Frequently Asked Questions
Agent vs Distributor
Agents and distributors often work closely together, but their roles are very different from each other.
They both sell goods that manufacturers make, and both work independently without direct employment from them, but distributors buy and sell goods while representatives act as sales agents.
An agent, sometimes referred to as manufacturer’s representative, works as a sales person contacting potential buyers, promoting the manufacturer’s products and closing sales. They do not own the products they are selling and do not keep an inventory; they will sometimes have samples, however. Their main goal is to acquire customers for the products of the manufacturers. Their incentive to sell product is based on a commission of the sales they make rather than having a full work contract.
Distributors typically buy large quantities of product directly from the manufacturer and then resell them to consumers or retailors. When a distributor has successfully established a relationship with a store, they are the ones the store will return to in order to restock products. Distributors makes money from selling the products to the stores at a higher price than what they paid to the manufacturer.
Which is right for your business?
Manufacturing is a vastly different expertise from sales and distribution, so getting a relationship with an agent or distributor allows the producer of goods to focus on making more product instead of dividing time between making and selling. Distributors and agents also maintain their own relationships with stores where they can facilitate relationships between the manufacturer and retailer.
The distributor model is much more common in the United States than working with a manufacturer’s representative. Additionally, agents typically work with B2B sales rather than getting products into a retail front. Both are great options for your business, but finding a distributor will probably be easier when looking to sell in the U.S.