Difference between a Dealer and a Distributor

The process of manufacturing and sales is a long one and a lot of people and companies are involved in bringing the finished product to the consumers. The product is manufactured by the producer, then it is handed over to the distributors who take it to the dealers and it is from dealers that it reaches the market and the end consumer.

The supply and demand chain is not operated by one but many hands and to understand it the right way, it is necessary to understand the roles of dealers and distributors in the market.


Dealer vs Distributor

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. This way the retailers or the consumers get to know who is dealing in the product and they the approach the right dealers.

Dealer vs Distributor

What is the difference between a dealer and a distributor? Probably the main one is that a dealer exclusively caters to the public or end consumer, whereas a distributor directly coordinates with manufactures. They both work in collaboration as it is the distributor who gets the merchandise from the manufacturer and hands it over to the dealers, but it is the dealer who takes it forward to the market and consumers.

The responsibility of selling a product falls on the dealers because they are dealing directly with consumers while the distributors do not have anything to do with the consumers because they work directly with manufacturers and dealers. Also, while the dealer gets the sales profit from consumers, the distributor gets it from the company because they buy in bulk and sell it to the dealers for a set price.

Another difference which sets dealer and distributor apart is that dealers can only sell products in a limited area or region; distributors can sell products to many dealers at the same time, without restriction of area.

Comparison Chart

Dealer Distributor
A dealer is a person or a company that buys and sells specific kinds of goods and products A distributor is a person or a company that supplies goods to dealers and other businesses
Dealers buy products for their own account and sell them to the customers from their own stock Distributors buy products directly from the company and sell them to various vendors who take them to the market
A dealer is the link between distributor and consumer A distributor is the link between manufacturer and dealer
Dealers deal in products which fall under a particular category Distributors deal in a variety of products
Dealers face a lot of competition because they are the main buyers and responsible for products in the market Distributors do not face any competition because they just have to hand over the products to dealers