How does a dealer differ from a distributor? Distributors are official representatives of the supplier company

Currently, many of the largest corporations, for the convenience of organizing sales and optimizing the delivery of their own products to end consumers, organize sales networks that include several additional links in addition to the standard “seller-buyer”. In particular, distributors are direct representatives of the company who make shipments directly from the supplier’s warehouses.

If we consider the entire chain through which the movement of goods produced by large holdings occurs, we can identify several of its main participants. These include, in addition to the enterprise that produces the product, dealers and distributors. This provides a high degree of convenience for customers and allows you to maximize the geography of the company’s clients. There are a few key differences between the two dealerships here. The dealer, in particular, deals with the product directly to its consumer. Products are supplied to him by an official distributor, who, in turn, purchases them directly from the manufacturing company. Thus, the dealer has the opportunity to communicate directly with the end buyer, carrying out both wholesale and retail trade. Its capabilities allow it to study the consumer market in detail, identifying both positive and negative opinions about the proposed product. And distributors are companies engaged exclusively in wholesale sales, shipping products only to dealers. The task of a representative with this status is to globally expand the sales geography of the manufacturing company and search for organizations to which finished products can be shipped in bulk.

In order to become a distributor, you will need to enter into a contract directly with the manufacturer of the product. Typically, this type of agreement contains certain conditions, the fulfillment of which allows you to obtain the coveted status from the manufacturer. These usually include such things as the minimum volume that the representative will have to ship monthly, as well as payment options for the goods received. Often the manufacturer provides a deferment on payments, but it can be minimal and not exceed 3-5 days. In addition, a company that produces its own products officially gives its representative the right to use the registered brand of the product, ready-made and any other privileges that ensure the distribution of the product in various regions.

Thus, distributors are official representatives of the supplier company who have the ability to make shipments directly from the manufacturer and have certain privileges to use the company’s goodwill in relation to the goods sold. Its main task is to expand the geography of products shipped under a distribution agreement and search for new dealers and sales points.

Currently, the Russian language contains many borrowed expressions, in particular from English. This trend especially concerns the sphere of economics and business: various phenomena come to us from America and Europe, so it is not surprising that a recently emerged concept becomes sensational and gains popularity over the years. This term is “distributor”. Previously, a person with such a profession or a company with such a line of activity was equal to something unearthly, but nowadays anyone who wishes can become one.

Distributor is an intermediate link between manufacturer and consumer

Who is a distributor and what does he do?

A distributor is an individual entrepreneur or legal entity engaged in large purchases of goods from the manufacturer for the purpose of further sale (through agents and other intermediaries or independently). The goal of doing business is to provide the world with information about your manufacturing partner, presenting him in a favorable light, and then offer to get acquainted with his products through seminars, master classes, exhibitions, and presentations.

It would seem that the profession is simple, but in it, like in any other, there are many pitfalls that are important to take into account. Firstly, this is the need to have experience working with people, communication skills and in some cases NLP (not our option). In fact, distribution is very interesting because it has a direct connection with the salesperson's ability to find common language, constantly get to know someone and have a wide range of responsibilities.

Main functions of a distributor

The duties of a representative of this profession begin from the moment of purchasing goods from the manufacturer (most often this is a foreign person). The fact is that concluding an agreement with foreign companies is of sufficient interest for the new consumer market. Previously, many had no idea who a distributor was or what he did, but now this area is gaining popularity.

Scheme of work

The principle of operation is quite simple:

1. Purchasing a large batch of goods from the manufacturer at a reduced price.
2. Sales of products through independent efforts, as well as networks of dealers, agents and other companies.
3. Opening companies in other countries, if necessary and financially possible.

Historical facts

In the 1990s, the then unknown Invite powder began to be produced, and the manufacturing company managed to bring the product to consumers only due to the fact that it knew about distribution activities. This scheme allowed the company to distribute its products throughout the world and became the pioneer of the efficiency of the distributor scheme.

Read also: Business process models

If a foreign company has an official distributor in Russia, this indicates an increase in its sales volume in the near future, since the Russian consumer market is huge. There are successful examples from the owners of large companies and corporations, as well as cosmetic companies.

