U.S. Industry and Trade Outlook, published by The McGraw-Hill Companies and the U.S. Department of Commerce/International Trade Administration, wholesale trade includes establishments that sell products to retailers, merchants, contractors and/or industrial, institutional and commercial users. Wholesale distribution firms, which sell both durable goods (furniture, office equipment, industrial supplies and other goods that can be used repeatedly) and nondurable goods (printing and writing paper, groceries, chemicals and periodicals), don't sell to ultimate household consumers.

Three types of operations can perform the functions of wholesale trade: wholesale distributors; manufacturers' sales branches and offices; and agents, brokers and commission agents. As a wholesale distributor, you will probably run an independently owned and operated firm that buys and sells products of which you have taken ownership. Generally, such operations are run from one or more warehouses where inventory goods are received and later shipped to customers.

Put simply, as the owner of a wholesale distributorship, you will be buying goods to sell at a profit, much like a retailer would. The only difference is that you'll be working in a business-to-business realm by selling to retail companies and other wholesale firms like your own, and not to the buying public. This is, however, somewhat of a traditional definition. For example, companies like Sam's Club and BJ's Warehouse have been using warehouse membership clubs, where consumers are able to buy at what appear to be wholesale prices, for some time now, thus blurring the lines. However, the traditional wholesale distributor is still the one who buys "from the source" and sells to a reseller.

Getting Into the Game

The field of wholesale distribution is a true buying and selling game-one that requires good negotiation skills, a nose for sniffing out the next "hot" item in your particular category, and keen salesmanship. The idea is to buy the product at a low price, then make a profit by tacking on a dollar amount that still makes the deal attractive to your customer.

Experts agree that to succeed in the wholesale distribution business, an individual should possess a varied job background. Most experts feel a sales background is necessary, as are the "people skills" that go with being an outside salesperson who hits the streets and/or picks up the phone and goes on a cold-calling spree to search for new customers.

In addition to sales skills, the owner of a new wholesale distribution company will need the operational skills necessary for running such a company. For example, finance and business management skills and experience are necessary, as is the ability to handle the "back end" (those activities that go on behind the scenes, like warehouse setup and organization, shipping and receiving, customer service, etc.). Of course, these back-end functions can also be handled by employees with experience in these areas if your budget allows.

"Operating very efficiently and turning your inventory over quickly are the keys to making money," says Adam Fein, president of Pembroke Consulting Inc., a Philadelphia strategic consulting firm. "It's a service business that deals with business customers, as opposed to general consumers. The startup entrepreneur must be able to understand customer needs and learn how to serve them well."

According to Fein, hundreds of new wholesale distribution businesses are started every year, typically by ex-salespeople from larger distributors who break out on their own with a few clients in tow. "Whether they can grow the firm and really become a long-term entity is the much more difficult guess," says Fein. "Success in wholesale distribution involves moving from a customer service/sales orientation to the operational process of managing a very complex business."

Setting Up Shop

According to Fein, wholesale distribution companies are frequently started in areas where land is not too expensive and where buying or renting warehouse space is affordable. "Generally, wholesale distributors are not located in downtown shopping areas, but off the beaten path," says Fein. "If, for example, you're serving building or electrical contractors, you'll need to choose a location in close proximity to them in order to be accessible as they go about their jobs."

State of the Industry

And that's not all: Every year, U.S. retail cash registers and online merchants ring up about $3.6 trillion in sales, and of that, about a quarter comes from general merchandise, apparel and furniture sales (GAF). This is a positive for wholesale distributors, who rely heavily on retailers as customers. To measure the scope of GAF, try to imagine every consumer item sold, then remove the cars, building materials and food. The rest, including computers, clothing, sports equipment and other items, fall into the GAF total. Such goods come directly from manufacturers or through wholesalers and brokers. Then they are sold in department, high-volume and specialty stores-all of which will make up your client base once you open the doors of your wholesale distribution firm.

All this is good news for the startup entrepreneur looking to launch a wholesale distribution company. However, there are a few dangers that you should be aware of. For starters, consolidation is rampant in this industry. Some sectors are contracting more quickly than others. For example, pharmaceutical wholesaling has consolidated more than just about any other sector, according to Fein. Since 1975, mergers and acquisitions have reduced the number of U.S. companies in that sector from 200 to about 50. And the largest four companies control more than 80 percent of the distribution market.

To combat the consolidation trend, many independent distributors are turning to the specialty market. "Many entrepreneurs are finding success by picking up the golden crumbs that are left on the table by the national companies," Fein says. "As distribution has evolved from a local to a regional to a national business, the national companies [can't or don't want to] cost-effectively service certain types of customers. Often, small customers get left behind or are just not [profitable] for the large distributors to serve."

Starting Out

For entrepreneurs looking to start their own wholesale distributorship, there are basically three avenues to choose from: buy an existing business, start from scratch or buy into a business opportunity. Buying an existing business can be costly and may even be risky, depending on the level of success and reputation of the distributorship you want to buy. The positive side of buying a business is that you can probably tap into the seller's knowledge bank, and you may even inherit his or her existing client base, which could prove extremely valuable.

The second option, starting from scratch, can also be costly, but it allows for a true "make or break it yourself" scenario that is guaranteed not to be preceded by an existing owner's reputation. On the downside, you will be building a reputation from scratch, which means lots of sales and marketing for at least the first two years or until your client base is large enough to reach critical mass.

The last option is perhaps the most risky, as all business opportunities must be thoroughly explored before any money or precious time is invested. However, the right opportunity can mean support, training and quick success if the originating company has already proven itself to be profitable, reputable and durable.

During the startup process, you'll also need to assess your own financial situation and decide if you're going to start your business on a full- or part-time basis. A full-time commitment probably means quicker success, mainly because you will be devoting all your time to the new company's success.

Because the amount of startup capital necessary will be highly dependent on what you choose to sell, the numbers vary. For instance, an Ohio-based wholesale distributor of men's ties and belts started his company with $700 worth of closeout ties bought from the manufacturer and a few basic pieces of office equipment. At the higher end of the spectrum, a Virginia-based distributor of fine wines started with $1.5 million used mainly for inventory, a large warehouse, internal necessities (pallet racking, pallets, forklift), and a few Chevrolet Astro vans for delivery.

Like most startups, the average wholesale distributor will need to be in business two to five years to be profitable. There are exceptions, of course. Take, for example, the ambitious entrepreneur who sets up his garage as a warehouse to stock full of small hand tools. Using his own vehicle and relying on the low overhead that his home provides, he could conceivably start making money within six to 12 months.

"Wholesale distribution is a very large segment of the economy and constitutes about 7 percent of the nation's GDP," says Pembroke Consulting Inc.'s Fein. "That said, there are many different subsegments and industries within the realm of wholesale distribution, and some offer much greater opportunities than others."

Among those subsegments are wholesale distributors that specialize in a unique niche (e.g., the distributor that sells specialty foods to grocery stores), larger distributors that sell everything from soup to nuts (e.g., the distributor with warehouses nationwide and a large stock of various, unrelated closeout items), and midsized distributors who choose an industry (hand tools, for example) and offer a variety of products to myriad customers.

The cornerstone of every distribution cycle, however, is the basic flow of product from manufacturer to distributor to customer. As a wholesale distributor, your position on that supply chain (a supply chain is a set of resources and processes that begins with the sourcing of raw material and extends through the delivery of items to the final consumer) will involve matching up the manufacturer and customer by obtaining quality products at a reasonable price and then selling them to the companies that need them.

In its simplest form, distribution means purchasing a product from a source-usually a manufacturer, but sometimes another distributor-and selling it to your customer. As a wholesale distributor, you will specialize in selling to customers-and even other distributors-who are in the business of selling to end users (usually the general public). It's one of the purest examples of the business-to-business function, as opposed to a business-to-consumer function, in which companies sell to the general public.

Weighing It Out: Operating Costs

Regardless of where a distributor sets up shop, some basic operating costs apply across the board. For starters, necessities like office space, a telephone, fax machine and personal computer will make up the core of your business. This means an office rental fee if you're working from anywhere but home, a telephone bill and ISP fees for getting on the internet.

No matter what type of products you plan to carry, you'll need some type of warehouse or storage space in which to store them; this means a leasing fee. Remember that if you lease a warehouse that has room for office space, you can combine both on one bill. If you're delivering locally, you'll also need an adequate vehicle to get around in. If your customer base is located further than 40 miles from your home base, then you'll also need to set up a working relationship with one or more shipping companies like UPS, FedEx or the U.S. Postal Service. Most distributors serve a mixed client base; some of the merchandise you move can be delivered via truck, while some will require shipping services

While they may sound a bit overwhelming, the above necessities don't always have to be expensive-especially not during the startup phase. For example, Keith Schwartz, owner of On Target Promotions, started his wholesale tie and belt distributorship from the corner of his living room. With no equipment other than a phone, fax machine and computer, he grew his company from the living room to the basement to the garage and then into a shared warehouse space (the entire process took five years). Today, the firm operates from a 50,000-square-foot distribution center in Warrensville Heights, Ohio. According to Schwartz, the firm has grown into a designer and importer of men's ties, belts, socks, wallets, photo frames and more.

To avoid liability early on in his entrepreneurial venture, Schwartz rented pallet space in someone else's warehouse, where he stored his closeout ties and belts. This meant lower overhead for the entrepreneur, along with no utility bills, leases or costly insurance policies in his name. In fact, it wasn't until he penned a deal with a Michigan distributor for a large project that he had to store product and relabel the closeout ties with his firm's own insignia. As a result, he finally rented a 1,000-square-foot warehouse space. But even that was shared, this time with another Ohio distributor. "I don't believe in having any liability if I don't have to have it," he says. "A warehouse is a liability."

The Day-to-Day Routine

"One reason that wholesale distributors have increased their share of total wholesale sales is that they can perform these functions more effectively and efficiently than manufacturers or customers," comments Fein.

To handle all these tasks and whatever else may come their way during the course of the day, most distributors rely on specialized software packages that tackle such functions as inventory control, shipping and receiving, accounting, client management, and bar-coding (the application of computerized UPC codes to track inventory).

And while not every distributor has adopted the high-tech way of doing business, those who have are reaping the rewards of their investments. Redondo Beach, California-based yoga and fitness distributor YogaFit Inc., for example, has been slowly tweaking its automation strategy over the past few years, according to Beth Shaw, founder and president. Shaw says the 25-employee company sells through a website that tracks orders and manages inventory, and the company also makes use of networking among its various computers and a database management program to maintain and update client information. In business since 1994, Shaw says technology has helped increase productivity while cutting down on the amount of time spent on repetitive activities, such as entering addresses used to create mailing labels for catalogs and individual orders. Adds Shaw, "It's imperative that any new distributor realize from day one that technology will make their lives much, much easier."

Who Are Your Customers?

Because every company relies on a pool of customers to sell its products and/or services to, the next logical step in the startup process involves defining exactly who will be included in that pool. Defining this group early on will allow you to develop business strategies, define your mission or answer the question "why am I in business?" and tailor your operations to meet the needs of your customer base.

As a wholesale distributor, your choice of customers includes:

Retail businesses: This includes establishments like grocery stores, independent retail stores, large department stores and power retailers like Wal-Mart and Target.

Retail distributors: This includes the distributors who sell to those retailers that you may find impenetrable on your own. For example, if you can't "get in" at a power retailer like Wal-Mart, you may be able to sell to one of its distributors.

Exporters: These are companies that collect United States-manufactured goods and ship them overseas.

Other wholesale distributors: It's always best to buy from the source, but that isn't always possible, due to exclusive contracts and issues like one-time needs (e.g., a distributor who needs 10 hard hats for a customer who is particular about buying one brand). For this reason, wholesale distributors often find themselves selling to other distributors.

The federal government: Uncle Sam is always looking for items that wholesale distributors sell. In fact, for wholesale distributors, selling to the government presents a great opportunity. For the most part, it's a matter of filling out the appropriate forms and getting on a "bid list." After you become an official government supplier, the various buying agencies will either fax or e-mail you requests for bids for materials needed by schools, various agencies, shipyards and other facilities.

For a small wholesale distributor, there are some great advantages to selling to the government, but the process can also be challenging in that such orders often require a lengthy bidding process before any contracts are awarded. Since opening her Redondo Beach, California, distributorship in 1994, Beth Shaw of YogaFit Inc. says she's made several successful sales to the government. Currently, the firm sells its exercise education programs and several styles of yoga mats to Army bases and other entities. Calling government sales "a good avenue" for wholesale distributors, Shaw says it's also one that's often overlooked, "especially by small businesses."

Finding a Profitable Niche

In other words, what matters is not so much what you sell, but how you sell it. There are profitable opportunities in every industry-from beauty supplies to hand tools, beverages to snack foods. No matter what they're selling, wholesale distributors are discovering ways to reaffirm their value to suppliers and customers by revealing the superior service they have to offer, as well as the cost-saving efficiencies created by those services. This mind-set opens up a wealth of opportunities to provide greater attention to the individual needs of customers, a chance to develop margin growth, and greater flexibility in product offerings and diversification of the business.

