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Who is a dealer and what does he do? Dealers - who are they? What is an official dealer in trade




Modern society is developing every day at a rapid pace, there are more and more new professions and terms. So, quite recently, now well-known dealers and intermediaries were called merchants. However, in the current market relations, the differences between different types of distributors of goods are clearly defined. Dealers and distributors - who is who, we will try to figure it out in this article.

Who is a dealer

The word "dealer" is of English origin and translates as "agent, merchant". A dealer is a firm or individual that buys products in bulk and sells them in small quantities or at retail.

Also, this group of dealers includes agents of the manufacturer or distributor participating in the transactions.

Thus, the dealer occupies the last place in the commodity exchange chain and is in direct relationship with the final buyer. This is the main answer to the frequently asked question - what is the difference between a dealer and a distributor.

Dealer types

There are two types of dealers in the trade area:

  1. The retail dealer is a classic type of intermediary between trading company and legal and individuals who wish to purchase the product.
  2. An exclusive dealer is an intermediary in the sale of an original rare product in a certain region. He owns the right to represent premium products and has the opportunity to make unlimited profits.

To better understand the difference between a dealer and a distributor, consider their main functions, rights and obligations.

What is the work of dealers

Dealer activity consists in performing intermediary operations:

  • purchase and sale of products manufactured by enterprises or sold by distributors and owners;
  • representing the interests of the manufacturer of goods and its trademark in the market.

Cooperation between dealers and product owners implies the conclusion of an agreement that defines the rights and obligations of each party. But, in addition to the delivery and payment of goods, dealers are required to adhere to certain principles. Thus, the intermediary, in addition to the basic functions, has additional rights and certain obligations to the manufacturer.

In other words, the dealer is fully responsible for his activities, and if the terms of the contract are not fulfilled, he may lose his job. So, if sales are bad, the agent is not actively promoting the brand, and the owner of the goods does not sell the required amount of products, the company may refuse the services of such an intermediary. In this case, the dealership may be transferred to another dealer.

In order for the intermediary to be interested in sales, all manufacturing firms and distributors offer agents a percentage of the actual volume of goods sold, in which the dealer differs from the distributor.

Dealer rights

Each dealer has the right:

  1. Call yourself the official representative of the manufacturer or distributor.
  2. Receive goods subject to dealer discounts. He plays the role of a reseller, so he buys products at special prices.
  3. Represent the trading interests of a manufacturing company in a particular region or among a particular circle of buyers.
  4. Get a loan from a manufacturer to develop your trading activities. It follows from this paragraph that the intermediary does not have to be financially secure. What is the difference between a dealer and a distributor? The fact that he can start his activity with a minimum contribution.

Dealer Responsibilities

There are many more professional features that illustrate the difference between a dealer and a distributor. What is the difference can be determined by the requirements put forward by manufacturers. So, the duties of the dealer include:

  1. Planned purchases - the dealer must buy goods in a certain quantity and with the frequency specified in the contract. If for some reason the intermediary could not sell the required volume of products, then the difference is carried over to the next period. The fact is that the subject of the contract is the purchase by the dealer of goods from the manufacturer, and not its sale to the final buyer. Therefore, the agent is obliged to buy products in a specific volume. When the intermediary is already the owner of the goods, the manufacturer is not interested in the relationship of the dealer with third parties.
  2. Territoriality - the intermediary has its own area of ​​implementation and must adhere to it. As a rule, such a sales territory coincides with the geographical or administrative-territorial division of the country. It can be a village, a city, a region or an entire state. If the contract provides for the right to sell in a particular territory, the dealer can supply the market with his goods in a single person. Although it is possible that other agents with similar products will work in this area. Such saturation with intermediaries is typical for consumer goods (for example, food).
  3. Promotion of goods - this obligation applies to every trader - dealer or distributor, but it manifests itself in different ways. In this paragraph, there are features of each type of trade, which also give an answer to the question - what is the difference. Dealer and distributor are almost equally obliged to promote the sale of goods. Only each of them uses its own marketing tools. So, the dealer must carry out various promotional activities and promotions. Thus, the intermediary actively advertises the commodity producer. And if there are several intermediaries of such a firm in the territory, the promotions of one agent should stimulate sales of all dealers. Promotion is financed only by the intermediary. By comparison, the distributor's marketing campaigns are paid for by the manufacturer of the product.
  4. Trade only goods of one manufacturer. This is especially controlled when the company is fighting with competitors for the sales market. As a general rule, dealers of the same brand must adhere to a specific company style. For example, wear branded clothing, use special equipment with advertising pictures and slogans.
  5. After-sales service - in addition to the sale of goods, the dealer must provide warranty and post-warranty repair of the sold products. Warranty repair is carried out free of charge for the buyer, and the costs incurred by the dealer must be reimbursed by the manufacturer.

