How To Start Dealership Businesses in India [2022]

. 7 min read
How To Start Dealership Businesses in India [2022]

Starting a dealership business can indeed be profitable. It is also one of the easiest businesses to start, as it involves less capital and overhead expenses. However, note that you can become successful only if you get all the aspects right, including planning and strategy, execution, demand, and capital.

If you want to start a dealership business in India in 2022, you have many options. But you must know before you can begin what a dealership business entails.

What is a Dealership Business?

We all buy products from our local supermarket. These days, we even purchase them online. Products put up at your local supermarkets, or online stores come from a chain of suppliers and distributors. So, the items and products that you see at your local supermarket must go through a series of such suppliers and distributors before they get there.

These suppliers and distributors are known as a supply chain. There are various people involved in this supply chain process, including dealers and distributors.

Both dealers and distributors form an integral part of the supply chain, although there are several differences.

Dealers are people who purchase goods or products from manufacturers and sell them off. In layman’s terms, a dealer is someone who trades a particular product or item. Sometimes, dealers also act as a middleman between the distributor and consumer, although they are different because they can attract consumers.

A dealer can sell any product, including those of the competitors or rivals. That is, a dealer is authorised to sell any brand of their choice.

How to Become a Dealer in India?

Several steps go into starting a successful dealership business in India. Ideally, you should follow these eight steps to create a dealership business.

1. Choose a Product

The first step towards becoming a dealer is to choose the products you want to sell. For this, you must know what products are trending within your neighbourhood. Take some time to get to know your area, its people, their preferences, and buying habits. You could also talk to other local dealers to get an idea about what products you can sell.

2. Rope in Suppliers

Once you have decided on the products that you want to sell, it’s time to connect with the local suppliers who can get them for you. It would be better to contact only a few local suppliers that you can find nearby and keep the margins at bay to save on shipping and testing the products, especially if you are a newbie.

3. Establish a Workplace

The next step towards starting a successful dealership business is to set up a shop, preferably within your neighbourhood. When setting up your dealership establishment, don’t forget to save a place where you can stock your inventory. In the initial stages, you can also do it from home and save money.

4. Find a Franchisor

If starting a dealership business from scratch sounds too hard, you can always own a franchise, in which case, you would not have to establish a shop but rather own and run a franchisee of a big brand.

a man holds a pen and working at credit and loan agreement

5. Don’t Forget to Set Up a Credit Policy

One of the nuances of starting a dealership business is to have a robust credit policy. Check for who your buyers are and whether they can buy from you. Also, make sure that you check their credits and accordingly set up your credit policy system.

6. Build a Strong Network

If you want to know how to start a dealership business, one of the best ways would be to connect with other dealers, distributors, and suppliers and form a strong network. Note that networking is one of the most crucial aspects of the dealership business.

7. Have a Purchase Policy

The best way to run a dealership business would be to buy products in bulk, repack them into smaller units, and sell them off at higher prices. That way, you can make good profits.

8. Keep an Eye on How Your Business is Doing

Stay in touch with your retailers as much as possible. It will not only help you retain them but also increase business volumes.

Best Dealership Business Ideas

There are more than 40 small business ideas that you can try. However, you should know that these six areas are the most profitable when it comes to dealerships.

1. Automobile

The automobile sector thrives as most people tend to use their cars or vehicles for a longer time. However, the question begs, how to start a dealership business in the automobile niche? You can always begin by opening a small retail store that sells automobile parts and accessories in addition to offering services like car washing. There are many famous and profitable automobile dealers in the country, including Bajaj, Hero Moto Corporation, MRF Tyres, Maruti Suzuki, BSA Cycles, and more. So, there is no doubt that a dealership business in the automobile niche is profitable.

2. Arts and Crafts

If you are good at making items that involve arts and crafts, you can always start an arts and crafts dealership business. There are many opportunities here, including those in costume and jewellery making, toy making, candle making, and clothing.

3. Computer Hardware and Accessories

If you are a computer geek, then selling computer hardware accessories would be the best business to start in the dealership segment. A dealership business in computer hardware accessories is highly competitive and profitable. As a computer hardware and accessories dealer, you can sell a wide range of devices, including memory cards and USB flash drives, external storage devices, monitors, cables, input devices, and other such accessories.

4. Furniture and Interior

Selling furniture and interior décor items can be one of the best dealership business ideas that you can turn into a substantial profit-making gig. The reason for this is that you get the best profit margins here. As a furniture dealer, you can sell different items, such as those made of wood, bamboo, wrought iron, and cane furniture. You can also sell various interior decoration items as part of your furniture and interior dealership business.

5. Sports Items

As a sports item dealer, you can sell a host of products, including equipment for outdoor and indoor games, entertainment and fishing products, and even musical instruments. However, make sure that you start with only a few categories if you are a beginner.

6. Plastic

You can also sell plastic items as part of your dealership venture. Today, plastic and other such items made from polymer are the primary sources of several household items. They also find uses in the packaging industry. So, a dealership business in plastic can indeed be a lucrative and profitable idea.

Colourful Plastic Products in white background

Final Thoughts

For all those entrepreneurs looking to start a dealership business, you can always try your hand at these popular and new business ideas. It is no doubt one of the best businesses to start, especially in India. Not only can you make profits, but also expand the scale of business as it thrives.

Also read:

1) Best business in India
2) Best business in Delhi
3) Best business in Jaipur
4) Best Dealership Businesses In India
5) Best Manufacturing Businesses In India

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Q. What dealership businesses are the most profitable in India?

Ans. Owning a franchise of some of the most popular outlets, such as Subway, Jawed Habib and Beauty Limited, DTDC Cargo and Courier Limited, Fab India, and more, can be one of the most profitable dealership business ideas in India.

Q. Which is the cheapest dealership business that you can start in India?

Ans. There are many low-cost, low-investment dealership businesses that you can start in India. For instance, you can own a franchise of Giani’s, Thano’s Natural Ice Cream, Fenusta Global, Bright Kids, Rocking Deals, and more.

Q. How to differentiate between whether the franchisor or franchisee manages an area?

Ans. It is hard to tell whether the manager of a popular outlet is a franchisor or franchisee, as it caters to a large customer base, some of whom may even be residing outside those areas.

Q. Who are term sales agents, and what do they do?

Ans. Term sales agents are representatives that companies appoint to sell their products. The target customers can range from wholesalers and retailers to individuals. They typically get a commission for every product or item they manage to sell.

Q. How many companies can I collaborate with as part of my dealership business?

Ans. How many companies you can tie up with depends on the products you want to sell and the location of your dealership outlet.

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