The whole trick, of course, is to find that niche and make it work for you. In wholesale distribution, a niche is a particular area where your company can most excel and prosper-be it selling tie-dyed T-shirts, roller bearings or sneakers. While some entrepreneurs may find their niche in a diverse area (for example, closeout goods purchased from manufacturers), others may wish to specialize (unique barstools that will be sold to regional bars and pubs).

On the other side of the coin, too much product and geographical specialization can hamper success. Take the barstool example. Let's say you were going to go with this idea but that in six months you'd already sold as many barstools as you could to the customer base within a 50-mile radius of your location. At that point, you would want to diversify your offerings, perhaps adding other bar-related items like dartboards, pool cues and other types of chairs.

The decision is yours: You can go into the wholesale distribution arena with a full menu of goods or a limited selection. Usually, that decision will be based on your finances, the amount of time you'll be able to devote to the business, and the resources available to you. Regardless of the choices you make, remember that market research provides critical information that enables a business to successfully go to market, and wholesale distributors should do as much as they can-on an ongoing basis. It is better to do simple research routinely than to shell out a lot of money once on a big research information project that may quickly become outdated.

Pinpointing a Startup Number

While entrepreneurs in some industries seem to be able to raise money with a snap of their fingers, most have to take a more detailed approach to the process. Perhaps the best starting point is to figure out just how much you need.

In the wholesale distribution sector, startup numbers vary widely, depending on what type of company you're starting, how much inventory will be necessary and what type of delivery systems you'll be using. For example, Keith Schwartz, who got his start selling belts and ties from his basement in Warrensville Heights, Ohio, started On Target Promotions with $700, while Don Mikovch, president of the wine distributor Borvin Beverage in Alexandria, Virginia, required $1.5 million. While Schwartz worked from a desk and only needed a small area in which to store his goods, Mikovch required a large amount of specialized storage space for his wines-and a safe method of transporting the bottles to his retailers.

The basic equipment needed for your wholesale distributorship will be highly dependent on what you choose to sell. If you plan to stock heavy items, then you should invest in a forklift (some run on fuel or propane, others are man-powered) to save yourself some strain. Pallets are useful for stocking and pallet racking is used to store the pallets and keep them in order for inventory purposes.

For distributors who are sourcing, storing and selling bulky goods (such as floor tile, for example), a warehouse of sufficient size (based on the size of products you're selling and the amount of inventory you'll be stocking) is a necessity. To ensure that the distribution process operates smoothly, select a location that allows you to move around efficiently and that includes the necessary storage equipment (such as pallet racking, on which you can store pallets). Don't forget to leave room for a forklift to be able to maneuver between racks of pallets and shelves stored in the warehouse.

As a startup distributor, your initial inventory investment will depend on what you're selling. Expect to carry some inventory, no matter what the product is, but also understand that your choice of goods will have some effect on how much you'll need to shell out upfront. Schwartz was buying surplus apparel, so $700 gave him plenty to work with for the first few months. When Garth Gordon and Vivienne Bramwell-Gordon, president and vice president, respectively, of Tampa, Florida-based Phones Etc., founded their company, they invested about $2,400 to purchase a shipment of high-end telephones. They quickly turned them around for a 300-percent profit and have been in the business of distributing refurbished Avaya telecom equipment to small companies and nonprofit groups ever since. Today, Phones Etc. carries about $600,000 in inventory at any given time.

Bill Green, managing partner at WSG Partners LLC in Cherry Hill, New Jersey, says the best way to determine inventory needs is to look at your customers' needs. If they're the type who "need everything yesterday" (contractors working on job sites would fall into this category), then your inventory will need to be ample enough to meet those last-minute requests. However, if there's usually a three-to-four-day span between order-taking and delivery, then you may be able to skimp a bit on inventory and instead focus on forming solid, reliable relationships with vendors who can help you meet those timelines.

"The most successful distributorships are the ones [whose owners] are working as close to their customers as possible and who can predict their needs and be there to provide value-along with the products," says Green. "That doesn't necessarily mean you need a huge warehouse and inventory, but you will need to find vendors who will 'hold' that inventory for you until your own customers ask for it."

Inventory Matters

There are caveats to both strategies. For starters, when a company chooses not to stock up, it runs the risk of being out of an item when the customer comes calling. At the same time, the distributors who overstock can find themselves in a real pickle if they can't get rid of merchandise they thought they could unload easily.

Being a distributor is all about "turning" inventory (selling everything you have in stock and then replenishing it)-the more times you can turn your inventory in a year, the more money you will make. Get the most turns by avoiding stocking items that may end up sitting in your warehouse for more than 90 days.

Stocking Up.Or Not?

On the other hand, if you are servicing a varied customer base located in different geographic areas, you may need to stock a little more than the entrepreneur in the previous example. Because you probably won't be visiting those customers at their locations, it may take a few months before you can determine just how much product they will be buying from you on a regular basis. Of course, you must also leave some breathing room for the "occasional" customer-the one who buys from you once a year and who will probably always catch you off guard. The good news is that having relationships with vendors can help fill those occasional needs quickly, even overnight or on the same day, if necessary.

"The biggest mistake companies make is developing an inventory load that is larger than what they really need," says Rich Sloan, co-founder of small-business consultancy StartupNation.com in Birmingham, Michigan. "The investment winds up sitting out in the warehouse when it could be put to much better use." Sloan says companies also jump into inventory purchases too quickly, without factoring in their customers' wants and needs-yet another way to wrap up too much investment in items that will be slow to move. "The trick is to keep it as lean as possible. That's a very smart, lower-risk way to go."

At Keith Schwartz's wholesale belt and tie distributorship in Warrensville Heights, Ohio, all it took was a $700 investment in closeout ties to get started. He resold them to a drugstore, pocketed the profits and reinvested the money in more inventory. It's a simple formula and one that works well for the small startup entrepreneur who is operating with low overhead.

The distributor who has already invested in a location, vehicles and other necessities should also factor product life cycle into the inventory equation. Those with longer life cycles (hand tools, for example) are usually less risky to stock, while those with shorter life cycles (food, for example, usually has a short life cycle) can become a liability if there are too many of them on the shelf. The shorter the life cycle, the less product you'll want to have on hand. Ultimately, your goal will be to sell the product before having to pay for it. In other words, if you are buying computers, and if the manufacturer offers you 30-day payment terms, then you'll want to have less than 30 days' worth of inventory on the shelf. That way, you never end up "owning" the inventory and instead serve as a middleman between the company that's manufacturing and/or selling the product and the one that's buying it.

To sum up the tricks to stocking a wholesale distributorship:

• Don't overdo it when it comes to buying inventory.
• Try to get a grasp on your customers' needs before you invest in inventory.
• If you can get away with doing it cheaply at first (especially those with low overhead), then go for it.
• Be wary of investing too much in short- life-cycle products, which you may get stuck with if they don't sell right away.
• Stock up to a level where you can sell the product before you have to pay for it.

For distributors, the biggest challenge is running your business on low operating profit margins. Adam Fein of Philadelphia-based Pembroke Consulting Inc. suggests making your operations as efficient as possible and turning inventory around as quickly as possible. "These are the keys to making money as a wholesale distributor," he says.

And while the operating profit margins may be low for distributors, Fein says the projected growth of the industry is quite optimistic. In 2004, total sales of wholesaler-distributors reached $3.2 trillion, and for 2005 Fein expects revenue growth to continue to outpace the growth of the economy overall, growing an estimated 7.7 percent (vs. projected gross domestic product growth of 3.5 percent).

Playing the Markup Game

Distributors can use the following formula when it comes to markup: If it costs the manufacturer $5 to produce the product and they have a 100 percent markup, then you (the distributor) buy it for $10. Following the same formula, the wholesaler would double the cost and sell it for $20. Thus, there is a 400 percent markup from manufactured price to the wholesaler's customer.

Wholesale Distribution Business Resources Associations and Professional Organizations

• Alabama Wholesale Distributors Association, (205) 823-8544
• American Wholesale Marketers Association
• California Distributors Association, (916) 446-7841
• Colorado Association of Distributors, (303) 690-8505
• General Merchandise Distributors Council, (719) 576-4260
• Idaho Wholesale Marketers Association, (208) 342-8900
• Industrial Supply Association
• Mississippi Wholesale Distributors Association, (601) 605-1482
• National Association of Wholesaler-Distributors
• North Carolina Wholesalers Association, (919) 271-2140
• Southern Association of Wholesale Distributors
• Texas Association of Wholesale Distributors, (512) 346-6912
• Virginia Wholesalers & Distributor Association, (804) 254-9170
• West Virginia Wholesalers Association, (304) 342-1081
• Integrated Distribution Management: Competing on Customer Service, Time and Cost by Christopher Gopal and Harold Cypress (Business One Irwin)
• Facing the Forces of Change: The Road to Opportunity by Pembroke Consulting ( www.pembroke_consulting.com )
• Managing Channels of Distribution by Kenneth Rolnicki (Amacom Books)
• The Complete Distribution Handbook by Timothy Van Mieghem (Prentice Hall)
• Wholesale Distribution Channels: New Insights and Perspectives by Bert Rosenbloom (Haworth Press)

Publications

• Electronic Distribution Today
• Industrial Distribution
• Modern Distribution Management

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The Coffee Warehouse

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

The Coffee Warehouse is a new business providing high-quality, full service distribution of coffee, specialty beverages and beverage-related supplies to coffee houses and espresso stands throughout the Spokane and Northern Idaho market.

The principal owners are Steve and Jennifer Smith, whose combined experience brings office management, high levels of customer service, and over 20 years in distribution and sales management.  At this time we are seeking additional equity capital to compliment our own investment and are seeking to arrange a bank line for inventory and receivables financing.  We have firm commitments to distribute several high-quality new age beverage products, and have verbal commitments from independent retailers throughout the Spokane and Northern Idaho market to carry our product.  We plan to distribute our first products within 30-60 days of finalizing financial arrangements.

Sales projections for The Coffee Warehouse are estimated to begin at approximately $2,229,000 the first year, increasing to approximately $2,558,000 in Year 2 and approximately $2,936,000 in Year 3.  Our net profit is projected at approximately $283,000 the first year, increasing to $406,000 by the end of the third year of operation.

Distinguishing characteristics of our business will be the combination of management experience, sales and distribution experience, high-quality, innovative products and exceptional customer service.  In particular, what really sets up apart is that we are the ONLY full service distribution company servicing the coffee and specialty beverage industry in the Spokane/Northern Idaho market.   In addition, The Coffee Warehouse has an exclusive contract to distribute a new, groundbreaking product that would enable us to gain immediate access to a majority of the potential customer base.

1.1 Objectives

• To open and operate a successful coffee and new age beverage distributorship in the Spokane/Northern Idaho market, employing three to five employees the first year.
• To obtain a minimum of 100 regular customers in the Spokane/North Idaho market the first year of operation.
• Achieve first year sales of $2,000,000.
• Maintain an average gross margin of 25 percent.
• To produce a net profit of at least $400,000 by the end of the third year of operation.

1.2 Mission

The Coffee Warehouse intends to become a recognized distributor of specialty beverages and beverage-related supplies and services to coffee houses and espresso stands throughout Spokane and Northern Idaho.

The Coffee Warehouse plans to develop strong relationships with key customers so we will be viewed as indispensable partners, rather than just another supplier. We will work closely with each customer to recommend product assortment unique for their retail base, appropriate stocking levels, pricing and display assortments, as well as promotional ideas and material to increase sales. The Coffee Warehouse will seek out and work with the manufacturers we represent to deliver the most innovative and exciting products possible to the customers we serve. We are not only selling product, we are selling service.

1.3 Keys to Success

• Innovative quality products.
• Individualized customer service – providing our customers with what they want, when and how they want it.
• Only full service distribution company in the Spokane/Northern Idaho market.
• Fully integrated programs to help customers increase sales through menu development, creative promotions, advertising, and custom marketing material.
• Exclusive distribution rights to ground-breaking products not currently available in our market.
• The combined experience of the principal owners bring upper office management skills, high levels of customer service, and over 20 years in distribution and sales management.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

The Coffee Warehouse, Inc. is a new S-corporation business located in Spokane, Washington, and will be established based on the details of the following plan.

2.1 Company Location & Facilities

The Coffee Warehouse will be located in the Spokane Valley within the Spokane Industrial Business Park.  This is a prime location to service both the Spokane and Northern Idaho market. The facilities will include approximately 5,000 square feet of warehouse space, with an additional 1,400 square feet built out for office/retail space.  We are currently negotiating lease terms on the several available properties, and plan to have a lease signed by July 31.

2.2 Company Ownership

The Coffee Warehouse is a privately held S-Corporation owned in total by its co-founders, Steve and Jennifer Smith.

UBI Number:  XXX-XXX-XXX (removed to protect confidentiality)

2.3 Start-up Summary

Start-up expenses for the Coffee Warehouse total $16,450, and include expenses such as legal, marketing, lease deposit, computer systems, etc.  Start-up assets include $9,800 in initial cash requirements, $18,750 in short term assets (office furniture, refrigeration equipment), and $75,000 in starting inventory.  These start-up costs will be financed through investments and small-business loans.  The details of the start-up summary are included in the following table.

