Distributorship Vs Dealership

Though distributor and dealer both are the most important parts of supply channel but how they differ from each other, get to know here:

Distributor works with manufacturer to sell their products in the targeted territory. The targeted location may be a part of a region, zone, state or metro city, depending upon the product and area. The business of distribution requires amount to invest and a warehouse for product storage. The distributor pay wholesale price to manufacturer and sell to dealer or retailer keeping their margin on the product price.

distributorship vs dealership

Big names opting for Distributorship Model

Hindustan Unilever, ITC, Siyaram, TCL Corporation etc. are the giants adapted distribution model to multiply their business network.

Dealer is an individual or firm which purchases goods from manufacturer or distributor and sell through retailing. Dealership is similar to distributorship to an extent but involves retailing of a product directly to the end-consumer. Opting dealership of renowned brands come up with nationwide marketing, lucrative incentive schemes, training support, and customer support.

Examples of dealership: Branded Car showrooms, White goods retail stores, Multi-brand garment store etc.

The supply chain almost in all the cases goes as:

Manufacturer —> Distributor —> Wholesaler —> Dealer/ Retailer —> Consumer

Comparison

Below mentioned are the major points from which one can consider how distributors and dealers are different from each other:

Distributor Dealer
What are they An individual or organization that re-sells the products through various channels. A person or business that buys and sells the products to end-consumer.
Known by They are general distributors who deal in all types of products They are known by the product names of their transaction
Link between They are link between the manufacturer and the retailers and rarely sell goods directly to consumers They are in direct touch with the customers
Profit margin Bigger as compared to the dealers Up to the limited range
Receive products from They get products directly from the manufacturers They get products from the manufacturers or distributors
Subjective Appointed for a specific location and faces no competition Faces competition in the area in which they do business
Products can be sold to Can sell the products to many dealers at a time Supposed to sell the products and/or goods only to specific users

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1 Comment on "Distributorship Vs Dealership"

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  1. megha says:

    very useful and relevant information

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