Distributors

One of the most common types of business opportunity ventures, a distributor or dealer is an independent agent who's entered into an agreement to offer and sell the product of another company but isn't entitled to use the manufacturer's name as part of its business name. Depending on the agreement, the distributor may be limited to selling only that company's goods or it may have the freedom to market several different product lines or services from various firms.

Here's an example: An authorized dealer of Nestle products might have a Nestle sign in his window, but he can't call his business as Nestle. Often, the words "dealers" and "distributors" are used interchangeably, but there is a difference: A distributor may sell to several dealers, while a dealer usually sells directly to retailers or consumers.

A distributor is an entity who purchases bulk amounts of product from a manufacturer and distributes it either directly to consumers or to retailers who then sell to the consumer.

A distributor is a key component of the Supply Chain Model used by both Manufacturers and Retailers because it allows a company to specialize or focus operations on its primary strengths of either producing goods or selling to consumers.

Some companies, such as  built their empires by having both internal distribution channels as well as retail stores. This creates enhanced communication between the two functions which allows for flexibility and quicker response times to changing markets.

The business model for distributorsis to buy products from a manufacturer at a low price and sell it to retailers or end users at a higher price.

In order to maximize profit, the distributor must enter into supply agreements offering low purchase prices for a high markup while focusing on operational efficiencies to keep costs low.

Determining goods which may be inexpensively purchased with high markup opportunity requires foresight into market trends and commodity prices.

Operating efficiently requires sophisticated infrastructure and route-planning.

Because of this complexity, many manufacturers and retailers will opt to hire a third-party distributor to distribute products rather than build out their own infrastructure.

There are various B2B portal who connects manufacturer and distributors for flourishing there business. We at E-India Trade provide a platform to grow your business be it manufacturer, distributor or buyer.