The Coffee Warehouse will provide a first-class delivery service of quality hot and cold beverage related supplies, including whole bean or ground coffee, flavor syrups, jet teas, fruit smoothies, bubble teas, concentrated milk, fresh baked goods and assorted paper supplies. Our services will include invaluable trade resources, effective promotional programs, custom-designed marketing material, informative monthly newsletters, training and product demonstrations, as well as information on the latest market trends in the coffee/specialty beverage industry.

3.1 Product & Service Description

PRODUCT DESCRIPTION The Coffee Warehouse will carry a variety of quality products that will enable us to provide full service delivery to espresso stands and coffee houses. Our underlying philosophy in selecting products is to choose lines that will bring consistent quality, competitive prices, and product satisfaction to our customers. We have personally researched and sampled each of the following products that we offer to ensure the quality we guarantee.

• Lowery’s Gourmet Whole Bean and Wired Willey’s White Coffee
• Assorted Gourmet Syrups & Coffee Toppings
• Chocolate, White Chocolate and Caramel Syrups/Sauces
• Oregon Chai Concentrate
• Jet Cafe and Jet Tea Fruit n’ Tea Freeze
• Cappuccina line of product
• Big Train line of product
• Red Bull Energy Drinks
• Good Cow Concentrated Milk with Custom Dispensing Equipment
• Fresh Baked Goods
• Assortment of White, Pre-printed Paper, and Clear Beverage Cups Systems – as well as an assortment of other paper supplies

At this time, the majority of these products are only available to customers through wholesale vendors such as Cash and Carry retail outlets – therefore it is the customer’s responsibility to acquire these products by their own means. The Coffee Warehouse will make these same products available through our high quality, full service delivery – bringing these products directly to their doorstep at a competitive price.

• Ideas to help our customers increase sales through menu development, creative promotions, co-op advertising, and much more.
• Custom designed marketing material such as printed banners, promotional posters, punch cards, pre-purchased beverage cards, reader boards, etc.
• Distribute a monthly newsletter featuring the latest coffee trends, new industry equipment, breaking trade news, promotional ideas, new creative recipes, and upcoming events.
• Samples of the latest product releases – with eye-catching point-of-sale to advertise new items to the end consumer.
• Routine equipment maintenance and training.

3.2 Competitive Edge

KEY COMPETITIVE STRENGTHS No other wholesaler in the market offers full service delivery with the variety of product we feature. We are better positioned than our main competitors to take advantage of the increasing demands of coffee and specialty beverage supplies because we focus exclusively on high-quality distribution and customer service. In addition to the variety of products we feature, The Coffee Warehouse has exclusive distribution rights to Good Cow’s concentrated milk/dispensing system. This product is not currently available in our market by any other suppliers.

KEY COMPETITIVE WEAKNESSES Our primary weakness is that we are a new business competing largely against established suppliers. To significantly build sales, we must not just find new customers – we must take customers away from existing suppliers. However by offering a superior selection of supplies, new groundbreaking products to the market, and focusing on high-quality service and full service delivery, we feel will can quickly establish accounts and build strong relationships. Co-founder Jennifer Smith has had many discussions with owners of coffee and espresso businesses that confirm this opinion.

3.3 Sales Literature

Sales literature to be distributed to both current and potential customers will include brochures, fliers, newsletters, as well as other print media such as print advertisements.  Jennifer Smith is highly skilled in graphic design and desktop publishing, and has quality design and printing equipment to publish professional pieces at a low cost.

3.4 Sourcing

The Coffee Warehouse will purchase product directly from manufacturers, as well as master distributors. Because this eliminates the broker or “middle man,” this allows us to operate on a 25-30% profit margin, while providing our customers with competitive prices.

To further reduce costs, The Coffee Warehouse plans to share product shipments out of California with distributors operating in Portland, Oregon and Tri-Cities, Washington. Other product not being shipped directly to Spokane will be purchased and picked up in Seattle, Washington. The Coffee Warehouse plans to send a truck to Seattle on a bi-weekly basis to pick up product, thus cutting costs by an average of 5%.

3.5 Technology

To streamline the efficiency of our distribution methods, The Coffee Warehouse plans to use the latest in cutting edge technology – not only in the warehouse – but also in the trade.

All of our drivers/sales representatives will be equiped with Thinque MSP handhelds and software. Thinque MSP applications will reduce field expenses, decrease day’s sales outstanding, and increase worker efficiency. Features can be used in or out of the warehouse and include managing returns and collections; adjusting item price, profit or margin; applying promotional items to an account; streamlining orders; tracking inventory; reducing out-of-stocks; and providing sales history reports. All information recorded in the handheld is available in real time to be viewed by management in the office.

3.6 Future Products and Services

Within the first year of business, The Coffee Warehouse intends to open a retail/wholesale store and high-quality showroom.  Products will be available for purchase by both our wholesale customers who may need product between delivery days, as well as retail consumers interested in purchasing product for their home use.  We will also offer a showroom that will feature equipment, supplies, trade resources, and information on marketing services with examples of marketing and promotional material available to customers.

With the addition of the product showroom, The Coffee Warehouse will offer customers quarterly product and training demonstrations that will be presented by trained beverage experts from the industry.

The Coffee Warehouse also plans to hold semi-annual trade shows for current or potential customers. These trade shows will allow customers the opportunity to sample products, talk to manufacturers, learn about new industry trends, review marketing material, and network with other business owners in their market.

Market Analysis Summary how to do a market analysis for your business plan.">

Coffee is the second largest commodity market next to oil, and growth is expected to continue at a strong pace for the foreseeable future. The specialty beverage industry is growing at an equally strong pace, with sales growth in some categories projected to grow at rates of 40% per year.

This growth offers excellent opportunities for new companies to enter this market, and we are excited about the possibilities of what The Coffee Warehouse can accomplish in the Spokane and Northern Idaho market.

4.1 Market Segmentation

The gourmet coffee and specialty beverage industry is divided into several segments. Consumers who enjoy these products purchase drinks at restaurants, coffee houses, sports venues, drive-thru espresso stands, and even inside other retail establishments that might feature an independent beverage stand.

As illustrated in the chart below, within the market surrounding Spokane, Rathdrum, Post Falls and Coeur d’Alene, there are currently 250 drive-thru espresso stands, 18 coffee/tea houses, 52 independent inner-retail espresso stands, and approximately 10 stands in locations such as sports venues, university campuses, and etc. These figures are not including the number of restaurants, bars and cafes that also feature these beverages.

4.2 Target Market Segment Strategy

While the market is already sizeable, this industry continues to grow. New espresso stands open their doors to the public on a monthly basis in our market, and it isn’t uncommon to see numerous espresso stands within a one or two mile radius. The article below, published by a national coffee retail magazine, discusses our market’s unique drive-thru espresso industry. The sales potential in this market is unlimited.

The Coffee Warehouse initially plans to target these drive-thru espresso stands, as well as all inner-retail espresso stands within our designated market. It is this segment that is most in need of the services we are planning to offer. Essential needs include: quality products at competitive prices, first class service, and strong sales support. It is most often these small owner-operated businesses that are neglected by larger suppliers and are forced to service themselves. It is also these smaller businesses who could most greatly benefit from marketing services, sales support, and full service product delivery. Providing the same high-quality service, within the first six months of operation, The Coffee Warehouse plans to expand our target into formal coffee houses and cafes, and as business grows and stabilizes, eventually evaluate the needs of potential customers in the restaurants and bar industry.

4.3 Market Growth

Coffee has been a growing industry for the past several years.  In the gourmet/specialty coffee industry alone, the figures show an impressive rate of growth in the United States.

Bubble Tea has been a rapidly growing market in Asia, though it is relatively new to the United States.   Introduced to trend setting marketings such as San Francisco and Seattle, sales have been exploding – and the craze of the “Tapioca Pearl” is expected to spread throughout America.

4.4 Industry Analysis

The coffee and specialty beverage industry is pulverized, with hundreds of manufacturers, brokers, suppliers and retailers. Unlike the beer/soda industry, with large companies such as Anheuser Busch, Pepsi and Coca Cola controlling most of the market, the coffee and specialty beverage industry does not have large national chains with market control.

In an open industry growing at such a strong rate, The Coffee Warehouse is in position to capitalize on the customer’s need for quality product, exceptional service, and an effective partner to success.

4.5 Industry Participants

With the rate of growth in the gourmet coffee market, in addition to the recent trends in Jet Teas and other specialty beverages, the industry is comprised of many small participants, each focusing on only a few specific items or brands at a time.  As the markets evolve, we expect the industry to consolidate with larger distributors representing more of a vast selection of products in each market.

Currently in our segment of the industry, there are no large national chains with market control.  There are also few products that are offered with exclusive rights to one market.  While this is the case with many products, The Coffee Warehouse is working with manufacturers to change that practice, and not only represent a larger variety of product than others in our industry, but also acquire exclusive rights to many of the products in our portfolio.

4.6 Distribution Patterns

The following flow chart illustrates the overall industry surrounding the distribution patterns of coffee and specialty beverages.   (The Coffee Warehouse falls into the level highlighted in yellow).

Several manufacturers are represented by master distributors and/or brokers who in turn provide the product to direct distributors and other wholesale suppliers.  Other manufacturers allow distributors and suppliers to purchase product direct – depending on the quantity of product being purchased.   Product is then distributed or sold through cash and carry wholesale stores to retail businesses as illustrated below.

4.7 Competition & Buying Patterns

While there are a handful of coffee and specialty beverage suppliers providing product in our market, there is still a great deal of room for new business. Most importantly, there is room for new business that understands the need for high-quality service and sales support – in addition to product at competitive prices.

In this industry, customers choose their suppliers based on available product, price, and service – though most often, it is the service that suffers most. While one supplier may offer the product at the right price, they do not provide the level of service that the customer demands. The next supplier may offer the right level of service, though their prices are too high. This results with the customer purchasing most of their supplies through a cash and carry style wholesale store – leaving the customer with no service or support.

By positioning ourselves in the market with in-demand, quality product at competitive prices, with a consistent high level of customer service – we are confident that we will see customers and their business continue to increase.

Sales and Marketing

The unique aspects of our business include individual product selection, quality assurance, and high-quality full service distribution. Our strategy is to focus 100% of our efforts on the market for espresso supplies in the Spokane and Northern Idaho area. By focusing all of our effort and energy on this particular area, we expect to quickly develop and maintain a leadership position. The Coffee Warehouse’s key personnel will stay in contact with our customers, and will be able to respond to changes in this market much faster than our competitors.

The Coffee Warehouse will offer the best, most highly personalized service in the marketplace. Being a small, owner-operated company, we intend to use this to our advantage to be absolutely certain that every one of our customers receive excellent service. We will go out of our way to make sure that our customers know that they truly matter to us.  Sales reps and in-house personnel who deal with customers will be carefully trained and given wide latitude for insuring that customers are always satisfied.

5.1 Marketing Strategy

Our basic marketing strategy is to work with customers on a one-to-one basis to ensure their supply needs are being met and help develop unique marketing programs for each of them. We intend to prioritize customer service and make it a key component of our marketing programs. We believe that providing our customers with what they want, when and how they want it, is the key to repeat business and positive word-of-mouth advertising. Because we want to develop close working relationships with our customers, we want to establish accounts in as personable a way as possible. It is for this reason that we will overwhelmingly emphasize in-person sales calls to build accounts.

We will closely integrate all of our marketing and sales efforts to project a consistent image of our company and a consistent positioning of our products and services. We will build this image around our name “The Coffee Warehouse, Inc.” and emphasize to customers the high-quality service that is behind this name.

To support our marketing initiatives and product knowledge, we will attend as many area conventions and trade shows as possible to ensure we are offering the most up-to-date market trend information.

5.2 Promotion Strategy

Relationships are the key to success in the distribution business. Personal selling will remain our most important means of promotion. Both Steve and Jennifer Smith will lead this effort – Steve, with his skill and experience in sales and distribution, and Jennifer in customer service and relations.  In addition to personal selling, The Coffee Warehouse has identified several other means of advertising and publicity.

The Coffee Warehouse will send news releases to local media and press, as well as trade magazines to try to get product and company feature coverage in front of the eyes of our customers – as well as the end consumer. We will also produce a few generic press releases about the products we are distributing for our customers to use toward publicity coverage for their businesses in local publications such as the Spokesman, The Inlander and Local Planet.

Third, we shall have a monthly newsletter for current of potential customers. This newsletter will highlight new and current trends in the industry, upcoming conventions and trade shows, offer promotions and special deals, as well as provide new recipes, fun tips and other information that can be used in their business. We will also highlight not just our products, but also display ideas and success stories of other business in the industry.   As a more straight forward advertising effort, The Coffee Warehouse will feature an advertisement in the Yellow Pages, frequent ads in the Spokesman Review, the Inlander, and the Local Planet, as well as participation in networking, local trade shows, and personal word-of-mouth advertising.

5.3 Distribution Strategy

5.4 sales strategy.

