hello, this is my first time on this forum. I would like to ask some questions regarding distribution.
let's say i want to start a distribution business in my country (USA). i would like to distribute products from this japanese company to retail stores located in USA, but there is already a distributor doing this at the moment and they are well established. is it possible for me to ask this japanese company if i can distribute their products? or does that other distributor have special and sole rights to distribute in the USA?
this also leads up to my next question. if i wanted to start an online retail store, do i have to get my products from that well established distributor (mentioned above)? or can i obtain the products from the japanese manufacture/distributor (or is this illegal?)? i kind of want to skip the middle man.
going from manufacture -> distributor -> retail causes the product to have a 200-300% markup in price. in japan, the product sells for 60 US dollars in retail stores so those retail stores probably bought those products for 20-30 US dollars from japanese distributors/manufactures. in USA however, the same product sells for 120-150 US dollars (unknown on how much the USA distributors sell to retailers for). i do understand that there is cost of shipping and customs fee and etc etc, but it just seems ugly to have such a high markup.
just contemplating the idea of starting a business. thank you in advance. haha i guess i should've majored in business instead of human bio.
I would add to find a good accountant too and perhaps incorporate yourself to protect yourself from lawsuits.
Personally, I have dealt with Computer distribution companies and realizing they mark up the prices from the manufacturer I decided to call some of the manufacturers directly. Generally, there is a minimum per order since you'd be shipping the items overseas and you'd have to look into the insurance of the items and so forth. Most manufacturers deal with large distributors because they have less clients to deal with and, thus, it saves them time and administrative costs. I called one manufacturer in Taiwan I think it was and a minimum order of around $100,000 or so was required. So if you're a small business then deal with the distributors first and if they can drop ship that would be even better. Start small and work your way up especially if you are a small business owner. This way can you learn and the mistakes that you do make will be small and the consequences of losing money is mitigated. Do as much research as you can, create a marketing plan and so forth. Really think about it. Take some courses on business plan development. The business plan is just a roadmap and a guide. I have found though that the real world of business can be quite different than what your business plan looks like and so be aware. Just some things to think about.
alucard13mm,
Most of your questions would be answered by speaking with the Japanese Manufacture. They may have other contracts that make distributer have sole rights, but that is something only they would be able to answer for you.
In regards to if it is legal to have something manufactured in Japan and then sold in the US, yes it is. You can cut out the middle man, but you might want to be informed about importing goods.
For starting and registering your business, you can check out 10 Steps to Starting a Business.
Another important thing to cover is all the legalities with contracts and agreements if you start basing your business on cutting out the middle man. We have a business article on How to Find a Lawyer.
Good Luck,
Jim
roccobeatrice | Creator | 8/16/2010 - 6:05 pm
JimD | Former Moderator | 8/16/2010 - 10:25 am
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