What is the Difference Between Dealer and Distributor?

Who is a Dealer?

A dealer is someone who buys a product for their business, stocks it up and then sells them off the rack. They act as a middle man between the distributor and the customer and are authorised sellers of those commodities in a particular area. A dealer attracts customers from other dealers, and a competitive competition is formed in the market. They can sell goods from different brands at an increased price than what had paid, making a huge profit margin. In simple words, a dealer is someone who is engaged in dealing with a particular product, buys it and then sells it off.

Dealer vs Distributor

Who is a Distributor?

A distributor is the only person who distributes goods in a specific area. He is the only source for the retailers and dealers to purchase that product in the area. Usually, a distributor is appointed by the company to sell their product on their behalf. They are the mediator between the manufacturers or producers and retailers, promote and sells the product on behalf of the manufacturers to the concerned entities.

A distributor buys commodities from the company in bulk and sells in small units to other business and outlets. They also offer few services like replacement service, after sale service, technical support, etc. to the customers.

This article is ready to reckoner for all the students to learn the difference between Dealer and Distributor.

Basis Dealer Distributor
Meaning A dealer is someone who buys and sells the goods by himself Distributors distribute the goods and services to other dealers and business.
Establish links between Distributor and Customer Manufacturer and Dealer
Purpose The dealer buys a product for his business and trade for the customers The distributor buys goods from the manufacturers and distributes it to the dealer and other business
Who are they? Principal Agents
Products Deals in a particular category of product Deals with a variety of products
Competition Extreme competitive Not competitive
Selling area Limited Larger

The above mentioned is the concept, that is elucidated in detail about ‘Dealer vs Distributor’ for the Commerce students. To know more, stay tuned to BYJU’S.

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