Wholesaler vs Distributor: Examples

Who is Wholesaler?

A wholesaler is a person who operates as a mediator between the distributor and retailer. These people buy a product in a considerable quantity from the distributor or manufacturer at a cheaper rate, and resell it to the retailers at a higher price to make profits.

In supply chain business wholesaler plays an integral part as they buy the product in bulk, and then break the bulk into small sections, holds inventory in a warehouse, and deliver the product to the buyers.

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

Parameters Wholesaler Distributor
Meaning A wholesaler purchases product in mass and resells it to the retailers A distributor is engaged in supply chain network for distributing product and services to the business and customers
Contract No contract required Has to sign a contract with the manufacturers
Customers Retailers Retailers, wholesaler, and end-users
Level of distribution II and III level channel III level channel
Area of operation Limited Large
Promotion No promotional activity needed Promotion is required to promote the product

Who is a Distributor?

A distributor is a mediator who distributes the goods and services in the supply chain network. A manufacturer cannot sell a product directly to the customers. So, the distributor act as an agent for the manufacturer, where the distributor stocks and trades the product to retailers in different parts and locations.

A distributor signs an agreement with producers of the product to endorse and sell their goods and services to the retailers and end-users. But he is not permitted to use the producer’s trademark. The distributors are also known as a channel partner.

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

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  1. Good to learn