Also, the intermediary is obliged to serve customers at a high level, since he is the face of the manufacturer. During communication with the dealer, buyers form an attitude towards the brand, which significantly affects the indicator of commodity demand.

Sometimes the contract may provide for additional obligations: supplying the manufacturer with materials and raw materials, crediting production as an advance payment.

Who is a distributor

A distributor is an individual or entity, which is the official representative of the manufacturer and performs the functions of distributing goods from the enterprise to retail or wholesale resellers - dealers. Such a distributor is an intermediary between manufacturers and subsequent traders. This is an important feature of how a distributor differs from a dealer. Although there are some cases when the distributor works with end customers.

A distributor can be either a large company or one person with certain skills and knowledge.

In addition, the distributor has the exclusive right to sell goods at a reduced price without trade margins. These are the most important differences between a distributor and a dealer.

Distributor functions

The functions of a distributor and a dealer are very similar. The distributor is also engaged in the sale of goods, replenishment of stocks of products and the search for ways to sell them. But still there is a main feature that distinguishes a distributor from a dealer - it is the development and maintenance of a dealer network. That is, the distributor is constantly looking for new intermediaries. Thus, in order to increase large sales volumes, each distributor tries to create his own dealer network, which would bring a stable regular income.

Requirements for distributors

In order to fulfill its functions, the distributor must meet certain requirements. So, it must have:

  • a specially designated place for storing the required amount of goods;
  • own dealer network;
  • cash for lending to intermediaries;
  • qualified personnel.

Such differences between a distributor and a dealer indicate a certain complexity of the profession, since the distributor must have a certain material basis.

Who is more important - distributor or dealer?

Each manufacturer at the very beginning of his activity wants to create a developed sales network for his products. To do this, he uses both distributors and dealers. Both of them perform the same role - the sale of goods. But who brings in more income?

In terms of quantitative indicators of sales and profits, the distributor can be considered the most significant link in the trade chain.

As a rule, an experienced distributor has a large sales network, which ensures stable sales volumes.

But if dealers are removed from this process, distributors will be forced to look for buyers on their own. And this will slow down the auction and significantly affect the profits of the manufacturer. After all, the ability to work with customers is what distinguishes a dealer from a distributor. Therefore, in the process of trade, both distributors and intermediaries are equally important.

At the end of the era of Soviet power in our country, a fashion arose for borrowing from of English language. This phenomenon was associated with changes in the economy.

Today, the situation is such that there are more and more foreign words, and our fellow citizens are gradually learning to understand their meanings. But does everyone realize what the dealer does?

Dealer: who is he and what does he do

"Dealer" comes from the English word "dealer", which translates as "merchant".

Dealer is a member of the marketing channel; a company engaged in wholesale purchases and selling goods mainly at retail (or in small lots).

How dealers work

Dealers are agents of the manufacturer or. Strictly speaking, the dealer completes the intermediary distribution chain, acting as a seller and distributor.

The dealer purchases a certain amount of products, focusing on demand, and thus guarantees the manufacturer a certain volume of the market. The main source of profit for the dealer is the discount provided by the manufacturer (supplier). Its percentage depends on the size of the revolutions.

Of course, the dealer does not determine the price at which he will sell the goods. This is done by the supplier to avoid dumping. As you know, excessive underpricing adversely affects the market.

