Starting Your Business
There are three main ways to become an authorized distributor.

Buy an existing business. Do thorough research before buying a company. For example, why does management want to sell? You do not want to buy a company that is selling because it is failing. The big advantage of buying an existing distributor is that you can inherit its current customer base. Furthermore, it helps to get new authorized distribution opportunities. For instance, one of hardscape lighting manufacturer Integral Lighting’s requirements when looking for a new distributor is that it is an established business with a history of good customer service.
Start from scratch. You do not have to rely on an existing owner’s reputation. However, it may take time to build up your customer base.
Buy into an existing opportunity. You need to check into the company you are becoming a partner with, as you will be tying your reputation onto its already established reputation, good or bad. However, the right company can mean that you will have a lot of support, training and an already established customer base.
Success Requires Planning
Most companies offering authorized distributor opportunities will require a written business plan as part of the approval process. For example, Kryton, a manufacturer of concrete waterproofing, requires distributors to support their business case as part of the application process. To write a good plan in general, you need it to be the following five things:

Functional. Ask yourself if it is something that you will actually use to guide your business.
Measurable. Measurable goals such as revenue and cash flow, will help you to keep track of your progress.
Flexible. It needs to be up to date. Consider setting up annual and quarterly meetings to determine how your company is performing in comparison to the goals you have set. If your goals have changed due to the business climate, update them in your business plan.
Reasonable. It is important to put a budget in your business plan. Take into account all of your operating expenses and predicted revenue. Be reasonable when doing so, as it can be difficult to get a large sum of money in a short period of time, especially if you didn’t anticipate it.
Anticipatory. You need to perform a thorough research of your target market and be ready to answer any questions or foresee potential difficulties.
Finding a Location
Although you can start from home, to be truly successful, you will need to buy or rent a warehouse to stock your products. Consider warehouses in areas that are not too expensive, away from shopping areas and close to your desired customer base. Being close to customers is extremely important. Manufacturers, such as Katun, a manufacturer of printer and copier toners, requires that its distributors provide efficient local delivery.

Authorizing Your Business
One of the most important licenses you will need to get is a wholesale license. This will allow you to act as a middleman and buy products wholesale from manufacturers without paying sales tax. Also, you will need to contact the manufacturers and work out deals to distribute their products. Many times this begins with an filling out an online application form on their website or contacting their local sales office. For example, for Katun, you need to select the territory that you are looking to work in and contact its local sales office. From there, a representative will be able to work with you and see if the company is already sufficiently served in that region, so as to not be competing with other authorized distributors.

Getting Enough Inventory
How much inventory you end up holding depends on the type of industry. On the one hand, if you do not have enough inventory when a customer calls, that person will go somewhere else. On the other hand, if you buy too much inventory, you run the risk of not selling it quickly enough and having a lot of capital tied up. In many cases, manufacturers will require minimum quantities ordered to become a distributor. For example, Enecon, a leader in repair technologies for oil, water and power applications, requires an initial minimum inventory investment of $85,000 to $100,000.