What Do Wholesale Distributors Do?

Distributor refers to the middleman who obtains ownership of the goods in the trade. They take ownership of the goods through purchases and resell them, so they bear various risks. The distributor has the right to determine the price. They are only interested in profits and are not loyal to any manufacturer or exporter. Common distribution methods are: distribution, wholesale and retail. ^[1]

Distributor

The relationship between distributors and manufacturers is a buyer-seller relationship, and distributors are completely independent merchants. versus

1. Establish a comprehensive communication system platform between the headquarters, dealers and franchise stores, and maintain timely contact between the two to facilitate business exchanges between the two parties. For example, the Tiantong system inside Renren Bank can timely and accurately release product business information and share it with 500,000 agents in a timely manner.

2. The company's headquarters must maintain its strong position, and the following dealers and franchise stores cannot be easily detached or stand on their own. Always establishing the company headquarters is the legal owner of the business model and owns brand intellectual property, such as trademarks, patents, packaging design, etc., all attributable to the company headquarters.

3. The distributors and franchisees have signed a letter of responsibility with the headquarters, stipulating the responsibilities and obligations between the two, and the two exercise their responsibilities and obligations in accordance with the regulations.

4. Dealers and franchisees must act in accordance with the rules and regulations of the headquarters, and cannot set a separate set of their own rules and regulations. The headquarters shall communicate with them in time to ensure that the dealers and franchise stores maintain the same service standards and price system as the headquarters.

5. The interior and exterior of the dealers and franchisees require consistent decoration and uniform logos, which are not allowed to be replaced at will.

The above is the traditional model for the management of dealers and franchisees.

Nowadays, the main groups of the society are changing. After 1980s and 1990s, they will become the backbone of society and the main force of consumption. The operating methods of enterprises will also change according to the consumption habits of users. In addition to traditional franchising, more and more companies are now trying to distribute on the Internet, attracting more dealers and franchise stores. Enterprises fully deploy e-commerce relying on the establishment of online distribution channels. Compared with traditional models, online distribution models have unparalleled advantages: they are not limited by time and space, save costs, intelligent management, and more diversified sales channels.

Distribution and wholesale are relative, which is the definition of a merchant from a management and planning perspective. The so-called "distributors" are generally enterprises, and they are, in fact, traders with a sense of service terminals.

The distributor usually does not hold the goods in his hand. When he understands that there is a demand, he buys the goods from the manufacturer to sell;

A wholesaler (wholesaler) buys goods in large quantities, no matter if anyone buys them, and then asks someone to sell them;

The distributor has a lot of funds and can withstand long-term occupancy, such as repayment two months after delivery;

The wholesaler generally does not have a lot of funds, and cannot afford to occupy the funds. Generally, the cash is settled. If he occupies more of his funds, the wholesaler's business will be difficult to maintain;

Distributors are generally designated by manufacturers, and their properties are somewhat similar to agents. Manufacturers only ship from distributors;

Wholesalers are not restricted, as long as they have funds to purchase.