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    2 Replies Latest reply on Sep 21, 2011 1:04 PM by jamssmith1

    Starting a wood flooring distribution business

    arazavi Newbie
      I am in the start-up phase of getting a wood flooring distribution business that deals directly with a manufacturer overseas. The manufactuer has a quality product that is being sold in the US through various distribuitors whom the manufacturer has accounts with. We will have a exclusive contract in our region so there will be no competition with the manufacturers current client base.

      The main concern is the sales process and financing. My company will be selling the product to national and regional floor covering distribuitors through catalogs and sales calls. Is this the best way to go about sales with distribuitors who are not local? Are there better methods to selling to large, established distribuitors? I am not 100% informed on the needs of distribuitors, which influence their purchasing behavior, but should get a better idea in the next week or so.

      As far as financing goes, we are looking to start with a very low overhead, almost a micro business, spending money only on necessities such as a web presence, llc fees, marketing material, and anything else that is 100% necessary. Cash will be used for those needs. The finacing will be needed once a purchase order is placed by a customer, as we would then need short-term credit from our manufacturer to fulfill the order, ship it, and deliver it to the customers. Once the customer has paid the invoice, we would reimburse the manufacturers wholesale cost. Estimated time frame 30-60 days. Anyone have experience with purchase order finacing with a supplier / manufacturer? Any other methods to finance this short-term need through the manufacturer?

      If that short-term credit is not granted (slim possibility based) then we would need a revoling line of credit to use to purchase inventory and sell it. A SBA Express loan is being considred for this as a backup as well as a 7(a), but I am not 100% certain if the 7(a) has lines of credit available or just fixed term loans.

      Any advice, insight, or possible problems with the proposed strategies would be appreciated.

      Thank you,