Distribution sales are dependent on repeat business, therefore the sales strategy for The Coffee Warehouse is based on personal, consistent sales contact, with a high emphasis on customer service and relations.   Because we are a new distributor, we understand that we will have to prove our worth to our customers in order to earn their respect and business. Both of the owners, Steve and Jennifer, will make personal calls on potential customers to review our product line and services, give general information on our company, and discuss how we feel we can help them succeed in their business.

The Coffee Warehouse will begin operations with two full-time delivery/sales representatives, who will be responsible for providing full service and delivery to current customers, but also make sales calls for potential new business. This delivery/sales representatives will receive a base salary, with commission on qualified sales, as well as bonuses for new acquired business.  Customers will be scheduled for a pre-arranged delivery day once or twice a week, depending on the quantity and timeline of product needed. Product orders can be placed in a number of ways to help facilitate the process:

• Phoned Orders: Customers can easily phone orders into our office, up until 2:30 p.m. of the afternoon prior to their scheduled delivery day.
• Faxed Orders: Customers can fax in a completed product order sheet, with the same deadline as phoned orders.
• Tel-Sell: Customers may choose to have a representative from the office call them the day prior to their scheduled delivery to check product quantities and assist them in placing their order.

We understand the hectic schedule of a small business, so if a customer fails to call or fax their weekly order, they will receive a courtesy call from our office to verify that an order is not needed.

5.5 Sales Forecast

As indicated in the table, our sales are forecasted to increase rapidly, with an annual growth rate of approximately 30%.

5.6 Milestones

The following table and chart are the important milestones for The Coffee Warehouse.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The Coffee Warehouse will be owned and operated by its founders, initially working with a small employee base that will cover sales and delivery. Management and personnel plans are covered in more detail in the topics to follow.

6.1 Organizational Structure

The Coffee Warehouse will be managed by the two founding partners, whose individual areas of expertise cover many of the functional aspects of the business.

The organizational structure is very simple. Steve Smith will be responsible for the routing, distribution management and delivery systems.  Jennifer Smith will be responsible for customer service, accounting, shipping and the general administration of the business.  Together they will be responsible for product selection and sales and marketing.

The support staff at the office and warehouse, as well as the delivery personnel will report to Jennifer.  Because Steve will be spending a majority of his time in the trade, Jennifer will be able to support any day-to-day needs that the personnel may have. However even when Steve is out of the office, he will be in constant contact via computer or phone.

The goal of The Coffee Warehouse is to have a team of committed associates who empower each other so that the customer’s expectations can be exceeded.  Our goal is to offer career opportunities, advancement opportunities and a level of income and benefits that is competitive within the region and job classification.   It is our long-term goal to be the preferred employer within our niche of the beverage distribution industry.

6.2 Management Team

Steven D.  Smith Steve has a long history of experience in sales and distribution management, specifically in the beverage industry. As the sales and distribution manager for the largest beverage distributorship in the state, he currently manages ten sales representatives and twenty four merchandisers.  During this time as sales manager, he has helped increase market share from 25 to 40%.

Over the last twenty years, Steve has successfully built and maintained rapport with buyers in the city’s largest key accounts, and has strategically routed sales, merchandising and truck routes throughout the city.

Steve has many industry contacts and an in-depth knowledge of the market.

Jennifer L. Smith Jennifer recently operated as general manager for a local business and directed a staff of thirteen, overseeing the accounting practices, human resource issues, and day-to-day operations of the company.  Prior to this position, Jennifer has held a variety of other inside business management and operations positions.

Jennifer’s strengths and skills include strong management, excellent public relations, high levels of organization, extensive computer knowledge – including desktop publishing and graphic layout – and extensive presentation and reporting skills.

6.3 Personnel Plan

PERSONNEL – GENERAL Initially we expect to be able to handle business needs with Steve and Jennifer, one administrative assistant, and two product delivery/sales personnel. As business continues to grow, we intend to hire additional employees one at a time and pay premium, over market labor rates to attract and retain quality help.

Not only will we train our employees to deliver excellent service, we will give them the flexibility to respond creatively to client requests. In addition, we will continually monitor our clients’ level of satisfaction with our service through surveys and other convenient feedback opportunities.

To ensure our personnel are meeting our expectations, we will hold a minimum of quarterly meetings with all employees so that results can be reviewed and future plans can be discussed. At least twice a year, a refresher course will be required on product knowledge and how to exceed our customer’s expectations.

SALES AND DELIVERY In order to deliver high quality, personalized service we will carefully select all employees – with extra attention given to sales reps and delivery personnel who will deal directly with customers. We will carefully review references not just from past employers or manufacturers, but also from retailers whom these sales reps have served. We will also make sure that each employee understands our way of delivering quality service to each customer. We will have immediate back-up support available by phone from our office for more difficult service issues. We will also give employees enough latitude so that they can respond immediately to almost any customer request or complaint – which in this industry usually means granting immediate credit for damaged merchandise, and adding additional merchandise to an order.

Financial Plan investor-ready personnel plan .">

The Coffee Warehouse projects the gross margin to be at approximately 20-25 percent. Sales projections for FY2004 are at $2,229,652 increasing to $2,558,584 in FY2005 and $2,936,137 in FY2006. Cash-flow analysis, balance sheet, business ratio, break-even analysis, and other financial details are shown in the appendix.

7.1 Important Assumptions

General assumptions for this plan are on the following table.

7.2 Break-even Analysis

The following table and chart illustrate our break-even analysis. With our fixed costs estimate of approximately $15,000 per month, operating on average at a 25% profit margin, we will need to sell 67,666 units to break-even in a month. Fixed costs include our warehouse lease, vehicle leases, utilities, insurance, payroll, and an estimation of other running costs.

7.3 Projected Profit and Loss

The following table and charts show the projected profit and loss. Monthly projections are included in the appendix.

7.4 Projected Cash Flow

The following table shows cash flow for the three years, and the chart illustrates monthly cash flow in the first year. Monthly cash flow projections are included in the appendix.

7.5 Projected Balance Sheet

The projected balance sheet is shown in the following table, with monthly projections in the appendix.

7.6 Business Ratios

The table shows projected business ratios.

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Distribution Company Business Plan Template [Updated 2024]

Distribution Company Business Plan Template

If you want to start a distribution business or expand your current distribution business, you need a business plan.

The following Distribution Company business plan template gives you the key elements to include in a winning Distribution business plan.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Below are links to each of the key sections of your Distribution Company business plan: I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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Distribution Company Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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DISTRIBUTION STRATEGY

The big picture on distribution strategy.

Distribution models drive the economics and growth potential of companies.

Many companies are innovating through low-cost and viral digital and online distribution channels.

In most industries, some company is compressing the value chain by going direct...shouldn't it be you?

When growing distribution, focus on alignment and synergy with other business model elements.

THERE ARE 3 MAIN DISTRIBUTION STRATEGIES

Distribution is how a business makes its value proposition available to customers. There are three main distribution strategies:

1. Direct - company-owned channels

2. Indirect - 3rd party channels

3. Hybrid - both company-owned & 3rd party

Direct distribution is about company-owned channels, which could include a company's website, contact center, sales team , retail, and office locations. Indirect distribution is about intermediaries such as distributors, agents, brokers, online-only and omnichannel retailers, value-added resellers, partners , and franchisees. Hybrid distribution utilizes both direct and indirect channels.

1. Going Direct - Customer Experience & Economics

More and more companies are moving from indirect distribution to direct or hybrid distribution. These companies want to lower costs and pricing by compressing the value chain while owning the customer experience and relationship.

Companies with direct distribution remove an often expensive intermediary from the value chain. Much of traditional retail utilizes keystone pricing (100% markup, $10 factory cost translates to $20 wholesale, which translates to $40 retail). By going direct, a company can take that $10 product and price it at $25 or $30, while making much more in gross margin. The first retail direct distribution innovators were back in the 70s with the likes of The Gap, Victoria's Secret, and other vertically integrated retailers. Today companies like Anker (power packs) and Vice (golf balls) are utilizing direct and low-capital, low-cost online channels to disrupt their markets .

Direct distribution also gives the company ownership to craft and manage their customer experience and relationship, which drives conversion, and loyalty and is crucial for complex sales, and innovative products and services. Apple took the world by storm by going direct with Apple Stores, and Tesla did the same when they rolled out Tesla showrooms in high-traffic malls. Both Tesla and Apple differentiated themselves from their competition by owning their customer experience and relationship, while also benefiting from compressing their value chain.

Pretty much every industry has innovators leveraging direct distribution to improve the customer experience and relationship, cost and pricing economics , and overall agility. If your business isn't direct, it may be time to try and figure it out.

2. Indirect Distribution - Efficiently Scaling

A company with indirect distribution, partners with 3rd parties to sell and fulfill a company’s value proposition. These 3rd parties can be retailers, value-added resellers (VARs), partners, franchisees, distributors, and brokers. For many industries, such as the beverage industry (Coke, Pepsi), the norm is to leverage indirect distribution, in the form of distributors, supermarkets, convenience stores, vending machines, and restaurants. Even in a predominately indirect distribution industry, such as beverages, there are always players looking to take out middlemen, such as Trader Joe's, an entire grocery retailer that only sells its own brands.

Companies often utilize indirect distribution to focus on their core competencies , while gaining access to customers by leveraging channel partners. A company with indirect distribution gives up margin to channel partners but saves on the costs and capital necessary to go direct. For a company leveraging indirect distribution, the key to growing sales is to drive better value and economics for channel partners than the competition . For retailers, it is driving superior gross margin dollars per square foot. For VARs, it is total sales and margin versus the cost of sales.

If your company primarily leverages indirect distribution, deeply understand players that are going direct, because they are most likely changing the industry dynamics through better economics and more consistent and elevated customer experiences.

3. Hybrid - Almost the Best of Both Worlds

Many companies have a hybrid distribution model, utilizing both 3rd party and direct channels to sell and fulfill their value proposition . With hybrid distribution, companies get the broad distribution of indirect channels, while owning the customer experience and expanding margin through their direct channels.

Nike is a great example of a hybrid distribution model. Nike sells in tens of thousands of 3rd party stores and retailers across the world. Yet, in 2017, direct channels, including Nike.com, and more than 1000 flagship and outlet stores accounted for  28% of Nike's total sales versus 10% in 2010. And, Nike is differentiating their direct channels with personalized Nike ID shoes, exclusive styles, and the broadest selection. Not only are they owning the customer experience, relationship, and data through direct channels, but they

Nike has a hybrid distribution model. Nike sells in tens of thousands of 3rd party stores and retailers across the world. Nike also has direct channels, including Nike.com, and more than 1000 flagship and outlet stores accounted for 28% of Nike's total sales in 2017 versus 10% in 2010. Nike is differentiating their direct channels with personalized Nike ID shoes, exclusive styles, and the broadest selection. Nike is heavily investing in their direct channels because they own the customer experience and make 2-3X in gross margin on each pair of shoes they sell directly versus indirectly. Nike sells a pair of shoes that cost $20 to the manufacturer to a retailer for $40, and the retailer marks it up to $80 to the customer. In this example, Nike would make $20 on the shoes, but if they sell them on Nike.com for $80, then they would make $60 in margin on the shoes. This margin expansion is a big reason why more companies are going direct.

The one longer-term potential disadvantage of a hybrid model is that a direct distribution model could come in and structurally undercut the pricing of the industry.

If you are looking for a business coach to collaborate on your distribution strategy, set up some on-demand one-on-one time with Joe Newsum , the creator of this content and a McKinsey alum

DISRUPTIVE DISTRIBUTION MODELS

Disruptive distribution models are becoming more and more central to the core strategy of companies. Think about Southwest, which doesn’t sell tickets through Expedia, Priceline, and travel agents, but only on southwest.com and 1-800-I-FLY-SWA. Tesla has redefined car retailing with showrooms in shopping malls, bypassing typical dealer networks. Apple wanted to give customers the ultimate showroom to showcase their new products and opened the most productive and profitable retail store network in the world.

Maybe your distribution model is what it is, and you have to follow what the industry does. Though, given the reach and innovation of online distribution models, and what other competitors might be doing in innovating their distribution model, it may make sense to reexamine your distribution model and take some time to think through if you have the right distribution model for your situation or you need to innovate .

In 2012, Dollar Shave Club took the world by storm through distribution innovation. Michael Dubin, the founder of Dollar Shave Club, identified the age-old problem that, " razors are really expensive in the store. It's a frustrating experience to go and buy them. You have to drive there. You have to park your car. You have to find the razor fortress. It's always locked. You have to find the guy with the key. He's always doing something else that he doesn't want to be helpful."

At the time, the razor market was on the plateau of its adoption curve , and was a typical mature market two-company race, with Gillette owning 80% of the market and Schick a distant second. In 2012, a Gillette Fusion ProGlide blade would have set you back a cool $4. So, when Dollar Shave Club, comes out of nowhere with the coolest bootstrapped $4,500 viral ad to ever hit Youtube, promising "F**cking Great" blades for $1 a month, customers loved the value proposition. Within two days of the viral video, Michael's team racked up 12,000 orders and ran out of supply.

