How to create a logistics business and distribution company? Here we tell you everything you need to know to be a successful entrepreneur in the business of product distribution.
What is the difference between logistics and distribution?
Before getting into the development of the central theme of this article, it seems pertinent to clarify the previous question. I will do it in a concise and clear way.
Distribution, as we will deal with in this article, refers to the displacement of products as a means of transport, from the manufacturer or wholesaler to a point of sale or to a final customer.
Logistics business is a set of plans or strategies that are carried out in a business or company to meet the objective of receiving raw material (buy) or to deliver finished products ( distribute ). In this article, we focus on the latter, in distribution logistics.
Logistics covers issues such as storage, packaging of products, optimization of delivery time, optimization of human resources for the delivery and distribution of products. As you can see the distribution is a part of the logistics. Continue reading: Food Truck Business Total Structure Game for Your Business Investment
Why set up a logistics business and distribution company?
Today, companies, whether large, medium or small, choose to outsource services or processes; that is to say; they pay other companies to perform certain tasks. One of the most outsourced processes is distribution. Distributing the product may be more expensive than manufacturing it; to understand this, read the cost of sales.
Why do you hire logistics and distribution companies?
The companies are experts in the manufacture of their product and optimize their time around this manufacture; but they recognize that they are neither strong nor experienced nor do they have the time to manage a fleet of trucks, carriers.
There are many examples, Coca-Cola produces soda but delegates to third parties the task of distributing this product. Farmers in your country are experts growing fruits and vegetables but the huge task of bringing these foods from the countryside to the city is carried out by logistics and distribution companies.
Small entrepreneurs also hire distribution businesses :
Small artisans or people who undertake homemade products such as costume jewelry, T-shirts, handbags hire merchandise delivery companies such as DHL. If they did not opt for this service their ability to reach different cities would be nil.
For all the above, it can be concluded that a distribution business is a good idea.
5 Tips on how to create a logistics business and distribution company:
Do not be afraid to start from the bottom:
Many of the large companies that deliver goods in your country started with a single person who provided courier services on a bicycle or a motorcycle. When I researched information to write this article, I came across the story of a large Colombian company called Servientrega, which is now an empire, but the fascinating thing was that it started with a peasant on a bicycle.
To reduce costs use in your vehicles use the cheapest fuel in your country; possibly gas is cheaper than gasoline. If you use motorcycles for the distribution of products, remember that there are specialized motorcycles for these activities that offer you fuel savings and support the excessive use that this type of business requires. How to reduce costs in your distribution business? Lee: How to reduce expenses in entrepreneurship.
Work with entrepreneurs:
Entrepreneurs who are starting have a reduced budget and it is difficult to hire large merchandise delivery companies, for this reason, they can choose you as a distributor if you offer them more competitive prices. For example, you can start a breakfast distributor at home.
Create a web page for your services :
Medium and small companies are constantly searching for logistics and distribution companies that provide excellent services at good prices; A website is a good way to let you know and get good contracts.
It offers complete services or value-added services:
Do not say that you simply distribute. Say that you pick up at the door of the house or the company, you take care of packing or packing, you take care of labeling products; Say you specialize in fragile products handling specialized packaging, offer delivery against the clock, guaranteeing delivery in less than 12 or 24 hours.
Examples of logistics business and distribution companies:
Distributor to neighborhood stores:
The big brands or medium-sized companies in your country need who takes the products to small neighborhood stores. This is a good option to start.
Distributor of refrigerated products:
This is a more specialized logistics and distribution requires a car adapted to refrigerate food while transported. Examples: chickens, cold meats, dairy products, among other products.
Distribution at the point of sale:
Many companies have a central or administrative plant and several points of sale. Here the mission is not to deliver a unitary product to a final customer, but the main objective is to supply, with several product references. All the points of sale of a company. It requires a great logistics of storage, dispatch, and distribution but at the same time, this type of contracts is quite juicy in terms of profit.
Distribution and security company:
It is about setting up a logistics and distribution company where you transport money, jewelry or high-value products, the added logistics is to provide the security service of these values.
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