How to Start a Business as a Machine Tool Distributor

The Bureau of Labor Statistics approximates that there are at least 421,500 people hired as machinists in the U.S. However, this number dropped by 5% in 2018, but the industry still has a lot of benefits to offer.

machine-tools-businessWith improved machinery becoming a scramble in order to improve efficiency and quality, there’s a loophole to be exploited as a machine tool distributor. Here’s how to kick off this business.


Draft a Business Plan

Every serious business must have a solid business plan and as a machine tool distributor, you must state your shipping methods, cash flow, dealer relationships and other crucial aspects of the business. This will give your financier a clear picture of how your business will operate.

Don’t forget to include contingency and future expansion plans. In addition, you must specify the type of entity your business will be. Is it an LLC, sole proprietorship or otherwise? For more advice, you can contact your lawyer and accountant.

Make Your Business Known

This includes registering your company with the government to receive an Employer Identification Number with the IRS. This number will be used to employ staff and also to open a business credit and checking account.

Each state has a secretary of the state office which you can visit or contact to determine the type of sales tax license you need as well as other additional permits and licenses.

Gain Machine Tool Knowledge

This you can do by attending various machine tool conventions. What’s more, apart from gaining machine tool knowledge, you’ll also bag valuable potential contacts. One of the most common conventions includes the Machine Tool Experience in Las Vegas.

This convention boasts of over 10,000 attendees with at least 200 product stands.

Acquire a Warehouse

As a machine tool distributor, you’ll need a warehouse where you can store your machines. Besides, if you’ll be dealing with large machines such as milling machines or a commercial lathe, it’ll be in your best interest to get a warehouse with a loading bay.

Acquire a Distributor Relationship

In order to become a distributor, you must have solid contacts with a manufacturer. Furthermore, you must fill a distributorship relationship application. In this application, you’ll fill your financial credentials, experience and sipping facilities.

machine-tool-business-2Keep in mind that distributorships cover certain territories, therefore, your application will be approved based on territory availability.

Train Your Staff

You cannot sell what you do not know, especially machines. You must know how to operate the machine in order to become a reliable distributor. The same goes for your staff. Train your staff and by sending them to various conventions as well as training videos.

Get a Shipping Facility

There’s no doubt you’ll get clients from far locations and as an added service to the customer, you must have a shipping facility in order to deliver the machines on time. You can partner with a logistics company which can transport both the technicians for machine installation and the machine itself.

Starting a business is not rosy. You’re bound to make mistakes along the way, especially if you’re dealing with delicate items such as machines. However, with the tips outlined in this article, you have a head start, thus reducing your chances of encountering difficulties.

Erin Emanuel