Documentation for distributor work

It is necessary to conclude an official contract with the manufacturer of the product, which clearly stipulates and provides for all points and rules of sales. Distribution activity is a wonderful opportunity to establish relationships with large foreign companies, which has a good effect not only on the well-being of the participant himself and his customers, but also on the economy of the state as a whole.

Note: An importing company engaged in independent sales of products in other countries is called a general distributor. Exclusive distributor - a person participating in a scheme in which the supplier cannot sell the product to third parties, and the distributor buys the product exclusively from this supplier.

All these aspects are stipulated in the contract drawn up - the distribution agreement. After passing the official procedures, the distributor receives from the general director of the supplier a certificate of the appropriate type, which indicates the type of intermediary organization.

How to obtain distributor status

Many compatriots are concerned about the question: how to become a distributor. This procedure is carried out in just a few steps, during which the person involved in the implementation receives a new status.

1. Selecting a manufacturing company. At this stage, you need to prepare a commercial proposal, which includes detailed information about the company, area of ​​work, mobility, etc. An overview of the product market, estimated product sales volumes, and competitor analysis is provided.
2. Organization of contact, for example, at one of the company exhibitions. Once communication has been established, it is necessary to begin correspondence with a proposal for negotiations. At this stage, an agreement is concluded and all formalities are settled.

Once you understand these instructions, you will be able to achieve your goal in a short time.

Upon completion of all formal procedures, the distributor receives a certificate

Distribution scheme options:

1. Purchasing from the manufacturer at a discount and providing the latter with promotional materials free of charge.
2. Creation of an enterprise with equity participation of several persons. Both of these options are popular today.

Distribution advantages:

1. Possibility of receiving an unlimited level of income. It all depends on how well the supply chain and sales system are established.
2. Having a lot of free time. This is most important for women, because in this way they will be able to pay more attention to their family.
3. Remote employment. There is an opinion that a distributor is a person who takes a large checkered bag and goes to visit all his friends, trying to sell a product. In fact, due to the development of modern technology, many workers conduct their activities on the Internet.

Despite the fairly high level of economic literacy of the population of our country, few will be able to tell what the difference is between a dealer and a distributor, or give these concepts a precise definition. Among the huge number of different terms that have firmly taken their place in our lexicon over the past decade, these two are the leaders in frequency of use.

What is the difference between a dealer and a distributor

But only people with an economic education or representatives of professions related to wholesale trade can explain their meaning and the differences between them in an accessible language. This article will help some readers bridge the gap in education, and will also provide an opportunity to understand all the nuances of the concepts: dealer and distributor.

Even if you are not involved in trade and business, this knowledge will be useful in everyday life, for example, to understand the essence of what is written on the packaging of any product where these terms are used quite often.

In order to understand the difference between a dealer and a distributor, it is necessary, first of all, to define these terms and understand where and when they are used. Only after careful analysis can the main differences between them be identified. If we take a literal translation from English, then “distributor” is a distributor, distributing to many. But what is its activity related to in modern market conditions, and what are the main functions performed by this subject of trade relations? First of all, a distributor is a legal entity or individual that sells products purchased directly from manufacturers. That is, there are no other intermediaries between the manufacturer and distributors.

The distributor purchases goods in large wholesale quantities and sells them through its distribution channels, mainly using an established network of intermediaries and almost never working with the end consumer of these products. The distributor, if you look at it, is not limited in any way in his actions, he works on his own behalf, basically, single-handedly determines the pricing policy, and his relationship with the manufacturer is built on the basis of a bilateral agreement regulating all issues of their cooperation.

The main point of this contract is to determine the territory in which the distributor operates. In fact, the company receives a monopoly right to sell goods in a specific region. The distributor’s freedom of action also has a downside: he himself is responsible to the buyer for the quality of the products sold, but on the other hand, having a quality certificate from the manufacturer in hand, you can always shift the responsibility onto someone else’s shoulders.

