When you buy something from your favourite shop, it’s likely that it came from a number of places. For businesses that produce durable goods and other products, bringing a product to market requires a powerful marketing channel. Between the producer and the customer, there are normally many middlemen in a supply chain. Distributors, wholesalers, and retailers are the most popular players in the supply chain. The distinction between them is due to a variety of reasons, we can understand it as a difference in the number of items they have on hand.
The distributors are the ones that interact with the suppliers in the supply chain. A distributor serves as a link between a product’s manufacturer and another individual in the distribution system or supply chains, such as a retailer or a value-added reseller.
Distributors play a critical role in keeping the lines of communication open between suppliers and end-users. They can shorten response times, expand a company’s reach, and even provide value-added services. Distributors can buy from suppliers and sell to retailers, or they can sell to customers and/or companies directly. Distributors can also assist suppliers with distribution and storage.
Businesses must be able to respond to customers quickly and in real-time in today’s fast-paced, demand-driven business environment. If a customer can’t find what they’re looking for from one source, they’ll quickly search for a workaround or another company that can. Distributors will usually have a quicker response to satisfy customers’ needs because they are more regional. They are beneficial not only to producers, but they can also be beneficial to consumers. Distributors will bundle goods and companies together since they represent different brands. As a consequence, the purchasing process is simplified, and prices can be reduced.
Distributors also support both the manufacturer and the customer by reducing inventory and service burdens. They offer aftermarket services, as well as techniques for cost control and process optimization, as well as inventory management. Distributors bring value to their customers by offering full solutions.
The wholesaler can be thought of as a middleman who buys products in large quantities and resells them to the retailers for a profit. He or she serves as a connection between a manufacturer and a retailer. Wholesalers purchase items at low prices and market them to consumers at higher prices since they buy directly from the manufacturer or supplier of goods. As a result, the remaining sum is a source of income.
A wholesaler sells bulk amounts of their goods to customers, allowing them to get a better deal than if they bought individual products. In this case, the wholesaler saves a lot of money by purchasing vast amounts of products. The wholesaler is rarely involved in the production of a commodity, preferring to concentrate on distribution. The term “wholesale” refers to large-scale purchases. Wholesalers may specialize in selling a variety of goods to other companies, government agencies, and hospitals. These institutions then use goods for their own purposes.
Retailers buy products from suppliers, wholesalers, and other distributors and resell them to the general public. Large retailers like Walmart and Target buy in bulk from suppliers or wholesalers, but small, family-run pharmacies or your neighborhood grocery store can purchase from the same sources or from smaller vendors.
A retailer does not produce any of the items they sell; rather, they are the final link in the distribution chain, linking and distributing goods and services to consumers directly. The retailer sells the products to the final at a markup—the difference between the selling price and the resale price—in either case. This is how businesses make money.
Distributors work with manufacturer
Manufacturers that distributors serve frequently have a business relationship with them. Many distributors have exclusive purchase agreements in place that restrict the number of participants or allow them to cover a particular region. For prospective customers of such goods, the dealer is the manufacturer’s direct point of contact. Distributors, on the other hand, rarely market a manufacturer’s products directly to customers. Distributors choose to deal with wholesale representatives and can purchase large quantities of one commodity due to the large quantities of each product they have on hand or may obtain from manufacturers. However, distributors also deal directly with manufacturers.
Wholesalers buy from manufacturer
Wholesalers procure vast amounts of goods from manufacturers directly. A wholesaler’s purchasing power is usually improved by large purchase orders. Many distributors can give you a discount if you buy a certain number of products or spend a certain amount on merchandise. Wholesalers purchase a wide range of products, including phones, televisions, and computers, as well as bicycles, clothes, furniture, and food. Frequently, the items are meant for retailers, which can be either physical stores or online e-commerce businesses.
Retailers sell to consumers
Retailers are for-profit companies that offer goods directly to customers, both small and large. In order to make a profit, retailers look for goods that align with their goals and locate suppliers that provide the best deals. A distributor or wholesaler may usually buy limited amounts of an item from a manufacturer. For example, a retailer interested in purchasing a dozen lamps might inquire about pricing with lighting distributors.
A manufacturer’s activity relies on raw materials that become finished goods, but the sale process must keep up with the production schedule or the manufacturer will end up with too many things. The primary differences between wholesalers, distributors, and retailers depend on the business model and merchandising objectives of each company.
Distributors play the most complicated function of the three, as they must improve product awareness and sales through advertising campaigns. Distributors must also account for the transportation of goods to wholesalers or retailers. They are never permitted to sell goods to end customers, even though they can pass products to these two intermediaries.
MGH distributors in Yangon, Myanmar, is the leading and best distribution company in Myanmar. They act as a middleman between the manufacturers and the retailers and saves time and money. For any type of distribution services, contact MGH distributors.