It is known that some firms that produce goods shift all the worries for their sale onto the shoulders of dealers, because creating your own sales network is not always convenient and very costly. In this case, cooperation with the dealer is beneficial. As a rule, the requirements of the manufacturing company are very strict: it determines the dimensions retail space and reporting forms, “imposes” its own symbolism on the dealer.

The duties of the dealer include not only the purchase and resale of products, but also the formation of its additional consumer value. For this apply:

  • qualified counseling;
  • provision of additional services;
  • sale of related products (of course, these products should not be produced by a competitor).

An exclusive dealer is an intermediary who has the exclusive right to represent the interests of the manufacturer in a particular business area, in a market segment or in a particular region.

Dealer in the securities market

As for the dealer in the securities market, he carries out transactions not as an intermediary, but on his own behalf. This is its difference from a broker, which just performs intermediary functions. Such a dealer (according to Russian law, it can only be a legal entity) sells and buys currency, securities and precious metals, using its own savings for this.

A "regular" dealer is primarily an intermediary representing the interests of the manufacturer. Dealership in the securities market has its own specifics and does not involve mediation.

Good day! The question of who are distributors and who is a dealer is one of the most common among people who are considered new to the business. At first glance, these two concepts practically do not differ from each other, but in fact there is a difference, and it is striking.

In order not to get confused in terms, let's try to understand what is the main difference between what is called a dealer and a person called a distributor, and also consider what responsibilities each of these categories of people working in the business world has.

The concept of "dealership" and "distribution" and their main differences

To begin with, let's deal with the question of who a distributor is.

A distributor is a company that distributes the products of the corporation with which it works. Only after that the goods are resold to the company, which is a dealer.

A distributor can be either one person or a large company, so let's figure out what a distribution company is. This is a relatively large organization with a large staff and, as a rule, engaged in bulk purchases of goods directly from the manufacturer.

Distribution companies are usually divided into the following groups:

  1. Distributors providing their customers with a full range of trading services.
  2. DFs that have a limited list of services provided.

Distribution of products occurs in two ways:

  1. Direct deliveries of goods to the company-realizer.
  2. Work in network marketing.

Understanding what distribution is in trade, and what role it plays in this area of ​​business, we can conclude that:

  • distributors can independently act and make specific decisions in a particular market;
  • they are in the area of ​​financial risk, so they must act very carefully and carefully;
  • in the case of granting a loan to business partners, the intermediary is responsible for possible risks financial losses;
  • the distributor has the right to independently regulate the price category, as well as organize discount programs, promotions, sales. It can also set deadlines for the sale of certain groups of goods.

Who are the dealers?

A dealer is an intermediary who acts as a repurchase in the trading system. This means that when buying products from a distributor, the dealer then resells them either wholesale or retail.

Having dealt with the question of what a dealer and distributor are, it is important to understand what is the difference between these two terms.

Whoever is engaged in the purchase of certain goods with a view to their further sale, both firms necessarily deal with wholesale trade. However, the difference between a dealer and a distributor is that he only buys the product without having direct contact with its manufacturer. At the same time, a dealer company may have several branches scattered not only throughout the country, but throughout the world, and therefore the distributor with whom the contract was concluded has much more responsibility and obligations.

Difference in concepts

What is the difference between a dealer and a distributor? There are 4 main differences here:

  1. The difference between a dealer and a distributor is that the second one works for a company engaged in the production of goods, and therefore is obliged to act strictly on its behalf and obey the prescribed charter. In particular, the established rules also apply to the issue of prices, so the distributor cannot make independent decisions on this matter.
  2. A dealership is an independent enterprise that acts solely on its own behalf, buying goods with the help of a distributor for its own money. Upon receipt of the purchased product, the dealer may sell it at the prices that he has the right to establish at his own discretion.

In some cases, the difference between a distributor and a dealer can be quite thin, so many people who are not versed in the conduct of trade and everything connected with it confuse the two concepts. However, sometimes work as a distributor can be directly intertwined with dealership. In what cases is this possible? Let's figure it out.

