What is the difference between dealer and distributor

The public, or end consumer, constantly requires products to be available for purchase to meet some need or desire. The consumer purchases these products from the dealer in a retail environment. The dealer has products available as it procures different items from distributors. Distributors purchase products from manufacturers. In this way, the importance of both dealer and distributor becomes evident: one cannot exist without the other.

Difference Between Distributor and Dealer. Difference Between Similar Terms and Objects. MLA 8 Ewan, Dart. Name required. Email required. Please note: comment moderation is enabled and may delay your comment.

There is no need to resubmit your comment. Notify me of followup comments via e-mail. Written by : de. Encyclopedia of Small Business. Michigan: Thomson Gale. Print [1]distributor. WebFinance, Inc. March 31, Difference between Dealer and Distributor. Another type of distributor is the contract distributor who buys products from a manufacturer, combines them with other products, thus increasing the total value and then resells them.

Therefore a contract distributor is different from wholesale distributors in the sense that, wholesale distributors only purchase products, while contract distributors combine them with other products from different producers. A dealer is an individual who actively purchases goods from manufacturers and then sells them off as part of their account or stock.

To put it simply, a dealer is someone who deals with the trade of a particular item or commodity. He or she indulges in commercial trading for themselves, as a part of their business. Another definition of a dealer is the middleman between the consumer and the distributor is the dealer.

They too, like distributors, are authorised to sell these commodities in their particular area. What makes a dealer different from other middlemen is that a dealer can always attract customers loyal to other dealers or from a different area. For example, if you decide to visit the pizza chain outlet five blocks away, instead of the one in your neighbourhood, you know the dealer has successfully attracted you. A dealer can sell products and items of the rival, competing brands, out of which some will have more customers, and some, a weaker customer base.

He or she makes a profit out of selling these at a higher price than what he purchased for. While both a dealer and a distributor forms an essential part of the supply chain, there are several significant differences between the two, that can be summed up in the following points.

A dealer pacts with specific types of products while a distributor is an individual who supplies certain types of products to the market. A distributor is an independent selling agent who is contracted to sell the products of a manufacturer. A distributor is not a manufacturer and cannot represent the product or the merchandise but only handle its distribution to the market and vendors. The distributor has no specific area to work or distribute the products; they can do it in as many areas or regions as they can handle.

A dealer is the person or a company who deals directly with the end consumer and sells the products of a company. In return, a dealer gets margin of profit on the sale of every product or service. Manufacturers and companies appoint dealers because they cannot get into the market themselves or hand over their products to retailers.

Distributors usually deal with manufacturing companies what often requires a significant time and financial investments. Distributors also spend more time traveling than dealers. Both dealers and distributors both deliver products, only the dealer sells to customers, while distributor to dealers.

They also differ in terms of business models and financial engagement. Toggle navigation. Dealer vs.