At the heart of Dollar Shave Club's value proposition is the cost savings that are passed on to the customer from disintermediating traditional shaving industry distribution of retail stores. Then add on the cost savings of bypassing traditional marketing for cost-effective viral marketing , and you can start to understand the $1 a month for blades value proposition.

The value proposition and go-to-market were so strong that Dollar Shave Club grew to $65 million in revenue in two years, and in five years had 8% of the market and $240 million in revenue. In 2016, Unilever bought Dollar Shave Club for $1 billion.

The Big Decision - Which Distribution Model?

When Expanding, Think About Distribution Models

DIRECT DISTRIBUTION GROWTH STRATEGY

If you have direct distribution, then you need to focus on the strategies for your direct channels, which may include a website, contact center(s), sales staff, and locations. Your direct channels are an integral part of your overall customer funnel. You drive revenue growth by increasing and accelerating awareness, consideration, conversion, loyalty (repeat business), and advocacy . Understanding where your customer funnel excels and lags is critical to prioritizing investments. Read up on developing and executing a great sales strategy and marketing strategy . Furthermore, there are the foundational operations and IT strategies necessary to drive efficient and effective execution within your website and contact centers.

If you have locations, then you have three options to grow:

1. Optimize Locations

2. Grow the Number of Locations

3. Rationalize Locations

Optimizing locations involves driving revenue per location through operational and service excellence, new leadership , remodeling, and improving sales and marketing. For growing the number of locations, leverage the geographic strategy module to understand how to choose the right geographies to expand into that are aligned with your targets and economics. While rationalizing locations is often necessary to shed unprofitable and non-aligned locations from the portfolio.

INDIRECT DISTRIBUTION GROWTH STRATEGY

3 Main Options to Grow Indirect Distribution

There are three main ways to grow revenue with 3rd party channel partners, 1. Optimize, 2. Grow Points of Distribution, and 3. Rationalize. 

1. Optimize – Increase sales within existing channels by improving the value proposition, customer journey, marketing, and sales

2. Grow Points of Distribution – Increase the total number of productive points of distribution (e.g., channel partners, stores)

3. Rationalize – Shed points of distribution that are non-productive, or are not aligned with the brand, customers, markets, or other business model elements

1. Optimize Channel Partners

In the end, the relationship between a company and its channel partners always comes down to value. The more value a company can drive through a channel partner, the more the channel partner will focus on the company. Channel partnerships are co-dependent relationships. Similar to the overall business model strategy , it is crucial to differentiate the customer value proposition and amplify the sales and marketing strategies within a channel partner while providing them with efficient processes and operations.

So, when thinking about growing sales within existing channel partners, answer the following questions :

How can you differentiate your value proposition with and improve the overall economics for your distribution partners?

What marketing campaigns and strategies will drive volume for your distribution partners?

What sales support strategies will drive velocity and conversion in your channel partners' sales cycles?

What processes need improvement to better support channel partner growth and satisfaction?

1. Optimize : Utilize a Partner Growth Plan

2. Grow Points of Distribution

3. Rationalize Channel Partners

Putting it all together in a plan.

Distribution is a critical growth element of any business model. Whether you rely on direct, indirect or hybrid distribution, it is important to develop a strong distribution strategy to focus the execution of the teams.

If you would like to talk to an expert about your distribution strategy, set up some time with Joe Newsum , a McKinsey Alum with significant experience with distribution strategy.

download the distribution strategy worksheets & templates

To get you started on creating a killer distribution strategy, download the free PowerPoint Distribution Strategy Worksheets & Templates, which includes:

1. Distribution Partner Growth Plan 2. Distribution Partner Assessment Matrix 3. Distribution Growth Strategy One-Pager

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Distribution Business Model – Everything You Need to Know

Do you want to start a distribution business? If YES, here is everything you must know about the distribution Business model plus examples of successful companies. Being in business is tough, hence the need to choose a business model that you can run your business on. The truth is that you can hardly make success out of your business if you don’t build and operate your business on an existing model that suits your business.

A quick tip is to look around you and find out the type of business model the company you are patterning your business after is operating. With that, you would have eliminated the time and resources wasted in trial and error approach. You will just settle down to your business with little or no stress.

But on the average, one of the business models that an investor who is looking towards starting a business in the united states of America should consider adopting is the distribution business model. One good thing about the distribution model is that you don’t necessarily need to manufacture products of your own, you can comfortably engage in the distribution of the products of a company or several companies at the same time.

If you are making plans to start a distribution business or you are already running a distribution business but your need to know more about the business model and some of the leading companies that are already operating this business model, then you will find this article highly useful.

What is a Distribution Business Model?

Distribution business model is a business model that facilitates that distribution of goods and services from the producers / manufacturers to the end users / consumers; it is a business model that ensures that products and services reach target customers in the most direct and cost-efficient manner. If it is services, distribution is predominantly concerned with access.

In the actual sense, the distribution model is a concept that is relatively simple and straightforward. In practice, distribution business model may involve a diverse range of activities and disciplines including: detailed logistics, transportation, warehousing, storage, inventory management as well as channel management including selection of channel members and rewarding distributors.

3 Strategies Adopted by Operators of Distribution Business Model

The strategy adopted by a company operating on the distribution business model to a large extent depends on a number of factors such as the type of products to be distributed, especially perishability; the market served; the geographic scope of operations and the organizations’ overall mission and vision. With that, you will be able to pattern your business to suit the distribution business model.

In the case of intensive distribution approach, the marketer relies on chain stores to reach broad markets in a cost – efficient manner. Basically, we have three strategies that operators of distribution model adopt and they are;

Mass Distribution

Mass distribution which is also known as intensive distribution is a distribution strategy that is used basically for products that are produced or manufactured for a mass market, the marketer will seek out intermediaries that appeal to a broad market base.

It is common to find industrial giants who are into mass production of products adopt this distribution strategy to get their goods or services to every nooks and crannies of their target market location.

For example, it is only but natural for a company like Coca Cola that adopts mass distribution strategy to distribute cum retail their products. Little wonder there is hardly any location in the United States of America or in major cities all across the world that you won’t find Coca Cola products.

2. Selective Distribution

Selective distribution strategy is a distribution strategy that enables the manufacturer of a product or services to restrict the number of outlets retailing their products. Despite the fact that there are some drawbacks to this distribution strategy, but you can’t rule out the fact that it has loads of benefits.

Some of the benefits includes the ability to control your distribution chains, train your distributors to be able to better market your products and buy into the organization’s overall business goal or the big picture why the products is on sale. For example, the manufacturers of some luxury cars might restrict the distribution and sale of their products to only selected and accredited distributors who are trained and have been able to prove their worth in the business.

3. Exclusive distribution

Exclusive distribution strategy is a distribution strategy where the manufacturer of a product or services chooses to deal with one intermediary or one type of intermediary. Just like selective distribution strategy, exclusive distribution strategy has a handful of drawbacks, but it has its own advantages especially if you are into the production of goods that are not meant for the general public.

One major advantage of an exclusive distribution strategy is that the manufacturer retains greater control over the distribution process.

In exclusive distribution strategy, the distributor is expected to work closely with the manufacturer and add value to the product through service level, after sales care or client support services. The most common type of exclusive arrangement is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographic area to carry the supplier’s product.

Distribution Channels and Intermediaries

In practice, distribution of goods and services are carried out via a marketing channel which can be referred to as a distribution channel. A marketing channel is made up of the people, organizations, and activities that are necessary to transfer the ownership of goods from the point of production to the point of consumption or the end user.

It is the process by which products or services get to the end-user, the consumer. This is usually accomplished through merchant retailers or wholesalers or, in the international context, by importers. Please note that in certain specialist markets, agents or brokers may become involved in the marketing channel.

Distinctive Intermediaries Involved in the Distribution Business Model

A wholesaler is a merchant intermediary who sells primarily to retailers, other merchants, or industrial, institutional, and commercial users mainly for resale or business use. Wholesalers essentially sell in large quantities and it is rare to find them selling directly to end users or consumers.

An agent is a distinctive intermediary who is authorized to legally act for a principal in order to transact business on their behalf or facilitate exchange of good and services as instructed by the principal. Unlike merchant wholesalers and retailers, agents do not take title to goods, but simply put buyers and sellers together. Agents are typically paid via commissions by the principal. For example, real estate agents are paid a commission of around 5 – 15 percent for accommodation leased, rented out or sold.

A jobber is a unique type of wholesaler who is known to operate on a small scale and sells only to retailers or institutions. Jobber, in merchandising, can be synonymous with “wholesaler” or “distributor” or “broker” or “middleman.” A business which buys goods and bulk products from importers, other wholesalers, or manufacturers, and then sells to retailers, was historically called a jobbing house.

For example, rack jobbers are small independent wholesalers who operate from a truck, supplying convenience stores with snack foods and drinks on a regular basis. If you operate a distribution model, then you should learn how to Manage your distribution channels.

Operating a distribution business model requires that the organization’s marketing department and logistic team to design the most suitable channels for the products and services produced by the organization, then select appropriate channel members or intermediaries. An organization may need to train staff of intermediaries and motivate the intermediary to sell the firm’s products.

The organization is expected to monitor the channel’s performance over time and from time to time improvise on how to continuously improve the channel to boost performance in the market place. This is highly necessary because competition is expected to grow in your line of business. In the bid to continue to improve your performance in the market place, you are expected to continue to motivate players in your distribution channels to deliver.

There are several ways a company that is operating the distribution business model can motivate intermediaries working in their distribution value chain to deliver. You can leverage on making use of positive actions, such as offering higher margins to the intermediary, special deals, premiums and allowances for advertising or display of products, free trainings and competitive credit facility in terms of releasing goods and getting back your money later.

On the other hand, negative actions may be necessary, such as threatening to cut back on margin, or hold back delivery of products or services. Please note that caution must be applied when considering negative actions because these may fall foul of regulations and can contribute to a public backlash and a public relations disaster.

It is expected that conflict of interest may arise amongst players in your distribution channels hence you need to know how to handle it; The truth is that conflict of interest may likely arise amongst your distribution channel and this can happen when one intermediary’s actions prevent another intermediary from achieving their objectives.

Vertical channel conflict occurs between the levels within a channel, and horizontal channel conflict occurs between intermediaries at the same level within a channel. Channel conflict is a perennial problem. There is a possibility that an influential channel member may monopolize and coordinate the interests of the channel for personal gain.

Lastly, in order to continue to push your products to end users and consumers, you must place premiums on your customer – customer value;

If you are in business, aside from the quality of your products and services, the value you place on your customer is one major factor that will help you to continue to sell your product or services to them. The truth is that if you have a good product and bad customer services; not placing value on your customer, it won’t be too long before you to lose your customer and experience depletion in your income.

This is one of the chief reasons why most organizations spend more to establish customer service; a medium through which they can receive complaints and feedback from their clients. The essence of distributing a product is for it to get to end users and consumers and if they feel that they are not treated well; they are likely going to look for alternative product or service providers.

50 Successful Companies Operating the Distribution Business Model

• Anchor Distributors
• Barnes & Noble
• Diamond Comic Distributors (comics)
• Capital City Distribution (comics, acquired by Diamond)
• Greenleaf Book Group, distributor and hybrid publisher
• Heroes World Distribution, now owned by Marvel Comics
• Two Rivers (formerly Perseus Distribution)
• Small Press Distribution
• Baker & Taylor, united kingdom
• W. Grainger
• Motion Industries
• The Fastenal Company
• McMaster-Carr
• MRC Global Corp.
• MSC Industrial Supply
• Applied Industrial Technologies
• NOW Inc. (DistributionNOW)
• Wurth – Americas
• Vallen Distribution
• Interline Brands
• Edgen Murray
• Wolseley Industrial Group
• Kaman Distribution Group
• DXP Enterprises
• ERIKS North America 21. Global Industrial
• The United Distribution Group
• Bearing Distributors Inc. (BDI)
• Turtle & Hughes
• BlackHawk Industrial
• Gas And Supply Co.
• FCX Performance
• SBP Holdings Inc.
• R S Hughes Co.
• OTP Industrial Solutions
• Lawson Products
• Dillon Supply Company / Descours et Cabaud
• Ryan Herco Flow Solutions
• Kimball Midwest
• Walt Disney Studios Motion Pictures
• Warner Bros.

More on Business Model

Distribution Plan Template

What is a Distribution Plan?

A distribution plan outlines the processes and resources necessary to move a product from its point of origin to its consumers. This plan typically includes a detailed overview of the different channels and locations where a product will be stored, manufactured, and shipped. It also outlines the key performance indicators (KPIs) that will be used to measure the effectiveness of the plan. By creating a comprehensive distribution plan, businesses can optimize their supply chain operations and improve customer satisfaction.

What's included in this Distribution Plan template?

• 3 focus areas
• 6 objectives

Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.

Who is the Distribution Plan template for?

This Distribution Plan template is designed to help supply chain and logistics teams plan and optimize the distribution of products or materials. It can be used by anyone responsible for designing and executing a distribution plan, including supply chain managers, logistics specialists, and warehouse personnel.