Before concluding an agreement between the intermediary and the manufacturer, all the nuances, as well as the conditions for joint work, are carefully discussed, and then fixed in the contract. In some cases, the distributor may act as a dealer, buying goods for his own money. With such a development of events, the buyer is no longer an intermediary, and can sell the purchased goods at a price that he sets himself. Or do with the acquisition what he sees fit.

Two other differences between these concepts are presented below:

  1. A distribution company is an enterprise engaged in the creation and development of a network specializing in the sale of products. In addition, her responsibilities include the promotion and promotion of the brand that she represents. So, the representative of the company is the same distributor.
  2. Dealership is a business area, the main task of which is the delivery of goods directly to the consumer, that is, its successful implementation.

It should be noted that the distribution network is not required to work exclusively for one manufacturer. She has the right to choose partners, and may well represent the interests of several firms at once. At the same time, dealers have the right to hire several distributors to purchase the necessary products. Thus, the owners of outlets have the opportunity to sell different types goods, from food to household chemicals. In this case, each intermediary will be engaged in the delivery of products belonging to a particular category.

Having dealt with the topic of differences between a dealer and a distributor, it is necessary to dwell in more detail on the specifics of the work of each of these parties.

Types of distributors and dealers. Their duties and functions

Distribution is one of the key areas in trade, so people working in this area must be competent and have a steely character. At the same time, their duties to the dealer include:

  • providing a detailed report on the results of transactions (purchase and sale of goods);
  • timely submission of information to a business partner about the state of the sales market, the activities of competing firms, any changes pricing policy etc.;
  • preparation of a detailed marketing plan for purchased products;
  • development of characteristics of clients with whom the intermediary cooperates;
  • providing a business partner (one or more) with all the necessary information about their activities for a certain period of time (the so-called reporting period).

In this case, the type of distribution does not matter - absolutely all distributors are required to comply with these rules.

Types of distributors can be very diverse:

  1. General distributors involved in importing products to other countries on their own or with the help of dealers (a dealer network is one of the most effective sales, but for safety reasons, its choice should be taken very seriously and responsibly).
  2. An exclusive distributor is a company that has the right to cooperate exclusively with one manufacturer. In turn, the manufacturer cannot enter into a cooperation agreement with anyone other than this distribution company.

There is also such a thing as a regional representative. If the question of who the dealers and distributors are and what they do was fully disclosed, then this position has not yet been mentioned. But many people who are just taking their first steps in the field of trade, or intend to infiltrate it, may misunderstand the meaning of the term and get into an awkward position. Therefore, let's dwell on this issue in more detail.

A regional representative is a person who is a rank above a regular distributor. In other words, his responsibilities include:

  • promotion, that is, advertising promotion of the products of the company whose interests he represents;
  • organization of promotions, auctions, sales;
  • work with distributors, etc.

However, this profession is not as simple as it seems, and the regional representative has many more responsibilities than you might think. So, his efforts should be directed to the organization of work not in one particular city, and sometimes not even in the region, but in the whole region. What is the scale of this region, decides the company that has concluded with regional representative labor contract. Sometimes it can even be a whole federal district, so such a member of the trade sector must spend a lot of time and effort on work.

Dealer types

Having dealt with the concept of who a dealer is in trading, it is important to understand the classification of this term. Like distributors, dealers are also divided into 2 groups, in particular, the following:

  1. Exclusive dealers are companies engaged in cooperation and marketing of products of only one manufacturing company. However, do not confuse them with branded stores or outlets are completely different concepts.
  2. What is a franchise dealer and what does he do? Such companies are called authorized dealers. They have the right to sell the products of one or several manufacturers at once, however, they are responsible for the quality of the goods sold only to the consumer.

On top of all of the above, it is worth noting that the relationship in the trading market plays a huge role, both for the distributor and for the dealer. That is why almost all their actions are regulated by an agreement, the violation of which can result in a serious financial collapse for someone who has crossed the established rules.

With coming market economy, the active development of trade relations, both between domestic companies and with foreign ones, many terms have appeared that were not even heard of before. Some of these terms are dealer and distributor.

Even those people who have nothing to do with business must have heard them. After all, they are actively used in advertising by various companies, trying to emphasize their special status. But what do these words mean? Do they provide any advantages, guarantees that the product or service offered by the company is of high quality?

