Important Role In The Supply Chain: Distributors

In the foreign trade supply chain, goods are distributed from the distributor to the wholesaler then to the final retailer. And there is a very important role: the distributor. So let's see what exactly is a distributor? What is a distributor? First, the distributor is an intermediate entity between a product manufacturer and a retailer. It is an individual or entity that sells goods locally on behalf of the client. Secondly, distributors are different from agents. Distributors are given exclusive distribution rights in a specific region. They purchase goods in their own name, and then set a price to resell them freely. In other words, a distributor is needed between the product manufacturer and the retailer to pass the product to the retailer and eventually reach the user. Distributors not only play a transmitting role in it, but also actively provide manpower and financial support for product distribution, promotion, and services. We can find that distributors are actually special types of wholesalers. In essence, distributors are still wholesalers. This is because in the early supply chain, there was no link between distributors and marketing was at an inefficient stage. Most traditional channels rely on wholesaler. The distributor was evolved from the wholesaler at this time, and the manufacturers granted these qualified wholesalers as its authorized distributors. Development of distributors In China, distributors are often referred to as distributors; while in some foreign business and financial articles, we may see that they are called wholesale distributors and retail distributors. Why do these different names appear? Is there any difference between them? First of all, we need to understand that the distributors in the narrow sense mentioned above refer to this specific role in the supply chain, that is, it is a distributor authorized by the manufacturer and will replace the manufacturer to complete the warehousing, sales, marketing and other functions. With the development of supply chains and distribution channels, broad concepts have emerged. What does a broader distributor mean? In fact, it evolved from distribution channels in the supply chain. As a common example, the European and American market supply chain: brand owner or manufacturer-distributor-wholesaler-retailer-consumer. We can see such a supply and distribution process, where the brand / manufacturer supplies the goods to an authorized distributor, and then the distributor sells the goods to the wholesaler, the wholesaler sells to the retailer, and eventually the retailer sells to the end consumer. In this distribution channel, the narrowly defined distributor refers to this single role in the supply chain. The distributor in the broad sense refers to this product in the supply chain from the product manufacturer to the consumer, and each role involved in distribution can be regarded as a distributor. Because they contribute to such a process of distribution, they are also a distributor. In other words, with the development of the supply chain and distribution channels, distributors continue to expand from the original narrow role to each role in the distribution channel. Therefore, as long as they participate in retail distribution, including some stores and grocery stores, they can be called retail distributors; while participating in the wholesale link of this product, they can be called wholesale distributors.

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