1. Define clear examples of your focus areas

A Focus Area is a broad area of the supply chain process that the team wants to improve. Examples of Focus Areas could include ‘Optimizing Distribution Network’, ‘Optimizing Inventory Management’, and ‘Enhancing Customer Satisfaction’. For each Focus Area, the team should identify and outline specific objectives, measurable targets, and related projects that need to be completed.

2. Think about the objectives that could fall under that focus area

An Objective is a goal that the team wants to accomplish for each Focus Area. Objectives should be specific and measurable, and should be achievable within a given time frame. Examples of some objectives for the focus area of Optimize Distribution Network could be: Reduce Operational Inefficiency , and Increase Delivery Reach .

3. Set measurable targets (KPIs) to tackle the objective

A Key Performance Indicator (KPI) is a metric that is used to measure the success of a project. KPIs should be quantifiable and measurable, and should be set with an initial value and a target value. For example, for the objective to ‘Reduce Operational Inefficiency’, a KPI could be to ‘Decrease order processing time from 16 minutes to 5 minutes’.

4. Implement related projects to achieve the KPIs

A Project (or Action) is the specific initiative that needs to be taken in order to achieve a KPI. Projects are the steps that need to be completed in order to achieve the desired KPI. For example, for the KPI to ‘Decrease order processing time from 16 minutes to 5 minutes’, a related project could be to ‘Automate manual processes’.

5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy

Cascade’s Strategy Execution Platform is the perfect tool to help teams efficiently plan, track, and measure the success of their distribution plan. With Cascade, teams can easily monitor KPIs, track progress on projects, and quickly identify any areas that need improvement. By utilizing Cascade’s platform, teams can ensure that their strategies are implemented in a timely and efficient manner.

Distribution Plan

Book a call with a mentor and optimize your operations.

Do you ever wonder how your favorite products get from the factory to your doorstep? Or how do businesses decide which stores to sell their products in? 

Well, that’s where a distribution plan comes in! 

A distribution plan is like a roadmap that helps businesses get their products to the right customers, at the right time, and in the right place. Without a solid distribution plan, businesses can struggle to get their products in front of potential customers and can lose out on valuable sales. 

In this post, we’ll dive into the world of distribution planning and explore the key components and best practices for creating a successful plan.

Shall we start?

What is a distribution plan?

A distribution plan is a detailed strategy that outlines the steps required to move a product or service from production to the final customer. It includes logistics, channels of distribution, market research, budget, metrics, and review and adjustment. 

The distribution plan’s benefit is that it aids companies in effectively targeting their target market while maximizing resource allocation. The timely and affordable delivery of goods or services to customers boosts customer satisfaction and boosts corporate revenues thanks to a well-planned distribution plan.

Without a distribution plan, businesses can find it difficult to provide goods or services to clients, which could harm their reputation and reduce their profitability. Each business that wants to be successful and continue to be competitive and meet customer demand must have a distribution plan.

Creating a distribution plan

Now that you have a solid idea of what a distribution plan is, let’s go into the procedures and pointers for developing a distribution strategy that benefits your company.

• Understand your target audience needs: Identify and comprehend the target group’s particular requirements and preferences .
• Determine logistics: Find the most efficient and affordable way to transport the good or service from the point of production to the consumer or end-user.
• Choose distribution channels: Choose the finest distribution channels for reaching clients, including direct sales, online sales, retail stores, wholesalers, and distributors.
• Conduct market research: Identify the most efficient ways to reach potential customers by conducting market research to better understand consumer preferences and purchasing patterns.
• Develop a budget: Prepare a budget that accounts for all expenses related to the distribution plan, such as marketing, publicity, logistics, and transportation.
• Set performance metrics: Specify performance indicators, such as customer satisfaction, sales volume, and market share, to gauge how well the distribution plan is working.
• Evaluate and modify your plan: Assess the distribution plan on a regular basis and make revisions in response to shifting market conditions, client demands, and other elements that could affect the plan’s success.

Best practices for creating a successful distribution plan

Creating a successful distribution plan requires a combination of strategic thinking, market knowledge, and operational efficiency. Here are some best practices for creating a successful distribution plan:

• Focus on the customer: Make sure your distribution plan is centered around meeting the needs and preferences of your target customers.
• Be flexible and adaptable: Be prepared to adjust your plan based on changing market conditions, customer needs, and other factors that may impact your distribution strategy.
• Collaborate with partners: Work closely with suppliers, distributors, and other partners to ensure that all aspects of the distribution plan are aligned and optimized.
• Use technology to optimize logistics: Leverage technology solutions to streamline logistics, improve inventory management, and reduce costs.
• Continuously monitor and evaluate performance: Regularly review performance metrics and use data insights to optimize your distribution plan.
• Stay up to date on market trends and competition: Keep a close eye on industry trends and your competitors to stay ahead of the curve and remain competitive.

Final Thoughts

In order to get your goods or services into the hands of your clients, you need a distribution plan. By making the most of your resources to the fullest extent possible and routinely modifying your plans, you can boost your business sales and remain competitive.

It’s essential to spend the required time developing a solid distribution plan that meets the objectives of your business and delivers your products to your target market. Start today and see the results for yourself!

Frequently Asked Questions

A distribution plan outlines the steps required to move a product or service from production to the final customer, ensuring that the right product is delivered to the right place, at the right time, and in the right condition.

To design a distribution strategy, you must first identify your target audience and their demands, as well as the most effective logistics, distribution channels, and market research. You should also develop a budget, establish performance criteria, and periodically evaluate and tweak the plan.

Understanding consumer preferences and purchasing patterns can help firms make decisions regarding the distribution channels to use and the best ways to manage logistics.

The success of a distribution plan can be evaluated using performance indicators including customer satisfaction, sales volume, and market share.

It’s critical to periodically assess and modify your distribution plan in light of evolving market conditions, client demands, and other elements that could affect the plan’s effectiveness.

Businesses may optimize logistics, enhance inventory management, and cut expenses with the aid of technological solutions including inventory management systems, transportation management systems, and analytics tools.

Suggested mentors to help you make sense of Distribution Plan

Growth focused B2B Innovation & Strategic Marketing Leader

Todd brings more than 25 years of working in innovation, marketing, and product-related roles across a variety of industries including Materials, Automotive, Industrial, Consumer Electronics to Food Service, and Retail applications.

Also an expert in:

• Product Management
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Yuval Davidor

CEO, Founder, Serial entrepreneur, PhD

While I have considerable entrepreneurial and management track record across different companies, industries and business types, what I really enjoy is making sense of strategy, getting out of a crisis, troubleshooting and developing authentic management style in executives.

Irina Kremleva

Revenue growth | Digital & Business Transformation | Product management | Strategic Finance | Leadership mentoring

Head of Revenue growth in Pepsico Germany, Switzerland and Austria. My previous experiences include over 12 years in AB Inbev where I gained a unique mix of expertise by working in various functions such as Finance, Revenue management, Commercial and Marketing across multiple geographies globally.

• Idea Validation
• Pricing Strategy

Umit Eroglu

B2B Growth Executive / Entrepreneur

I am the co-founder of an early-stage IoT startup and former growth executive at an AI startup in automotive. Before, I was responsible for growth & profitability for a product with MRR and >600k customers. If you are a B2B STARTUP, I can help you to find the best ways to GROW on any STAGE.

• Bootstrapping
• Customer Success
• Design / UX
• Go to market strategy
• Idea validation
• Pricing strategy
• Buyer Journey
• Buyer Persona
• Chicken and Egg Problem
• Go To Market Strategy

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Food Distribution Business Plan

Any retail food business is incomplete without a food distribution business, so the growth in this field is wild. But to achieve all the growth you will need an actionable business plan as a roadmap to your business.

Need help writing a business plan for your food distribution business? You’re at the right place. Our food distribution business plan template will help you get started.

Free Business Plan Template

Download our free food distribution business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Food Distribution Business Plan?

Writing a food distribution business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

• Market Opportunity: Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.
• Marketing & Sales Strategies: Outline your sales and marketing strategies—what marketing platforms you use, how you plan on acquiring customers, etc.
• Financial Highlights: Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.
• Call to Action: Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Describe what kind of food distribution company you run and the name of it. You may specialize in one of the following food distribution businesses:

• Wholesale food distributors
• Specialty food distributors
• Frozen food distributors
• Beverage distributors
• Snack food distributors
• Describe the legal structure of your food distribution company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.
• Owners: List the names of your food distribution company’s founders or owners. Describe what shares they own and their responsibilities for efficiently managing the business.
• Mission Statement: Summarize your business’ objective, core principles, and values in your mission statement. This statement needs to be memorable, clear, and brief.
• Future Goals: It’s crucial to convey your aspirations and vision. Mention your short-term and long-term goals; they can be specific targets for revenue, market share, or expanding your services.

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

• Competitive Analysis: Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your food distribution services from them. Point out how you have a competitive edge in the market.
• Regulatory Environment: List regulations and licensing requirements that may affect your food distribution company, such as food & drug administration, state & local regulations, business licensing & regulations, etc.

Here are a few tips for writing the market analysis section of your food distribution business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

• Bakery items
• Packaged goods
• This may include supplier evaluation & selection, product inspection & testing, temperature control, quality control measures, etc.
• Additional Services: Mention if your food distribution company offers any additional services. You may include services like, menu planning assistance, product customization, private labeling, or assistance with new product development.

In short, this section of your food distribution plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

• Pricing Strategy: Describe your pricing strategy—how you plan to price your services and stay competitive in the local market. You can mention any discounts you plan on offering to attract new customers.
• Marketing Strategies: Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, email marketing, content marketing, print marketing, etc.
• Sales Strategies: Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include partnering with other businesses, offering referral programs, etc.
• Customer Retention: Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts & offers, personalized service, etc.

Overall, this section of your food distributor business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your food distribution business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

• Staffing & Training: Mention your business’s staffing requirements, including the number of employees or warehouse staff needed. Include their qualifications, the training required, and the duties they will perform.
• Operational Process: Outline the processes and procedures you will use to run your food distribution business. Your operational processes may include sourcing & procurement, inventory management, warehousing & storage, order processing, packing & packaging, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your food distribution business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

• Founders/CEO: Mention the founders and CEO of your food distribution company, and describe their roles and responsibilities in successfully running the business.
• Key managers: Introduce your management and key members of your team, and explain their roles and responsibilities.
• It should include, key executives(e.g. COO, CMO.), senior management, and other department managers (e.g. operations manager, customer services manager.) involved in the food distribution business operations, including their education, professional background, and any relevant experience in the industry.
• Organizational structure: Explain the organizational structure of your management team. Include the reporting line and decision-making hierarchy.
• Compensation Plan: Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.
• Advisors/Consultants: Mentioning advisors or consultants in your business plans adds credibility to your business idea.
• So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.

This section should describe the key personnel for your food distribution services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

• Profit & loss statement: Describe details such as projected revenue, operational costs, and service costs in your projected profit and loss statement . Make sure to include your business’s expected net profit or loss.
• Cash flow statement: The cash flow for the first few years of your operation should be estimated and described in this section. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.
• Balance Sheet: Create a projected balance sheet documenting your food distribution business’s assets, liabilities, and equity.
• Break-even point: Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.
• This exercise will help you understand how much revenue you need to generate to sustain or be profitable.
• Financing Needs: Calculate costs associated with starting a food distribution business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your food distribution business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample food distribution business plan will provide an idea for writing a successful food distribution plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our food distribution business plan pdf .

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Frequently asked questions, why do you need a food distribution business plan.

A business plan is an essential tool for anyone looking to start or run a successful food distribution business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your food distribution company.

How to get funding for your food distribution business?

There are several ways to get funding for your food distribution business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your food distribution business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your food distribution business plan and outline your vision as you have in your mind.

What is the easiest way to write your food distribution business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any food distribution business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

What's the importance of a marketing strategy in a food distribution business plan?

Marketing strategy is a key component of your food distribution business plan. Whether it is about achieving certain business goals or helping your investors understand your plan to maximize their return on investment—an impactful marketing strategy is the way to do it!

Here are a few pointers to help you understand the importance of having an impactful marketing strategy:

• It provides your business an edge over your competitors.
• It helps investors better understand your business and growth potential.
• It helps you develop products with the best profit potential.
• It helps you set accurate pricing for your products or services.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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Distribution Channels: Types, And Examples – Updated 2024

A distribution channel is the set of steps it takes for a product to get into the hands of the key customer or consumer. Distribution channels can be direct or indirect. Distribution can also be physical or digital, depending on the kind of business and industry.

Table of Contents

Distribution Types Database

Why a distribution channel strategy matters

Often companies undervalue distribution channels as they think that a good product or service will automatically create its distribution.

While this might happen, it is more of a utopia than a reality.

Distribution needs to be created, at times with sheer force combined with strategic planning and a deep understanding of customers’ needs or desire generation.

A traditional distribution strategy looks at the classic 4 Ps  (product, promotion, price, and placement).

Those are the key ingredients to growing the revenues of a business, quickly and sustainably. Thus, a distribution strategy starts from:

• Understanding the wants of their customers.
• Leveraging insights to create a better purchasing experience.
• Developing new products and services that customers will want to buy.
• Creating go-to-market strategies that reach the proper customer target.
• Generating demand for a set of products and services offered.

