Difference between Distributor and Dealer

Key difference: A distributor supplies the goods to the stores or businesses, while a dealer first buys and then sells the goods to the stores and businesses.

A distributor is an entity that buys non-competing products or product lines, warehouses them, and resells them to retailers or directly to the end users or customers in a business. Their basic function is to provide strong manpower and cash support to the supplier or manufacturer's promotional efforts. They also provide a range of services such as product information, estimates, technical support, after-sales services, and credit to their customers.

They supply the goods directly to the stores or other businesses that sell to the consumers. These are intermediates between the producers and consumers. They distribute the products through channels, which are interdependent organizations and which are designed by the firms in a proper path-organization.

A dealer in a business is an individual or firm that buys goods from a producer or distributor for wholesale and/or retail reselling. They buy the product and then resell them again to the store and businesses. They act as a middleman between the manufacturer and the consumer.

They sell and buy the products, and hence they are known by the type of products they use for transaction, for example, antique dealer, car dealer, arms dealer, art dealer etc. A dealer is the one who does the work with a motive of the profit transaction, that is he gets a share of income from the customer. The companies mostly prefer the dealers to sell their products in order to avoid the competition. It is always the dealer’s responsibility to sell the product. They purchase the products under various schemes from the distributor; however, many companies deal with the dealers directly.

Comparison between the Distributor and Dealer:




What are they

An individual or organization that re-sells the products.

A person or business that buys and sells the products.

Known by

They are general distributors who supply all types of products.

They are known by the product names of their transaction.

Link between

They are link between the manufacturer and the dealer.

They are in direct contact with the customers.

Receive products from

They get the products directly from the manufacturers.

They get the products from the distributors.

Directly deal with

They directly deal with the manufacturers.

They directly deal with the companies.

End-user relation

They are not in direct contact with the end-users.

They sell the products to the end-users.


They are appointed for a specific area and place and they face no competition.

They do face competition in the market or the area, in which they do business.

Profit margin

Their profit margin is bigger compared to the dealers.

Their profit margin is up to the limited range.

Products can be sell to

They can sell the products to many dealers at a time.

They are supposed to sell the products and/or goods only to specific users.

Image Courtesy: pressureprofile.com, varle.lt

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