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Two-step distribution

Also called two-step, two-tier distribution

Dasha ShakovReviewed by Dasha ShakovVP Marketing, Proton

Updated

What is two-step distribution?

Two-step distribution is a supply chain in which a distributor buys from manufacturers and sells to dealers, which then sell to the end users. The product passes through two resellers; the term is common in building materials, where two-step distributors supply lumberyards and dealers.

How it works

A two-step distributor and a master distributor both sell to other resellers, and the terms overlap. “Two-step” is heard where the next reseller is a dealer or retail yard; “master distributor” where it is another distributor.

Two-step distribution example

A building products distributor buys roofing by the truckload and sells it to 60 independent lumberyards, which sell it to the roofers in their towns.

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