Difference between Distributor and Retailer

Key difference: The main difference between a distributor and a retailer is that, a distributor supplies the products, goods and/or services, while a retailer sells the products, goods and/or services. 

A distributor is one who distributes the goods, products and/or services to the respective authorities, which may include any one, the retailer, supplier, etc. In business, a distributor acts as an ‘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’. They provide strong manpower and cash support to the supplier or manufacturer's promotional efforts.

They supply the services such as product information, estimations, technical supports, after-sales services and credits to the customer. They also supply goods directly to the stores or other businesses, who sell to the consumers. Their distribution of products takes place in channels, which are interdependent organizations and are designed by firms with the help of proper path-orientation. They also maintain an exclusive buying agreement, which limits their participants and enable them to cover a certain territory.

Retailers are basically sellers, who are at the end position of any business management system and who sell the products to customers. They are direct representative of the consumers, that is, they help the manufacturers to know about the need and requirements of the consumer. They are ‘a business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sells their goods to another business’.

Generally, a retailer buys a small quantity of items from a distributor or a wholesaler, in order to gain profit, which would coincide with their business objectives. They purchase the products at a competitive prize from the suppliers and market them according to their benefits. They are generally shopkeepers, who make the product available to the consumers.

Comparison between Distributor and Retailer:

 

Distributor

Retailer

Who are they

A distributor is a person who distributes and supplies the products to the other respective authorities.

A retailer is a person or business who sells the products or services directly to end customers.

Relation with

They frequently have a relationship with the manufacturers.

They have a direct relation with the consumers.

Functions

They supply the goods, products and services to the retailers.

They sell the goods, products and services to the end-users.

Knowledge about the consumer’s need.

They are unaware about the local needs and demands of the end-users.

They know about the end-users needs and demands.

Link between

They act as a link between the manufacturer and the retailer.

They act as a link between the supplier and consumers.

Systems

They supply the products through a chain management system.

Their sale does not include any such management.

What roles they can be

The distributors may be manufacturers.

They cannot be manufacturers.

Prize at which they sell the products

The prices at which they supply the products are the overall wholesale prices.

They sell the products with their profit margin and also along with the recognized price.

Receives goods from

They commonly buy from the manufacturer.

They commonly buy from the distributors.

Image Courtesy: channelmarketerreport.com, aarusolutions.com

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Comments

Who will gain more profit from the manufactures (Distributors or retailers)

May i ask why can't a retailer also be the manufacturer?

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