Without an appropriate strategy for distribution, it is hard to have a successful and sustainable business model .

Types of distribution channels

At a higher level, distribution channels can be broken down into direct channels and indirect channels.

This primarily depends on how long is the chain between who makes the product and the final consumer.

The number of steps it takes will make the distribution channel direct or indirect.

Let’s visualize a distribution chain to understand the difference between direct and indirect strategy :

Where in a direct distribution strategy a producer can access the consumer, in an indirect distribution strategy , the producer will meet its consumer demands via third-parties wholesalers or retailers.

Thus, a direct approach makes the value chain shorter and at the same time allows more control by the producer on how the final customer experiences the product or service offered.

At the same time, a direct-to-consumer strategy is quite expensive and not always effective enough to allow proper distribution.

Therefore, companies often use a mixture of direct and indirect distribution strategies, which determine their marketing mix.

Between the direct-to-consumer and entirely indirect distribution strategy (where the producer sells to a wholesaler), there are several indirect variations based on how many steps it takes to reach the final consumer and how long is the value chain.

For instance, in the scenarios in which a producer sells to a wholesaler, the wholesaler sells to retailers, who reach the final consumers.

However, in some other cases, the distribution channels might be shorter.

Think of the Costco business model , where the company purchases a selected variety of goods in bulk from producers.

Yet instead of reselling that to retailers, Costco itself acts as a retailer by leveraging its membership-based business model  and selling those items in bulk quantity directly to consumers, who appreciate the convenience of its prices together with the selection of high-quality products.

Case study: Apple’s direct and indirect distribution mix

In other cases yet, the distribution channels strategy might be even shorter. Take the example of the Apple business model, where the company sells part of its products via its retail stores.

That creates a unique experience for Apple ‘s consumers and makes the value chain shorter but it also leverages an indirect strategy to make those same products (usually quite expensive) more accessible to mass consumers.

Related : Successful Types of Business Models You Need to Know

Distribution channel vs. supply chain

It is easy to confuse and mix up the definition of distribution channels with the supply chain even though the distribution channels and strategies might sometimes cross with the supply chain.

The distribution strategy concerns primarily with bringing the product in front of customers, especially customers that are willing and ready to buy it.

Therefore, in some cases, bringing a product in front of the right people might be a matter for the supply chain.

For instance, in the Luxottica business model , vertical integration means the ability to control the full customer experience and to choose also the location of the retail stores.

Thus, this is a case in which supply chain management also becomes a distribution strategy . That is why, other players, in the same space, try to enter by using, initially, an opposite strategy .

That of owning only part of the supply chain.

It is critical to maintain a clear difference between supply chain and distribution channel strategy .

While the supply chain comprises all the planning, manufacturing, and logistics activities that make the product go from the purchase of raw materials to transformation into a final product that might get delivered to the final customer ( Zara business model leverages supply chain management as a distribution strategy ).

In short, where supply chain management concerns itself with integrating supply and demand, a distribution strategy involves itself primarily in the demand chain.

To have a deep understanding of the difference between the supply chain and distribution strategy it is important to consider three main aspects.

Case study: Tesla and Google, from physical to digital integration

Supply chain vs. demand chain

Where a supply chain seeks efficiencies that can, for instance, reduce the cost of purchasing raw materials, integrate several parts of the supply chain, or at creating better logistics.

Distribution channels and strategies look more at creating demand for a product or service by leveraging several strategies.

For instance, having insight into potential customers can allow a company to generate demand via distribution and marketing, just like in the Nike business model .

Internal vs. external

A supply chain relates to all the aspects that begin with sourcing raw materials, production processes, inventory management, and all the other processes that bring a product or service in front of the final customer.

On the other hand, a distribution strategy primarily concerns the demand chain. Therefore, the difference is primarily internal vs. external.

The supply chain affects costs and how to reduce them via efficiencies .

Distribution channels and strategies look at how to grow the demand. Thus, increasing revenues for the business.

This distinction is not absolute. As in some cases when a core competence of a company is its supply chain management, then that also becomes a distribution strategy , just like in the Amazon business model case study .

Via efficient inventory management, Amazon can keep large facilities where most tasks are automated.

This allows Amazon to host third-party inventories  of sellers that are part of the Amazon network.

That in turn, makes Amazon stores more interesting for final customers as they can find more products they need, they can get them faster, and purchase them in a bundle.

In this case, the Amazon supply chain strategy in part crosses with its distribution strategy .

Process-centric vs. customer-centric

Where the supply chain is often process-centric.

In short, it wants to improve efficiency , reduce steps among several parts of the chain, and make the process as smooth as possible. Distribution channels and strategies focus on the customer.

Where is the customer? How do we get more of them? Is that a matter of price? Value or product?

A distribution strategy is obsessed with customers.

Once again, this is a rough distinction as, in some cases, companies have a customer-centric approach at any company level.

That’s what Jeff Bezos means when he says that successful companies need to stay in “ Day One. “

Why you need to understand the demand chain

Demand chain management is a complex endeavor that involves the relations among suppliers and customers and how those interested in growing the demand for the product or service.

At the core, it is about designing a business model that allows the organization to meet customer needs and create desire and demand with an existing supply chain.

Thus, the demand chain is the value chain from your customers’ perspective.

This implies synergies between the supply chain and distribution and marketing to design a business model that delivers the most suited value proposition and generates higher revenues for the business.

It is almost like demand chain management allows supply chain management to look outside the company’s boundaries and understand the market.

Therefore, demand management will primarily understand, generate, and stimulate customer demand and align the supply chain processes with that.

A proper distribution strategy focuses on understanding the supply and value chain to design a sustainable business model , where, for instance:

• The company has to guarantee enough margins and the proper condition to third-parties distributors to allow them to run sustainable operations.
• Align the incentives between the company, the distributors, and consumers.
• Train and educate distributors so that they can offer the best customer experience.
• Create alignment between distributors to avoid fragmented pricing, placement, and promotion strategy .
• Understand what products or services might allow the organization to grow its reach.

B2B, B2C, and distribution channels

A distribution strategy and therefore, the distribution channels involved will change based on the target customer.

Indeed, selling to a business clientele is not the same thing as selling to consumers.

This implies different capabilities and distribution strategies.

For instance, a B2B (business-to-business) distribution strategy might be shorter, as you can directly reach the businesses that will act as intermediaries between you and the final consumer.

Think of the case of a company selling software as a service (so-called SaaS ). If that software is complex and requires a certain degree of expertise, it will be better suited to be sold via other agencies and third parties, which in turn will have access to the consumer business.

This will imply a distribution strategy focused on acquiring the proper sales force to manage the more complex clients.

On the other hand, if a company sells an app for the iPhone which doesn’t require any particular expertise from the final user.

The company will have direct access to its consumers and will use marketing channels which don’t necessarily require a complex salesforce.

This is a critical difference between marketing and sales.

B2B2C distribution strategy

Another form of distribution strategy is a B2B2C , where a brand can leverage existing pipelines to access the market.

In this case, the B2B2C strategy to work has to enable the brand to be known by a larger customer base or audience while it leverages existing players with an established distribution platform.

That is how you can structure your company’s strategy around a B2B2C business model .

Traditional distribution channels vs. digital distribution channels

Over time, to build a sustainable digital strategy, you need to move from third-party to owned distribution, as explained below: 

As consumer behaviors had swiftly changed in the last decades, more and more people purchase via the internet, and they feel more and more comfortable buying expensive items on the web.

For instance, Tesla allows you to order a $65K car directly on its site.

Therefore, digital distribution strategies are critical for any business, also one that has always operated offline.

As explained by Gabriel Weinberg, CEO, and founder of DuckDuckGo , there are at least 19 distribution channels between online and off-line:

• Targeting Blogs
• Unconventional PR
• Search Engine Marketing
• Social and Display Ads
• Offline Ads
• Search Engine Optimization
• Content Marketing
• Email Marketing
• Viral Marketing
• Engineering as Marketing
• Business Development
• Affiliate Programs
• Existing Platforms
• Trade Shows
• Offline Events
• Speaking Engagements
• Community Building

Each of those channels can be a critical ingredient to enhance the revenues of a business.

What matters is to experiment, according to the Bullseye Framework :

Related : Growth Marketing Strategies For Your Online Business

Distribution management: marketing or sales?

Understanding whether distribution management is a matter of sales or marketing is superfluous as it might make us switch the focus from what’s important.

However, it makes sense to draw some lines as this allows proper attribution of responsibility and accountability across the departments of an organization.

Thus, distribution management is typically seen as a marketing function. Yet, once again it depends on the kind of organization you’re running.

Imagine the case of a company that sells to wholesalers or retailers; this means most of the contracts might be managed by salespeople, as they require an understanding of deal terms, relationships, and partnerships in place.

In that case, your salesforce will be able to give you insights that can help you improve the distribution strategy.

In the opposite scenario, where the company sells a product directly to consumers, most of the processes might be automated. Thus, most of the insights will be in the hands of the marketing department.

How do you assess the right mix for your distribution strategy?

When building up a distribution strategy, it’s important to balance speed and control.

And to leverage those channels that can give momentum to the business.

Yet also, in the long-term prioritize those channels that make the company viable and its business model solid.

Key takeaways and why distribution is your most important asset

At any time, businesses can leverage open and closed strategies to enhance and create ecosystems that enable the business to thrive.

In short, companies like Google , Amazon , GitHub , Uber , Airbnb , Twitter , Facebook , LinkedIn and many others that we discussed in this blog while growing managed to create parallel ecosystems of developers, publishers, small businesses, entrepreneurs, and users that are really the base and foundation for those companies business model success.

In short, the turnover those companies make is just the tip of the iceberg of an ecosystem, which is often hard to control.

The Internet, enabled ways for these organizations to involve thousands of publishers, developers, and users, where an organization, generating profits, built a strong distribution platform, thus making it compelling to other key players to participate in the growth of the ecosystem.

At the center of those open, and uncontrollable ecosystems, there is a strong distribution network, controlled by the organization in charge of the platform, that is able to monetize the ecosystem.

Thus, the distribution network is, in many cases, among the most valuable assets a company has in the long run.

Even if that’s expensive to develop, a distribution network is always worth it, because that is how you build a business you can control and a platform where you make the rules of the game.

This is the essence of business platforms !

To finish this up, how can you plan an entry strategy based on the distribution context in which we’re operating? 

Key Insights

• Distribution Channels: A distribution channel is the path a product takes to reach the end customer. It can be direct or indirect and can involve physical or digital channels.
• Distribution Types Database: Various companies have different distribution strategies. Examples include Amazon’s hybrid model, Apple’s hybrid model with carriers, Facebook’s direct digital distribution, Google’s digital vertical integration, Luxottica’s physical vertical integration, and Tesla’s direct physical distribution.
• Importance of Distribution Strategy: Companies often undervalue distribution channels, assuming that a good product will automatically find its way to customers. However, distribution needs to be created through strategic planning and understanding customer needs.
• Types of Distribution Channels: Distribution channels can be categorized as direct or indirect based on the number of steps between the producer and the end consumer. Companies may use a mix of direct and indirect channels to reach their target market.
• Supply Chain vs. Distribution Strategy: While the supply chain focuses on efficiencies in the process of delivering a product, the distribution strategy is customer-centric, focused on creating demand and reaching the target audience.
• B2B, B2C, and Distribution Channels: The distribution strategy may vary depending on the target customer. B2B distribution strategies may involve more intermediaries, while B2C strategies can be more direct.
• Traditional vs. Digital Distribution Channels: With the rise of digitalization, companies need to adapt their distribution strategies to leverage digital channels effectively.
• Distribution Management: Distribution management is usually considered a marketing function, but it can involve sales when dealing with wholesalers or retailers.
• Assessing the Right Mix: Finding the right distribution mix involves balancing speed, control, and the channels that can drive business growth in the long term.
• Distribution as the Most Important Asset: Distribution networks are among the most valuable assets a company can have, as they can create ecosystems that enable business success and control over the platform.

Distribution Channels Types Case Studies

What is distribution

Distribution is a process of enabling a product or service to be easily accessible to the critical customer and consumer who needs that kind of product and service. Usually, distribution channels can be direct or indirect depending on the distribution strategy adopted by an organization to grow its profits.

What is direct distribution?

In a direct distribution model, a company can get its products directly into the hands of consumers without passing through an intermediary. Think of the case of a company like Apple, which sells its iPhones directly through its owned store thus reaching its key customers.

What is indirect distribution?

In an indirect distribution model, a company can get its products into the hands of the final customers, only passing through an intermediary. Think of the case of a company that manufactures a product that then gets sold by a third-party retailer. Thus the company can’t reach its customers directly.

