Sales channels to reach your customers
Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.
If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.
If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.
Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.
Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?
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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.
Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.
The key terms of the supply relationship should be covered in a written contract. Key issues might include:
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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship
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Register a New Business Name
Your next step is to register a new business name. Do some brainstorming and write down different possibilities that might be suitable given your products or services.
If you think you may do business online, check if your business names are available as domain names. Choose a domain name ending with .com or .net. Resist the temptation to choose a domain name ending with any other suffixes. They dont connote business seriousness except for .org and .gov which are usually used by non-profits and governmental organizations. Do not register your domain name before going through the website help page! Once on that page, click on the link which describes your situation most closely.
If you use a business name different from your own name you are using a fictitious name. That name has to be registered in your county so that each name is only used once. Check with your county clerk for a list of fictitious names to make sure your name is not already taken. If it is not taken, you can register it. Depending on the county, you may be able to do this online.
If you are incorporating, you will also need to check on the available names with your states Secretary of State. Some advantages and disadvantages of incorporating are discussed on the Business Organization page.
Do a federal trademark search for your proposed names. This can be done online using the Trademark Electronic Search System. Register your business name as a federal or state trademark if you are going to be doing business state-wide or nationally and will be using your business name to identify your product or service.
Free Business Name Search
Choose a name and register it. Depending on your state, the procedures vary. Heres a free business name search to find available business names in your state.
Licenses and Permits
If you are planning on hiring employees you must obtain a federal employment identification number by filing IRS Form SS-4. This can now be done online.
Obtain a resale permit from your state if you will be selling products. You may also need a state license if you will be working in certain professions.
Get a business license from your municipality. You will also need local permits in certain cases. These can include the following:
a zoning variance, which is a requested deviation from the set of rules a municipality applies to land use known as a zoning ordinance, building code or municipal code, or
a conditional use permit. Conditional zoning allows for increased flexibility and permits municipalities to respond to the unique features of a particular land use application. Uses which might be disallowed under current zoning, such as a school or a community center, can be permitted via conditional use zoning.
Contact your municipality or county for the proper office to apply for local permits.