As for payment for goods, basically, the distributor buys the product and pays for it upon shipment, but sometimes companies agree on a deferred payment, partial prepayment, or turn to a financial institution for help. In the latter case, bankers offer to use a form of lending such as factoring. Its essence is that the bank pays for the products that the distributor receives and acquires all rights to the product (legally) for the period until the loan amount is transferred to a special bank account.

Another important point that needs to be emphasized is that a distributor company for a certain product can simultaneously sell any other product. No one has the right to dictate terms to her regarding the formation of the assortment. Therefore, do not be surprised when you come across a situation where the same company is a distributor in your region for several product items.

Dealer

Let's move on to the next subject of trade relations, the study of which will help establish what the difference is between a dealer and a distributor. Both the first and second work with wholesale quantities of goods, but the scheme of their cooperation is as follows: the distributor purchases products from the manufacturer and sells them through its network, which includes dealers, and the latter sell the goods either to subsequent intermediaries or to end consumers.

In this case, the dealer acts on behalf of the manufacturer, his functions include maintaining the image of the product, its advertising, promotion, warranty service, etc. That is, all the efforts of this subject of trade relations are aimed at finding consumers of products, as well as increasing the customer base by awakening interest in the product being sold. The attentive reader may wonder why the dealer does not work directly with the manufacturer.

This fact can be explained very simply: in a specific region, according to the contract, only the distributor has the right to sell goods. He is the first link in the chain after the manufacturer, even the dealer must work through the distributor. But, despite this, the dealer signs a separate agreement with the manufacturer, which discusses all possible nuances, as well as the rights and obligations of the parties.

It is also necessary to clarify that the dealer is a legally independent business entity that independently sets prices for the products sold on the basis of an agreement with the manufacturer. Considering this fact, we can say that the main source of income for the dealer is the difference between the set price for the products sold and its purchase price offered by the manufacturer. But there are other opportunities to make money: the manufacturer pays good bonuses and premiums for large sales volumes and the development of a customer base, and the contract also discusses the amount of remuneration for warranty service of products.

Differences between a distributor and other business entities

To summarize, we can say that a distributor differs from a dealer in many respects:

the first uses an established marketing network to sell goods, and the second independently creates a customer base;

the distributor enters into an agreement with the manufacturer that he is its only representative in a given region, the dealer works according to a different scheme;

the distributor's sales volume is significantly greater than that of the dealer;

the distributor, having complete freedom of action, bears responsibility for the quality of the product, and the dealer shifts it to the manufacturer;

these subjects of trade relations have different functions in the chain producer - final consumer;

If you have problems with any product, you need to contact your dealer for warranty service;

the dealer receives premiums and bonuses from the manufacturer, the distributor only his margin.

The presented article will be incomplete without revealing some issues related to this topic.

Sometimes, novice entrepreneurs do not know the difference between a distributor and a wholesaler, and this can cause negative consequences. A wholesaler works with manufacturers without agreeing on any terms of cooperation. Very often, this may be a one-time deal. A serious, well-promoted manufacturer tries to cover the market with the help of distributors, avoiding transactions with random companies.

At the same time, manufacturing plants that have problems selling their products are ready to sell them to anyone. Therefore, you can buy less liquid goods from a wholesaler, but at low prices, and cooperation with a distributor is a guarantee of stability, high quality and reasonable cost of the purchased products. How, and most importantly, with whom, it is more profitable for you to work, decide for yourself, based on your goals and strategic plans.

Many readers are interested in the question of what is the difference between a distributor and an importer. The first works directly with the manufacturer, selling products through its marketing network in a certain territory. If the manufacturing plant is located in another country, then this company is an importer. The main goal of the second is to buy goods/services, etc. in one country and import them into another for the purpose of sale or consumption. To summarize, we can say that these can be either completely different companies or one legal entity (an individual entrepreneur is not a subject of international relations).

How to become a distributor - who is he and what does he do + 7 detailed steps + recommendations for cooperation with foreign companies.

The concept of “distribution” is familiar to many, although this branch of activity is relatively new in post-Soviet countries.

But despite this, many are interested in the question how to become a distributor.

In fact, it is not difficult, but before choosing such a profession, you need to familiarize yourself with its features and operating principles.

