What is a distributor?

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A firm’s distribution can greatly affect it. Generally, a comprehensive distribution structure indicates that the firm has a better opportunity to sell more of its goods than its competitors. Higher margins absorb raw material price increases better and survive longer in difficult market conditions for the firm that spreads its goods wider and faster into the market at cheaper prices than its competitors.

Any company or service relies heavily on distribution. If the goods are not available for purchase at the points where customers can buy it, the best pricing, promotion, and people are all for nothing. A distributor, also known as a dealer, is an independent agent who has entered into an agreement to distribute and sell products of some other business but is not permitted to use the manufacturer’s name in its corporate identity.

In a certain location, a distributor is the only individual that distributes commodities. He will only be the source inside the region where retailers and dealers may get such goods. The firm usually appoints a distributor to market its product on its behalf. They function as a middleman between manufacturers and retailers, promoting and selling products on behalf of the manufacturers towards the responsible authorities.

A distributor purchases goods in bulk from a company and resells them in small quantities to other businesses and channels. Customers can also make use of services such as after-sale, replacement, and technical support. The distributor may be constrained to selling solely a particular company’s products, or it may have the flexibility to sell multiple other product lines or services from different companies, depending on the agreement.

About the author

Pieter Borremans
By Pieter Borremans

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