Where the waters get murky is when people try to discern the difference between the wholesaler vs the distributor.Ī distributor works closely with a manufacturer in order to sell more goods and gain better visibility on these goods. Thanks to today’s modern asset tracking products and the combined use of devices like mobile computers, barcode scanners, smartphones/tablets, and intuitive asset tracking software, companies have access to full-scale asset tracking solutions that bring increased productivity, simplicity, and most importantly, accountability to all stakeholders across the company. When companies buy products wholesale, it is important to track all these products for the success of your business. Then these institutions use those products for their own operations. The wholesaler can specialize in selling a wide range of different products to other businesses, governmental agencies, or hospitals. The wholesaler is rarely involved in the actual manufacturing of a product, focusing instead on distribution.
In either case, the wholesaler gets large discounts for buying large quantities of goods. To put it into easier to understand language, a wholesaler sells their product in bulk quantities to retailers, allowing the retailer to take advantage of a lower price than if they were to buy single items. The wholesaler will typically buy goods directly from the manufacturer but could also buy from a reseller. The wholesale trade sector comprises establishments engaged in wholesaling merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. Distributors create value by providing total solutions for their customers. They provide aftermarket services, cost reduction and process optimization strategies, as well as inventory management. As a result, the buying process is streamlined, and costs can decrease.ĭistributors also have the benefit of reducing inventory and service burdens for both the manufacturer and the user. Because distributors represent multiple products and companies, they can bundle them together. Distributors do not only offer benefits to manufacturers-they can also be a boon for users. Because they are more localized, distributors can typically offer a faster response to meet customers' needs. If a customer can't find what they need with one source, they will quickly look for a replacement or some other company who can provide what they need. In our fast-paced, demand-driven business world, it is crucial that businesses are able to respond to customers quickly and in real time. Distributors also can provide logistical and storage support for manufacturers. Distribution businesses can buy from manufacturers and sell to retailers, or directly to consumers and/or businesses. They can expedite response times, enhance a company's reach and even create value-added packages. In the supply chain, the distributors are the ones in contact with the manufacturers. The role of the distributor is that of an intermediary entity between the producer of a product and another entity in the distribution channel or supply chain, such as a retailer, a value-added reseller.ĭistributors play a vital part in keeping the lines between manufacturers and users operating smoothly. Manufacturers –> Distributors –> Wholesalers –> Retailers –> Consumers What is a Distributor? There is actually a bit of a hierarchy, or order, to the entire supply chain, and that’s where distributors and wholesalers come in: Or to put it more simply, a supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.
In order to understand the subtle differences between the two and what they offer to various businesses, here’s some insight into both industries to learn what your wholesaler and distributor are doing for your company. However, there is often confusion as to what these two entities do. A company's supply chain relies on wholesalers, distributors, or a combination of the two.
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