In business, we need goods so that we can run the business successfully. For this, we need the help of two people who will do this work for us. The person who will supply the goods for us is called the Distributors. And the person who will buy and sell the goods are called Dealers. Both of them play an important role in the marketing area, which is good for business.
Key Takeaways
- A distributor is a middleman between the manufacturer and the dealer who purchases and sells the products to the customers.
- A dealer purchases the products from the manufacturer or distributor and sells them to the end customers.
- A distributor works with multiple manufacturers, while a dealer represents a single manufacturer.
Distributor vs Dealer
A distributor is a person or a company that buys products from manufacturers in bulk and then sells them to retailers or directly to consumers, providing a link in the supply chain. A dealer is a person that sells products directly to customers on behalf of a manufacturer or distributor.
Distributors will supply goods to retailers by getting the products from manufacturers and suppliers. Every brand will have an owner and a distributor. Without them, it cannot function. Both of them will play an important role in that part. For example, if you take a car company, there will be a distributor who will supply the goods that are needed in making the car.
A dealer is a person who deals with buying and selling goods. They can do this work as an individual who will make a profit on their own. Or they can join a company and register them as a dealer who will make a profit for the company they are working for. You can easily start a dealership for your business by following some simple steps to register your business.
Comparison Table
| Parameters of Comparison | Distributor | Dealer |
|---|---|---|
| Dealing area | It will fall in a variety of areas. | It deals with the product that falls under the particular category. |
| Competition | The competition involved for distributors are extreme. | The competition involved for dealers are moderate. |
| Links created | It will create the link between manufacturer and dealer. | It will create the link between distributor and creator. |
| Area serving | The area served will be large. | The area served will be limited. |
| Goods | They will produce everything in bulk. | They will not produce in bulk and produce them as single items. |
What is Distributor?
A distributor is a person who will supply goods to retailers. They will manage both the stocks and goods in a business. For this, they should have excellent product knowledge, and then only they can maintain and check the quality of the goods. They should also establish a network with vendors, clients, and suppliers. Distributors are very important in terms of marketing perspective. Their main work is to forecast the market needs.
They are always closer to the market so that they will know what the customers want, and they will start to distribute goods according to that. They will help in providing the market information. You can easily become a distributor by following some basic steps. The first thing is to identify the industry you will serve. Identifying the industry is very important, and then only you will know whether the goods you will distribute will give you a good source of income.
Once you have found the industry, you have to register the business. This is a legal step, and everything should be done legally. Then you have to seek the manufacturers and suppliers who will manufacture and supply the goods for distribution. Then you have to plan the transport mode in which you are going to distribute. The transport mode will depend on the type of goods you will distribute. And the last important step is to build some good relationships with people.
What is Dealer?
A dealer is a person who buys goods and sells those goods. In the marketing area, they are considered important figures. They provide securities, one of the main reasons for their importance. They are individuals or companies who buy and sell capital assets with the help of their accounts. Sometimes for business needs, we will also use brokers to close the deal. They will provide offer related services for investors who invest in the company.
They are also called traders sometimes, depending on the type of work they do. If a person is in real estate, which helps in buying and selling process, then that person will become a dealer. If they also do this for a long period, then they are considered dealers in that case. For the ultimate consumer, they will provide service functions. There is also a term available called stock dealer, meaning they will do this dealing process financially.
This name will not be applied to everyone who is involved in dealing. If a person is involved in dealing in terms of business, then only they will be termed as the stock dealer. If a stock dealer is not involved in buying and selling business goods, they will be called a trader. There are many types of dealers. They will be classified depending on the type of business they do. We can also register a dealer under the act for our company which will make it even more legal.
Main Differences Between Distributor and Dealer
- The dealing area of distributors is very large, and they will not fall under one category. On the other hand, the dealing area of dealers is not large, and they will fall under a particular category.
- The competition for distributors is very large. On the other hand, the competition for dealers is small.
- The distributor will help in creating a link between the manufacturer and the dealer. On the other hand, dealers will help in creating a link between the distributor and the creator.
- Distributors will always serve in large areas. On the other hand, dealers will serve in a limited area.
- Distributors used to produce goods in bulk amounts. On the other hand, dealers will produce goods in single items and not in bulk amounts.
- https://www.emerald.com/insight/content/doi/10.1108/13555850410765221/full/html
- https://link.springer.com/chapter/10.1007/978-1-349-06925-5_7
Last Updated : 13 July, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
The article effectively highlights the key takeaways about distributors and dealers, providing a comprehensive understanding of their roles and functions in business.
This article provides an excellent comparison between distributors and dealers, explaining their roles and importance very clearly.