What is a Distributor?

DistributorWhat does distributor mean?

A business that is dedicated to making inventories of products from various manufacturers that will be sold to various retailers. Distributors will be able to take advantage of shorter lead times and will generally sell in smaller quantities than manufacturers. When products are sold via a distributor instead of directly from the manufacturer there will usually be a fee charged for the service.

A distributor buys non competing products or product lines, and the resale of the products can also be direct to the customer. Distributors often have a signed agreement with a manufacturer, and this limits them from selling competing products. This agreement will often allow the distributor to describe themselves as a distributor for Product XYZ, but they are not allowed to use the XYZ name as part of their business name. Because they are closely aligned with the manufacturer, a distributor will also often offer a range of services to their customers such as technical support, after sale service, credit, product information, and estimates.

Distributors are often called dealers, but there is a key difference between distributors and dealers. Distributors will sell to many different dealers, and even to the retail public at times, while dealers only sell to the retail public.

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