How To Start Dealership Business in India in 2024

Are you looking at tapping into India’s all-time high consumer market? Maybe you could start a dealership business and discover this opportunity to grow into a profitable business. For aspiring entrepreneurs, a dealership business could be a rewarding venture where customers and manufacturers connect across various industries. This blog provides a step-by-step guide on how to become a dealer and what could be the best dealership business in India.

Who is a dealer?

When we buy products online or from a supermarket, they come from a chain of suppliers and distributors. So, the products that you see in the supermarkets go through several such suppliers and distributors. Now, these suppliers and distributors and many other people are involved in this supply chain process. These people are dealers and distributors.

Dealers are essentially people who purchase goods or products from manufacturers and then sell them off. They trade a particular product or item and then sell it to customers. Dealers sometimes act as middlemen between distributors and consumers, though they are a bit different from mediators as they also attract consumers. 

What is a dealership business?

To become a dealer, you need to understand that items that are available in the market normally reach its customers through distributors and suppliers. In India, this system is a bit hierarchical, and it has various contact points between manufacturers and customers. The products have to pass through the supply chain where manufacturers pass the products to dealers, and they, in turn send them to the distributors. From here, the products are shipped to retailers and ultimately reach the customers. 

How to select the best dealership opportunity?

You need to research and identify the right industry or sector for a dealership opportunity. It's very vital to also find out about a few things given below as part of your research:

• Assessing market trends
• Customer preferences
• Competition
• Demand for the industry Growth potential
• Profitability index
• Reputation of the brand

Market surveys, analysis of market reports, and consulting industry experts can also help you select the right dealership business ideas and the right industry.

To understand the Legal and Financial aspects of your dealership business idea, you need to comply with several legal and financial processes. A detailed business plan will guide you in exploring the financing options for your sector selection.

What is the importance of Dealership Businesses in India?

There are some importance discussed for the best dealership businesses in India given below:

• Employment Generation

The job opportunities are beyond sales in dealership businesses like service centres, logistics, administration, and other support function
 

• Distribution and Market Reach

Dealers ensure products are readily available, provide localised support, and improve the market reach of manufacturers.
 

• Product and Brand Awareness

Besides creating brand awareness among consumers, the marketing and promotional activities display product features, and benefits, and educate customers about the brand, creating a positive idea.
 

• After-Sales Service and Support

Dealership not only provides after sales-service support and maintenance, they also ensure customer satisfaction and build trust and loyalty of ownership experience.

What are the steps to become a Dealer in India?

You need to go through the following steps to become a dealer in India and establish your dealership business:

Step 1: Identify a Product

As a dealer, the first step is to choose the products you want to sell. You may find out from your research the products trending in your area. The market surveys and research findings will help you know the people around you, their preferences and buying habits. Networking with other dealers might give you more business ideas about products you could focus on.

Step 2: Connect with Suppliers

When you have identified a product for your small business dealership, it's the right time to connect with local suppliers who can procure the products for you. For smaller margins, you can work with a few local suppliers initially and also save on shipping and testing the products.

Step 3: Create a Workplace

For your small dealership business, look for a suitable workplace and set up preferably closer to your locality and also save a place to stock your inventory. A home based workshop is a good idea to save costs in the beginning.

Step 4: Look for a Franchisor

Often starting a dealership business from scratch could be overwhelming, so for a small dealership business, you can always go for a franchise. In this you may have to set up a workshop but run a franchise business of a popular brand.

Step 5: Establish a Credit Policy

Dealership business needs to have a strong credit policy in place. You should check who your buyers are and if they can buy from you. A credit check of the buyers needs to be done definitely and thereafter a credit policy system is to be established. 

Step 6:. Create a strong Network

In your search for how to get a dealership business, one key aspect is to connect well with dealers, distributors and suppliers and establish a strong network as it is one of the most important parts of a growing business.

Step 7: Design a Purchase Policy

In your quest of how to get a dealership business that operates successfully, ensure to always purchase products in bulk and segregate them in separate packs or smaller units. Try to sell them at higher prices for good profitability. 

Step 8: Follow up with your business prospects

Keep contact with your retailers on a frequent basis as that will help you to retain them. This will directly affect your business volumes
 

What are some of the best business dealership ideas?

A clear overview of some dealership business ideas and their popular products and top brands in India are given in the table below:

Conclusion

India’s dealership business offers many across sectors. In your interest in dealership business choices, you have various sectors to choose from. It could be automobiles, food, to healthcare products, and all the industries are unique in their potential and profitability. For financial hitches, you can always apply for loans from financial institutions to fund your dealership business. Say you are fond of cars and want to become a motor vehicle dealer as it is a promising sector; you can acquire a loan for it easily. Do not wait further but leap and get your dealership business to new heights of success!.

FAQs

Q1. What are the types of dealers?

Ans. There are typically two types of dealers: direct and indirect. Direct or authorised dealers source products from the manufacturers and sell them directly to end consumers. Indirect dealers deliver them to retailers, who finally sell them to end consumers.

Q2. Who gets paid the most in a dealership?

Ans. The payment model in a dealership depends on the industry, market demand, location, brand, etc. Car dealerships are usually highly profitable due to consistent vehicle demand.

Q3. Is there a difference between a dealership and a distributorship?

Ans. Yes, Distributors sell products with exclusive rights within a particular territory or region. Dealers purchase products from distributors and sell them to end customers.

Q4. What paperwork is required to open a dealership business?

Ans. In addition to the primary documents, you need to produce your educational proof, driving licence, bank details, business licence, and certificates.