The Inherent Risks of the Distribution Industry

risks in distribution business

The distribution industry is a key cog in the wheel of the global economy. Distributors are responsible for the receipt, storage, sales and delivery of traded goods from around the world. Nearly every item sold in stores has passed through a distribution company prior to landing on the shelves. There are endless opportunities in the industry, but it is important to understand the inherent risks involved before deciding to open up a business.

Assessing the Risks

As in any venture, weighing the possibilities against the vulnerabilities is crucial to success. The risks in distribution business can vary widely, depending on the niche you choose. However, there are a few that are common across a range of service sectors. Inherent factors that lead to disruptions and, potentially, devastating loss include:

  • Accidents in the course of distribution and delivery
  • Delays or non-delivery of goods from suppliers due to accidents in route
  • Warehouse power failures, especially when dealing with perishable goods
  • Product theft

Protecting Your Business

Understanding the vulnerabilities of the business before you begin operations will help you safeguard your company, your employees and your customers from the impacts of interruptions and loss from risks that become realized. Armed with information, you can take the right steps to protect your business through procedural safeguards and with specialized insurance. Taking the right steps early in your endeavor will set you up for success over the long haul.

This post was written by , posted on May 21, 2020 Thursday at 10:00 am