Who is a distributor?

Before moving on to considering how to become a distributor, it is worth finding out who it is.

The word “distributor” is of English origin (distributor) and translated means distributor, distributor.

Speaking in the language of economics, this is an individual (in the form of an individual entrepreneur) or legal entity (enterprise) that purchases goods at low prices directly from the manufacturer for the purpose of their further sale to buyers, dealers or other sellers.

To put it briefly and simply, a distributor is between the manufacturer and the buyer or sellers.

There are several schemes for the movement of goods:

with one or more dealers

Manufacturing company → Distributor → Dealer → Retailer → End consumer

without a dealer

Manufacturing company → Distributor → Retailer → End consumer

direct sales (most often used in network marketing)

Manufacturing company → Distributor → End consumer

As you can see, in the chain of movement of goods from the manufacturer to the final consumer, no matter how long it is, the distributor will be in second place.

He can sell products to dealers, or he can immediately provide them to customers.

The main difference between a distributor and other intermediaries is that he is the official representative of the manufacturer and has the exclusive right to distribute products in a certain territory.

At the same time, a contract is concluded between them, which will describe the terms of cooperation, including the pricing policy.

The distributor's income, in turn, is a discount provided by the manufacturing company.

What types of distributors are there:

• general - has the fundamental right to distribute the goods on his own;
• exclusive - has the sole right to distribute the product in a certain territory. Most often, such distributors form a network of official dealers and sell goods through it.

One manufacturer may have several distributors, and those, in turn, may be representatives of several companies.

What is the difference between a distributor and a dealer?

Many people confuse a distributor with a dealer, because both act as intermediaries and sellers of goods.

The main differences between them are not stated anywhere in law, because the terms of their cooperation will be specified in contracts.

But generally speaking, the distributor sells goods only in wholesale quantities, and the dealer most often works for small wholesale and retail.

How to become a distributor and what does it do?

If you are asking the question: “How to become a distributor?”, then you should know what exactly he does:

• expansion and expansion of the sales network;
• constant monitoring of the sales market;
• promotion, with whom he collaborates;
• searching for new dealers and retailers;
• conducting an analysis of demand for goods in your region;
• providing marketing services to dealers;
• when purchasing electronic or household appliances and equipment, installation, configuration and warranty service.

Step-by-step instructions on how to become a distributor

So, if you are interested in how to become a distributor, then you should know that an agreement will be concluded between you and the manufacturer, which is called a “distribution agreement.”

It will state:

• rights and obligations of both parties;
• conditions for the purchase and sale of goods;
• pricing policy.

Sometimes the manufacturer requires that the future distributor undergo a probationary period.

During this time, he can demonstrate his professionalism in the field of sales.

If everything goes well, then the distributor receives a certificate from an official or exclusive representative of the company.

Now let's move on to step-by-step instructions on how to become a distributor:

Choose the direction you want to work in.

This could include food, household goods, household or electronic appliances, cars and much more.

To do this, analyze the market; perhaps some niches are not yet occupied, but there is a demand for them.

Also consider new companies that are not yet present in your area.

To do this, visit thematic forums and post advertisements.

Passive search for buyers can be done by creating your own website.

Perhaps potential clients will find you on their own.

Travel independently around the region in search of sales points.

To do this, you need to take samples with you and travel around your region with offers of cooperation.

It is important to be able to use your communication skills here.

Create a marketing and sales department.


If you are not ready to work alone, then hire several good marketers and sales people who will have a client base in their track record.

For these purposes, you can use the Internet (social networks, thematic sites), outdoor advertising, and advertisements in local print media.

You will learn from the video what mistakes distributors often make in their activities:

If you are looking for an answer to the question: “ How to become a distributor?”, then decide for yourself how much time you are willing to devote to such activities.

Your income will directly depend on your desire to work.

If you are a student or a young mother, you can choose network marketing, in which case you will only spend half your working day.

And when collaborating with large manufacturers who produce expensive products, you can have millions in turnover at your disposal.

Therefore, choose a direction according to your capabilities and get to work.