Connected Business Model Types And Frameworks

What’s A Business Model

Business Model Innovation

Level of Digitalization

Digital Business Model

Tech Business Model

Platform Business Model

AI Business Model

Blockchain Business Model

Asymmetric Business Models

Attention Merchant Business Model

Open-Core Business Model

Cloud Business Models

Open Source Business Model

Freemium Business Model

Freeterprise Business Model

Marketplace Business Models

B2B vs B2C Business Model

B2B2C Business Model

D2C Business Model

C2C Business Model

Retail Business Model

Wholesale Business Model

Crowdsourcing Business Model

Franchising Business Model

Brokerage Business Model

Dropshipping Business Model

Main Free Guides:

• Business Models
• Business Strategy
• Digital Business Models
• Distribution Channels
• Marketing Strategy
• Platform Business Models
• Revenue Models
• Tech Business Models
• Blockchain Business Models Framework

More Resources

About The Author

Gennaro Cuofano

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How to Start a Wholesale Distribution Company – Sample Business Plan Template

By: Author Tony Martins Ajaero

Home » Business ideas » Wholesale and Retail Industry

Do you want to start a wholesale distribution company from scratch? Or you need a sample wholesale distribution business plan template? If YES, then i advice you read on. We all are living in unpredictable economic conditions where we all want to secure our selves in all the possible ways. Therefore millions of people are searching convenient but reliable ways to earn more and quickly.

If you are currently searching for business ideas to fly with, wholesale distribution business just might be the perfect business for you. For centuries now, a lot of people have been making money just from selling wholesale goods for profit.

What Exactly is a Wholesale Distribution Business?

A wholesale business is a lucrative enterprise where a wholesaler can earn a considerably large amount of money from single sales. The entry barriers are not so strict that only millionaires can start it . Wholesale distribution business involves acting as an intermediary between a manufacturer of a product and the retailers.

When manufacturers produce goods in large quantities, they need to find a way through which these goods can penetrate the market easily and get to the end users. This is where the wholesaler comes in; the wholesalers buy the goods in bulk from the manufacturer and then break it into smaller pieces so that it can be sold to retailers who would further break it into smaller pieces so that it can be distributed to the consumers.

Although, some manufacturers sell directly to the end users and also, we have wholesalers who also sell directly to end users. A wholesaler can also have a chain of retail distribution outlets of his own so that he can also retail his goods by himself.

For instance, large supermarkets may buy directly from the manufacturers and then sell directly to end users. Wholesale traders can also supply goods to end users that buy in bulk like large institutions, contractors and other commercial users.

The mode of operation of a wholesale distributor involves having an individually operated business that would be involved in buying and selling goods which you have assumed ownership of. Normally, you would have a warehouse where your goods would be stored and eventually distributed to your buyers.

Wholesale just like other trading businesses involves buying and selling goods for profit, the only difference is in the quantity of goods you would be selling and the category of people you would be selling to.

Starting a Wholesale Distribution Company – Sample Business Plan Template

Do you know that wholesale distribution business makes for about 13% of the GDP of the united states of America alone? That shows how lucrative and large wholesale distribution business is. There is also a lot of opportunity to get into this type of business; that is to say that wholesale distribution business is competitive but not stifling.

Before you can get into this business, you have to develop some key skills either by training or reading. First, you have to have strong negotiation skills; you also have to develop your salesmanship skills ( which of course involve a lot of things ), financial skills, business management skills as well as your networking skills.

These skills are very much needed especially since your major goal is to maximize your profit such that you would make as much profit as possible and at the same time offer the best prices and deals to your customers. You would also need good people management skills to be able to effectively manage your customers as well as your employees.

1. Training

It’s true that wholesale distribution business sounds like an easy buying and selling routine but another truth is that even this simple buying and selling routine can be very tricky. Wholesale distributors have a lot of tricks up their sleeves which they use to manage their business efficiently and maximize profit but this may not be visible to an outsider.

For instance; wholesaler distributors know how to handle stocks which are about to expire such that they don’t lose their investments. There are a lot of things that a wholesale distributor would know which an outsider may not know about therefore, there is a need to at least get some form of training and acquire the needed skills to run a wholesale distribution business effectively.

2. Choose a Niche

There are different niches in this business and you have to choose the one you want to deal in; do you want to deal in fast moving consumer goods like food products, groceries and similar goods? Or would you rather go into the construction industry selling building materials and supplies? Or would you rather deal in electronics or computer gadgets?

This page can hardly contain all the various niches that you can deal in hence; you must sit down and find out which products is hot selling. Which products allow more profit and turnover? Which ones are easy to distribute and cheaper to create awareness for? And most importantly, which products are you passionate about ? All of this questions when answered, would give you a clear idea of the most suitable niche for you.

3. Secure an office space and a warehouse

The next step involves securing a suitable space to store your goods and also, a space that could be used as a point of access for your customers. You don’t necessarily need a big office space as a beginner; you could just map out some space in your warehouse to be used as an office space so as to reduce your startup capital.

4. Register with manufacturers

Now, you have to find a way to contact manufacturers of products in your chosen niche. Most manufacturers would require that you register as a wholesale distributor with their company and would also have some specific criteria that must be met before you can be granted distributorship rights with their business. Some of them would require you to show proof of turnover of a specific amount; some of them would also have unique location requirements.

Becoming a wholesale distributor for big companies who already have large number of distributors may be difficult for a beginner but you can solve this challenge by initially registering as a sub-distributor with a bigger wholesaler so that gradually you can move up the ladder to become a major distributor or you could look for new companies that are still searching for wholesalers to distribute products for them.

5. Identify your customers and find a way to reach them

Lastly, you should try to identify the retailers you would be selling your ware to and get them to register with you as their supplier.

If you are entering into a highly competitive niche; it makes sense to employ market penetration strategies like making your goods cheaper than those of other distributors. This is one sure-fire way to get more customers for your business. You should also employ a lot of marketing and advertisement strategies to get more customers for your wholesale distributorship business.

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9+ SAMPLE Distribution Sales Plan in PDF

Distribution Sales Plan

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Simple Distribution Sales Management Plan

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FREE 12+ Distribution Plan Samples in PDF | MS Word

In 2017, after a day of bad critics, Pepsi removed its  marketing campaign . In the ad campaign, popular model Kendall Jenner joined the rally and handed a police officer a bottled soda, attempting to cool down the tension between the protesters and the police. Despite the good intention of  Pepsi , which is to send a message of peace, unity, and understanding, people didn’t take it lightly. According to them, the company underplayed the essence of the protest, which is racism and police violence. As a business owner, you should plan the advertisement, among other parts of the product distribution appropriately and strategically, to ensure that your effort, time, money, and other resources don’t go to waste.

Distribution Plan Samples

What is a distribution plan, what are the different distribution channels that you can use, 1. mass distribution, 2. selective distribution, 3. exclusive distribution, 12+ distribution plan samples in pdf | doc, 1. distribution plan sample, 2. distribution plan template, 3. distribution plan in doc, 4. distribution plan example, 5. sample distribution plan template, 6. basic distribution plan sample, 7. managed distribution plan sample, 8. distribution plan form sample, 9. formal distribution plan template, 10. simple distribution plan example, 11. distribution plan procedure sample, 12. general distribution plan template, 13. distribution plan in doc, how to create a distribution plan, 1. understand your target market, 2. list down the potential market intermediaries, 3. know more about your potential delegates, 4. choose the right distribution channel.

Also known as a marketing plan, a distribution plan is a component of  strategic planning  of a business that consists of the details of how the producers or service providers deliver the goods and services to its customers. This plan may involve market delegates, such as distributors, agents, retailers, and wholesalers.

Depending on the nature of your business and its affecting factors, you can use any of the following distribution channels.

This type of distribution consists of various market intermediaries since it intends to distribute the products to everyone. If your company sells products such as fast-moving consumer goods (FMCG), most likely, this is the best distribution channel that you can use for your business plan.

Unlike mass distribution, selective distribution involves only a few market intermediaries. For example, you are producing a type of coffee beans, which can be quite expensive compared to other variations. You can select specific distributors such as coffee shops for your product distribution instead. Another example is selling a content product that has a more specified target market. You will want to use  content marketing  to distribute your product.

The last but not the least distribution channel that you can use is exclusive distribution. In this distribution, you may involve a single intermediary to distribute your products. For example, you closed a  partnership agreement  with a coffee shop that has multiple branches across the country. In the deal, it says that the coffee shop should include only the products that you produce on the  coffee menu .

For you to know more about the distribution plan, we included the following templates and examples, which you can download in PDF an MS Word format.

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Creating a distribution plan for your new products can be a messy job. That is why we included the following steps, which you can use as a reference in creating a distribution plan along with your  marketing strategy  smoothly.

Before anything else, you should do some research to know your market. Most companies start the process by conducting  market research . This type of study will allow you to understand the preferences of your customers in terms of distributors, customer service, etc.

After the  target market analysis , the next thing that you should do is to identify the potential intermediaries that can help you deliver your products to the consumers. Intermediaries may include retailers, wholesalers, and agents. Keep it in mind that there are two types of intermediaries that you can include in your list, which are the direct and indirect sellers. If the market analysis that you conducted indicates that the best way to deliver your product is to sell them to your customers directly, you will use direct selling as your intermediaries. Otherwise, you will use indirect selling, which may involve multiple intermediaries.

Once you have completed the list, you can start researching each of the potential intermediaries. Start by browsing through the internet to know their potentials. You may also invite them over a cup of coffee to talk about a possible  distribution agreement . The main goal here is to get to know about the potential intermediaries and the potential partnership that you can develop.

Assuming that you know enough about your potential customers and partner intermediaries, choose the distribution channel that will fit the result of the research that you have conducted. To maximize your profit, you can use multiple channels in your  distribution channel strategy .

To gain more profit, many companies get involved with important causes as part of their  marketing plan . That could be a great move, considering that people appreciate accomplice. However, as a business leader, you should also think of the possible result of your company’s action. Use the information that you have gathered from this article and strategically plan the distribution of your products.

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Vending Machine Business Plan PDF Example

• June 17, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful vending machine business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your vending machine business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a vending machine business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the retail industry, this guide, complete with a business plan example, lays the groundwork for turning your vending machine business concept into reality. Let’s dive in!

Our vending machine business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the business’s operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

• Executive Summary :  Offers an overview of your vending machine business’s concept, market analysis , management, and financial strategy.
• Locations: Describes the locations of your vending machines and why these locations are appealing to potential clients.
• Operations: Describes the operational aspects of your business, including maintenance schedules, supply chain management, and customer service protocols.
• Key Stats: Shares industry size, growth trends, and relevant statistics for the vending machine market.
• Key Trends: Highlights recent trends affecting the vending machine sector.
• Key Competitors : Analyzes main competitors nearby and how your business differs from them.
• SWOT : Strengths, weaknesses, opportunities, and threats analysis.
• Marketing Plan : Strategies for attracting and retaining customers.
• Timeline : Key milestones and objectives from start-up through the first year of operation.
• Management: Information on who manages the vending machine business and their roles.
• Financial Plan: Projects the business’s 5-year financial performance, including revenue, profits, and expected expenses.

Vending Machine Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your vending machine business plan, offering a concise overview of your business and its services. It should detail your market positioning, the variety of products offered through the vending machines, their locations, and an outline of day-to-day operations.

This section should also explore how your vending machine business will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your business’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the business’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your business’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Business Overview

For a vending machine business, the Business Overview section can be concisely divided into 2 main slides:

Briefly describe the vending machines’ physical setup, emphasizing their modern design, ease of use, and the convenience they offer to customers. Mention the specific locations of the vending machines, highlighting their accessibility and strategic placement in high-traffic areas such as shopping centers, office buildings, schools, or public transportation hubs. Explain why these locations are advantageous in attracting your target clientele.

Detail the operational aspects of the vending machine business, including inventory management, restocking schedules, and maintenance routines. Explain how you will ensure machines are always stocked with fresh products and are functioning properly. Highlight any technology used for inventory tracking, payment processing, and remote monitoring to enhance efficiency. Additionally, outline your customer service approach, ensuring customers have a seamless experience and can easily report any issues or provide feedback.

Make sure to cover here _ Locations _ Operations

Market Overview

Industry size & growth.

Examine the size of the vending machine industry and its growth potential. Discuss the current market size , revenue generation, and projected growth rates to understand the market’s scope and expansion opportunities.

Key Market Trends

Highlight recent market trends , such as the demand for convenient, 24/7 access to products, healthier snack options, and the use of technology in vending machines (e.g., cashless payments, touchless interfaces). Note the rising interest in eco-friendly products and specialized vending machines catering to specific needs.

Key Competitors

Analyze the competitive landscape, including large-scale operators, niche businesses, and traditional retail options. Emphasize your business’s unique strengths, such as advanced machine technology, diverse product offerings, or strategic machine placements. This section will define the demand for vending machine services, the competitive environment, and your business’s positioning for success.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

First, conduct a SWOT analysis for the vending machine business, highlighting Strengths (such as strategic locations and 24/7 accessibility), Weaknesses (including high initial setup costs and maintenance requirements), Opportunities (for example, increasing demand for healthy and organic products), and Threats (such as economic downturns that may decrease consumer spending on non-essential items).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, promotional discounts, an engaging social media presence, and community involvement.

Finally, create a detailed timeline that outlines critical milestones for the vending machine business’s setup, marketing efforts, customer base growth, and expansion objectives, ensuring the business moves forward with clear direction and purpose.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the vending machine business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the vending machine business toward its financial and operational goals.

For your vending machine business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your vending machine business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your vending machine business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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