Dealer and Distributor

Dealer and Distributor are two different roles within the same working environment. I am going to be talking about what they do and how they’re different. A distributor is someone who sells a manufacturer’s product, usually under exclusive rights or partial exclusive rights, usually exclusively within a given geographic region or territory. A dealer, on the other hand, is someone who purchases products and sells them to customers “directly”, bypassing the distributor. This article will further briefly highlight the concept of Dealer and Distributor along with its differences.

Dealer

A dealer is someone who purchases products and sells them to customers “directly”, bypassing the distributor. As a dealer, he/she can sell products on his own, or he can contract a distributor to sell his/her products for him.

Functions of Dealer

A dealer can perform the following functions:

• Purchasing and reselling products from the manufacturer
• Providing technical expertise and assistance to customers
• Establishing a network of distributors, sub-dealers & vendors.

Distributors

Distributors are responsible for developing, maintaining, and marketing a specific product line within a territory or region. Distributors typically purchase products directly from the manufacturer and then sell to dealers or end-users. Dealers are usually independent representatives who purchase products for resale or use, usually within a given territory or region that does not extend to the entire country. The line between distributor and dealer can be blurred at times as either one can also serve as an independent representative and resell products under his name.

A distributor is someone who sells a manufacturer’s product, usually under exclusive rights or partial exclusive rights, usually exclusively within a given geographic region or territory. A distributor can be of any size from small businesses to big corporations. It all depends on how big you are compared to the competitors in your geographical area. A general rule of thumb says that if you are considered as a 3rd party for larger companies, then you’re a distributor.

Functions of Distributor

A distributor performs the following functions:

• Maintaining a network of dealers and other sub-distributors.
• Developing, maintaining, and marketing a specific product line within a territory or region.
• Maintaining an adequate inventory of the company’s products. When demand is higher than the supply, they are responsible for warehousing and storing products until needed by dealers within their territory or region.
• Promoting and selling the manufacturer’s products directly to end-users in their territory or region. 

Differences between Dealer and Distributor

1) Dealers and Distributors have different responsibilities & duties.

2) Dealers and Distributors both purchase products from manufacturers, but are responsible for reselling the same to customers in their respective territories or regions.

3) A dealer is someone responsible for purchasing products of a manufacturer and selling them to customers “direct” without involving any distributors or sub-dealers. A dealer has his line of business and can be contacted by manufacturers directly or through distributors who are in the line of business. 

4) Both dealers and distributors can be considered as a third party, along with independent representatives, because they purchase products from manufacturers and sell the same to customers “direct”.

5) Distributors are responsible for providing technical support and assistance to dealers within their territories or regions.

6) A dealer must have an adequate number of products to be considered a distributor within a territory or region. 

7) Dealers can contract distributors to sell the products that they purchase from the manufacturer. 

8) A distributor has the authority to introduce new lines of business, usually through their network of sub-dealers, dealers, system suppliers, and vendors. This is especially true when a manufacturer or importer of a particular product/brand wishes to expand its line-up in different markets.

9) Dealers and distributors are responsible for performing periodic checks on their inventory with manufacturers and distributors respectively.

10) A distributor acts as a liaison between dealers and the manufacturer/importer/company when it comes to carrying out day-to-day operations. Distributors also provide technical support, training, information, and assistance to their dealers, thus improving their profitability.

11) Dealers are more focused on an end-user or end-user product rather than his business itself. 

12) The difference in how Dealer and Distributor function is related to the number of products that they purchase/resell. 

13) A dealer can be considered as a manufacturer’s representative because he/she can purchase products directly from the manufacturer without involving distributors or sub-dealers. Dealers are often called “Independents”.

Conclusion

In conclusion, it’s hard to differentiate between dealers and distributors, because what a dealer can do is also what a distributor can do, and vice versa. Their differences lie in the responsibilities each has on their respective dealings.