by Phil Phillips, PhD
Contributing Editor
phillips@chemarkconsulting.net
One of the most common types of business opportunity ventures, a distributor or dealer is an independent agent who’s entered into an
agreement to offer and sell the product
of another company but isn’t entitled to
use the manufacturer’s name as part of its
business name. Depending on the agreement, the distributor may be limited to
selling only that company’s goods or it
may have the freedom to market several
different product lines or services from
various firms.
In retail, distributors are invisible
to most consumers. Their names mean
nothing to the people who enjoy the
products they deliver. But they effective-
ly (if not always efficiently) bridge the
geographical gap between producer and
retailer. Supermarkets and department
stores couldn’t exist without a compli-
cated distribution system,
Retail distributors can
deliver a lot of value to the
markets they serve for the
manufacturer.
•They transport goods
from large warehouses to
the retail outlets.
• They warehouse materials in different parts of
the country.
•They handle the paperwork between the
retail outlets and the
manufacturers.
•They handle invoicing
and collection.
• They don’t sell for the
manufacturer. That’s
the manufacturer’s job,
Industrial distributors have some
of these same duties for their indus-
trial principles. There are four differ-
ent types of Industrial Distributors in
North America:
1. A stocking distributor only – deliver on time at agreed to price.
2.A stocking distributor with technical product knowledge and TS
capabilities.
3. A stocking distributor with technical product knowledge and TS capabilities and pricing latitude.
4.Any of the above and they can
be exclusive to one principle per
type product or they can be nonexclusive, offering like or near-like products.
An industrial product is any item that
is used in manufacturing or industry.
Examples will vary according to the type
of product being manufactured. Some
common examples include carts or dol-
lies, tapes, adhesives, coatings, sealants,
ladders, lifts, storage lockers, cabinets,
and scaffolding. Other industrial prod-
ucts are personal protection equipment,
office supplies, light fixtures, or tools.
The Industrial Coatings, Adhesives
and Sealants Products channel to
Distributors Are Very Important... Sometimes
Diagram 1
“In many markets,
the manufacturer has
to have distributors,
but they don’t relieve
the manufacturer of
sales responsibility. ”
