When it comes to product distribution, it is important to understand the difference between distributors and wholesalers. A distributor works closely with a manufacturer to sell more products and gain better visibility of these products. They find wholesalers who will resell their products. On the other hand, wholesalers are merchants who buy products in bulk and sell them in smaller quantities.
A supplier is a person or group that acts as a source of goods and services. They provide the manufacturer's products, and sometimes the manufacturer and the supplier are one and the same. A supplier works with distributors and wholesalers to get the products they need. Without suppliers, no retailer would have access to the products they want to sell.
A distributor has a direct relationship with manufacturers, while a wholesaler buys large quantities of products from the distributor. A distributor serves as an intermediary that helps retailers have access to the products and services they want to sell. They often enter into an exclusive purchase agreement, which limits the number of people who can sell the merchandise. Distributors use multiple distribution channels to find the right wholesalers and retailers, forming an essential link between market and consumer.
They don't usually sell products directly to customers, although sometimes they can. More likely to work with wholesalers or sometimes sell directly to retailers. A wholesaler works more closely with retailers to meet their needs by purchasing products in bulk at a discount. They are essential to the distribution process by ensuring that other parties have access to the goods or services they require.
A company can work with a wholesaler if they decide to run a wholesale business or be a B2B company. If you work with a wholesaler, you're less likely to sell directly to consumers. When developing a product, you must have both a wholesale and a retail price, if you are also going to sell directly to retailers. Selling directly to retailers can help a food and beverage manufacturer put their products on supermarket shelves or in local stores, or help a fashion designer find the right wholesalers for their products. Working with a distributor helps a company grow, either by allowing them to further distribute their products or by helping them expand the products they sell as a retailer. Working with a wholesaler can also be useful if you own a retail business, or even to insure materials if you buy supplies in bulk. It is important to know the role of a supplier, distributor and wholesaler so that you understand how they could fit into your supply chain.
There are certain reasons why you might work with one party instead of another, or why more than one could be useful for your business.