Dealer and distributor are parts of a kind of hierarchical chain that is built during the sale of goods from the manufacturer to the consumer. This chain may not always include these two professions. The main links here are the producer and the consumer. And the dealer is necessary in order to bring the products to the consumer as quickly as possible and on favorable terms to the manufacturer and to encourage him to make a purchase.

This is a natural or legal person who sells goods and services that are not produced by him. He can set the cost himself at his own discretion, because his main goal is to earn as long as possible.

In some cases, the dealer has the right to sell only the product of one company with which he cooperates, if this is agreed in the contract. Although, if there are no such conditions, then they can be employees of several companies at once.

You can take, for example, car dealerships, where products from several manufacturers, both domestic and foreign, can be offered at once. It is beneficial for a dealer to offer products from several companies at once, because he expands the range and increases his chances of selling as many cars as possible.

They can purchase products both directly from the manufacturer and from the official distributor. It already depends on the sales scheme of the manufacturing company.

Official dealer

It is not some special status that gives any privileges. Many dealers emphasize the fact that they are official dealers, raising their status in the eyes of potential buyers. There is nothing wrong.

Under the terms of standard contracts that are concluded with dealers, they have every right to call themselves official. It really works well and increases sales.

A company that produces a particular product must not only produce it, but also sell it. If earlier many firms had their own sales departments, now most of them prefer to use the services of distributors. These are organizations that distribute products, promote it on the market.

The distributor company can be independent, i.e. not associated with the manufacturer in any way, or created by him. Large manufacturers may have several distributors at once. For example, if you take the same cars, their manufacturer, in order to promote them in several large markets at once, must conclude a contract with several distributors.

What do distributors do? They buy products in bulk from the manufacturer and become its official representatives. Then they look for dealers to sell products to them. And it doesn't matter if he can sell the product or not, because the distributor has done his job - he has sold the product.

Although, of course, it is better that the product is sold, and the demand for it is high. The distributor is responsible for the quality of the product, because he is the official representative of the manufacturer. He must also look for and attract new dealers, create, expand his dealer network in order to increase sales. Also, the distributor is engaged in the promotion of goods or services.

Even if he doesn’t have resellers yet, he prepares the ground in advance, promotes the goods so that they are eagerly waiting there and quickly dismantled. Various marketing advertising companies are used, etc. They can also lend to dealers. The manufacturing company, if the distributor does a good job, can reward him, etc.

Exclusive distributors

The functions of such organizations are the same as those of ordinary ones, unless they are the only ones who offer the products of the manufacturing company. An exclusive dealer may be the only manufacturer.

Although, sometimes there can be several exclusive ones. For example, if we take an Asian company producing modern special equipment. She may have an exclusive distributor in our country, with whom dealers from all regions can cooperate. Thanks to this, such special equipment will become available in different parts of the country, sales will increase.

Dealer and distributor: differences

The standard chain looks like this:

Manufacturer - Distributor - Dealer - End customer.

It is more profitable and convenient for manufacturers to work with distributors, because the tasks of promoting the product, its further implementation, and expanding the geography of sales fall on his shoulders.

The distributor purchases goods in bulk, then sells them in small bulk to dealers, and it is they who set the final price. In most cases, the reseller himself has the right to set their own prices. The difference between the two is that the dealer simply buys the product, puts a little on top, and sells it for his own profit. Bought cheap, sold dear. He is an entrepreneur.

The distributor needs to look for dealers, expand the geography of presence, and promote the product. Only proven, reliable, large organizations can be a distributor, while the requirements for dealers are much less.

The dealer practically does not bear any responsibility for the quality of the product, he is just an intermediary. And the distributor is officially responsible for the products promoted on the market.

See also the video about the differences between the concepts:

Useful articles

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Attention! Due to recent changes in legislation, the legal information in this article may be out of date! Our lawyer can advise you free of charge - write a question in the form below:

The modern Russian language is developing along with the economic growth of the country, there is a need for borrowed words, the use of which was not necessary in accordance with the peculiarities of the economic and market systems of the Soviet Union.

