How to Become a Bike Part Distributor

Bike parts will be in higher demand as cycling popularity continues to increase.

The National Bicycle Dealer's Association (NBDA) states that the bicycle industry has been declining because of the high expectations of the current customers and a low profit margin relative to the high start-up capital. As of 2008, the industry is losing 1,000 bicycle retailers every other year. You may find it difficult to establish yourself in the bicycle industry without proper planning. However, as of 2008, cycling ranked fifth for the most popular outdoor recreational activities, hinting at a good market that you can reach with a solid marketing plan.

Things You'll Need

• Business plan
• Legal structure
• Employer Identification Number
• Storage
• Business licenses and permits
• Trucks and drivers

Instructions

1. Devise a business plan with mission and vision statements, start-up and operating expenses, projected revenues for a few years, funding sources, marketing plan, competitor analysis and pricing strategy. Identify competitors in your locality and assess your funding requirements.

2. Choose a business legal structure. It may be a sole proprietorship, partnership, corporation or a limited liability company. Make the right decision now since a change in the legal structure after the establishment of the business is difficult and expensive.

3. Obtain a unique domain name for your business and register it with your secretary of state.

4. Obtain an Employer Identification Number (EIN), otherwise referred to as a Federal Tax Identification Number from the IRS website, IRS.gov. This number helps to identify your business as a separate entity for tax purposes.

5. Choose a suitable location for storing the bike parts that you will purchase to distribute from the manufacturer. Consider factors such as proximity to factory and distribution outlets, along with adequate storage space for all inventory.

6. Obtain the necessary business licenses and permits from your federal, state, city and county levels. Check with each separately and apply. You will need a state resale permit.

7. Choose the supplier after a supplier evaluation based on factors such as quality, brand, timeliness, customer preference and reliability. You can start with a single brand initially and extend your services to other brands. Sign agreements with the chosen manufacturers, establishing distribution rights and resell rights.

8. Purchase the bike parts from the chosen suppliers. Add tag numbers to each part for easier identification. Create a budget and stick to it. Separate the items purchased for distribution.

9. Purchase vehicles such as trucks to distribute the parts to their corresponding location. Hire drivers who have a good driving history and a valid driving license.

10. Obtain the business insurance with the necessary coverage. Make sure that it covers your store as a whole, along with the bike parts and trucks.

11. Market your business after setting a price for the parts. Include a reasonable profit margin based on your industry. Place ads in the phone book, newspapers, TV and radio stations.

Tips & Warnings

• Offer free transport until you build a good client base.

References

• Bicycle Parts Wholesaler: How to Open a Bicycle Store
• Bicycle Parts Wholesaler: What's a Bicycle Parts Wholesaler
• The Complete Guide To the Home-Operated Bicycle Business