Distributor
Also called wholesale distributor
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is distributor?
A distributor is a company that buys products in bulk from manufacturers, holds them in stock and resells them in smaller quantities to other businesses. Its customers include contractors, manufacturers, retailers and institutions, and many distributors add services such as technical advice, credit terms, fast local delivery and inventory management.
How it works
Manufacturers sell through distributors because serving thousands of small customers directly is expensive: every order needs picking, shipping, invoicing and collecting. A distributor spreads that cost across many manufacturers’ product lines, so a customer can buy pipe, fittings and tools from one supplier on one invoice. In return, the distributor carries the inventory and owns the day-to-day customer relationship. How the word compares with “wholesaler” is covered under distributor vs wholesaler.
Distributor example
An HVAC contractor needs a condenser, line sets and refrigerant on site first thing tomorrow. Rather than call three manufacturers, the contractor calls the local branch of a distributor that stocks all three and can put them on the morning truck.
Related terms
- WholesalerA wholesaler is a business that buys goods in large quantities and resells them to other businesses rather than to consumers.
- SupplierA supplier is any business that provides products or services to another business.
- Value-added distributorA value-added distributor is a distributor that does extra work on what it sells, such as assembly, kitting, cutting to length or custom labeling.
- Master distributorA master distributor is a distributor that sells only to other distributors, not to end users.
- Two-step distributionTwo-step distribution is a supply chain in which a distributor buys from manufacturers and sells to dealers, which then sell to the end users.