What is dealership

In a dynamically developing Russian market the business lexicon was formed. Thanks to the media, people began to recognize more business words and finally stopped confusing a dealer with a leader. But recognition does not always mean understanding. In order to finally understand what the word dealer means, it is necessary to delve into the essence of the issue.

So what is a dealer? Dealership refers to two main activities:

  • A dealer is a direct seller, a distributor. An individual or entity that purchases a large amount of a product from a company (or supplier) at a floor, discount price, and then sells it at a higher price. In other words, a dealer is a commercial intermediary.
  • The dealer is one of the key players in the securities market. He enters the market at his own expense, acts directly on his own behalf. In this case, the dealer is not an intermediary. He is engaged in the purchase and sale of securities, precious metals, using only his own resources.

When a dealer acts as a seller, purchasing goods, as well as services, in a specific volume, he thereby establishes a sales market for the supplier. The main source of dealer profit is a percentage of the discount provided to him, which is set depending on the turnover. Moreover, the manufacturer often offers the dealer to set a certain price level in order to avoid market failures.

First of all, a dealer is a partner who thinks not only about his own interests, but also about the interests of the company, since his activities are carried out not in the first person, but on behalf of the supplier or manufacturer company. Its tasks include not only the purchase, delivery and sale of goods, but also the provision of a certain consumer value for them. There are a number of commonly recognized mechanisms for this:

  • Consulting qualified specialists;
  • A wide range of additional services;
  • A wide range of related products included in the list approved by the dealer agreement and many others.

In some cases, the terms of the dealer agreement are quite harsh: every detail is clearly specified, up to the size of the retail space and the use of the supplier's symbols.

But, in connection with the benefits of dealership, most of the suppliers give the creation of a network for the sale of their products in the hands of dealers. This is quite practical and profitable for both parties to the transaction.

What is an official dealer

When concluding direct contracts with manufacturing companies, we are talking about official dealership. In these cases, the dealer is released from liability directly. All questions about the quality of products, as well as when defects are found, are sent only to manufacturers. The official dealer does not bear direct losses, as it acts on behalf of the manufacturer. The advantage of cooperation with an official dealer for consumers is the provided product guarantees and various related services. In auto centers, this can be:

  • Assistance in obtaining a car loan;
  • Vehicle insurance;
  • Registration.

Dealer network

A dealer network is an interconnected chain of intermediary partners that bring the manufacturer's products directly to the consumer under its single trademark. The dealer network is the most effective economic tool for manufacturers, as it minimizes risks and cash costs, while expanding the sales market. With minimal costs (excluding, for example, communication costs, transportation costs), the quality of sales is growing steadily. But the growth of dealer networks poses a number of challenges for manufacturers:

  • Refinement and verification of market information received from dealers;
  • Constant monitoring of the activities of dealers;
  • Additional resource for managing dealer networks;
  • Optimization of costs that support dealer activity.

Manufacturing companies must improve their dealer network by effectively regulating it, focusing on consumer needs.

How to become a dealer

A dealer is, first of all, a partner who invests his money and his time in the business, having, accordingly, a considerable profit.

If you have an idea to engage in dealership, then if you wish, it will not be difficult. First of all, it is important to know that only a legal entity can become a dealer, so you need to be puzzled by its creation.

Then it is necessary to conclude a dealer agreement with the supplier or directly with the manufacturing company. When concluding a contract, it is important to consider the following:

  • If funds are available, use the services of a marketing agency that will assess market conditions, its saturation, and real value. If funds do not allow hiring a marketer, you can use the necessary statistical data that is in the public domain;
  • Check all conditions and restrictions on the part of the supplier specified in the contract;
  • Specify your profit and other benefits in the contract;
  • Engage lawyers to review and clarify this agreement during the first steps in the dealership;
  • As much as possible check the transparency of each clause of the dealer agreement (agreement).

It must be remembered that the amount of your profit will be proportional to the volume of sales. The level of competition in the dealership is quite low, so you can plan sales growth in advance. With long-term cooperation, positive recommendations also appear, and this leads to more trusting partnerships, and, as a result, to an increase in your dealer discount and bonuses from suppliers.