Starting Electrical and Home Appliances store in Tier 3 city.

[Guddu_Bhayya2022]

Hi,

Me and my friend plans to start an Electrical and Home Appliances store in a tier 3 city or would rather call a town. Now my friend already runs a grocery store and we wish to expand it and sell electrical and Home Appliances as the store has ample space.

Now me or my friend don't have any experience in it. We can't afford to pay lakhs of rupees for brand dealership but rather buy stuff from tier 1 city at discount and sell it in our town with a margin. So my queries are...

1. Can we sell goods without dealership? We intend to sell goods from multiple brands.

2. Can we offer manufacturer warranty and will the brand honour such warranty on the bill issued by us? We will be registering for GST.

3. How much does it cost to take brand dealership? Do I need dealership for all brands I sell?

 

[PRASHANTTHAKUR]

Congratulations on your new venture

1. Yes, you can sell goods without a dealership, but ensure you're not infringing on any brand's exclusive distribution agreements. You can purchase products from authorized distributors or wholesalers in tier 1 cities and resell them in your town. However, be aware that some brands might have specific requirements or restrictions.

2. Typically, manufacturers honor warranties only on products sold through authorized channels. Since you won't be an authorized dealer, warranty claims might be challenging. You may need to absorb warranty costs or negotiate with suppliers to facilitate warranty services. Registering for GST will help you maintain a legitimate business record.

3. The cost of taking a brand dealership varies widely depending on factors like brand reputation, product category, and market conditions. It can range from a few thousand rupees to lakhs or even crores. You don't necessarily need a dealership for all brands, but having one can offer benefits like direct supply, warranty support, and marketing assistance.
Good luck with your venture!

 

[RAMESH BABU N]

My suggestion :

Instead of asking such questions here, where you get only theory based suggestion or guidance, it would be better if you go to that town, spend 10-15 days, talk to the field-sales-guys n their managers of those brands which are in need of that town. There is no point in being an expert in GE/Bosch/Samsung if there is no market in that small town for those brands.

So, focus on that town, purchase patterns, preferances and spend time with servicing guys in that town. Speak with the customers of your pal's shop.

Do you also wish sell spares/parts/ accessories ? If so, also spend some time studying that aspect too.

The more time/effort you spend in that town, the more beneficial for your proposed venture. Because, you say you do not have any experience.

Start on a small scale n scale up later. Factor no-profit time-space in your calculations.

All the best.

 

[Chacha_vidhayak]

Hi,

Me and my friend plans to start an Electrical and Home Appliances store in a tier 3 city or would rather call a town. Now my friend already runs a grocery store and we wish to expand it and sell electrical and Home Appliances as the store has ample space.

Now me or my friend don't have any experience in it. We can't afford to pay lakhs of rupees for brand dealership but rather buy stuff from tier 1 city at discount and sell it in our town with a margin. So my queries are...

1. Can we sell goods without dealership? We intend to sell goods from multiple brands.

2. Can we offer manufacturer warranty and will the brand honour such warranty on the bill issued by us? We will be registering for GST.

3. How much does it cost to take brand dealership? Do I need dealership for all brands I sell?

May i ask which town ?

 

[Guddu_Bhayya2022]

My suggestion :

Instead of asking such questions here, where you get only theory based suggestion or guidance, it would be better if you go to that town, spend 10-15 days, talk to the field-sales-guys n their managers of those brands which are in need of that town. There is no point in being an expert in GE/Bosch/Samsung if there is no market in that small town for those brands.

So, focus on that town, purchase patterns, preferances and spend time with servicing guys in that town. Speak with the customers of your pal's shop.

Do you also wish sell spares/parts/ accessories ? If so, also spend some time studying that aspect too.

The more time/effort you spend in that town, the more beneficial for your proposed venture. Because, you say you do not have any experience.

Start on a small scale n scale up later. Factor no-profit time-space in your calculations.

All the best.

Thank you for your inputs. Will follow your advice.

 

[Guddu_Bhayya2022]

May i ask which town ?

Its a town in Telangana, South India.

 

[Guddu_Bhayya2022]

Congratulations on your new venture

1. Yes, you can sell goods without a dealership, but ensure you're not infringing on any brand's exclusive distribution agreements. You can purchase products from authorized distributors or wholesalers in tier 1 cities and resell them in your town. However, be aware that some brands might have specific requirements or restrictions.

2. Typically, manufacturers honor warranties only on products sold through authorized channels. Since you won't be an authorized dealer, warranty claims might be challenging. You may need to absorb warranty costs or negotiate with suppliers to facilitate warranty services. Registering for GST will help you maintain a legitimate business record.

3. The cost of taking a brand dealership varies widely depending on factors like brand reputation, product category, and market conditions. It can range from a few thousand rupees to lakhs or even crores. You don't necessarily need a dealership for all brands, but having one can offer benefits like direct supply, warranty support, and marketing assistance.
Good luck with your venture!

Thanks for the detailed reply and answering so precisely.

So... Can I take a dealership of say "Crompton" and can deal with other products as well without an issue. I have seen stores who exhibit their dealership licence with one brand in their store but also sell other brands as well.

 

[PRASHANTTHAKUR]

Thanks for the detailed reply and answering so precisely.

So... Can I take a dealership of say "Crompton" and can deal with other products as well without an issue. I have seen stores who exhibit their dealership licence with one brand in their store but also sell other brands as well.

You're welcome

Yes, that's a common practice. Taking a dealership with one brand, like Crompton, doesn't restrict you from selling other brands' products. This is known as a "multi-brand" or "multi-product" store.

By taking a dealership with Crompton, you'll likely receive benefits like Direct supply from Crompton, Warranty support, Training and product knowledge, branding and marketing assistance

Meanwhile, you can still source products from other brands through distributors or direct purchases and sell them in your store.

The stores you've seen exhibiting a dealership license with one brand while selling other brands are likely doing the same thing.
Just remember to check the dealership agreement with Crompton for any restrictions.