Difference between distributor and dealer and agent?

Answer 1

Agent is a person(s) who

1. Markets a third party product for a fixed commission defined as a percentage of goods price value he sells. The product can be anything.

2. Typically, and generally, an agent will be authorized to sell for a defined area where no other party is authorized to sell that product legally. Agent can be a source of buying product for retailers, factories for some kind of raw material product like food flavours, colors, etc used in making of some sweets, icecreams, etc.

3. Agent normally operates out of his own office in that area and may be provided reimbursement for his office rent depending on his agreement with principal.

4. Agent will have his own paid employees and workers to execute his operations.

Distributor is a person(s) who

1. Resells a third party product and owns the profit out of cost to prize difference. He may buy a product from principal at X value and sell it at Y price and make a profit. He is regulated by MRP of the product beyond which he cannot sell.

2. Typically, Distributor will be authorized to sell for a defined area where no other party is authorized to sell that product legally. Distributor will be a source of buying for retailers in that area, as he buys the product in bulk quantity.

3. Distributor normally operates out of his own office and generally not paid for his office rentals.

4. Distributor will pay on his own to workers and employees under him.

Dealer is a person(s) who

1. Retails the product of a company directly from a retail outlet. Dealership generally involves retailing of a product directly to end-user. Example of dealership is car showrooms, retail outlets of an apparel company like Peter England, Raymonds, etc. Dealership is associated with Franchisee as well in some cases where the format of retail is controlled by company directly. The interiors, processes will be controlled by company. Company employees may also be working on deputation at dealer's shop.

2. Dealers is also authorized to sell to a defined area but in this case, one dealer can attract the consumers or market of another dealer's area legally. This creates a very high competition between dealers of the same company. Hence, dealers have to maintain a very good relationship with their customers. This is unlike agents and distributors where they cannot advertise and attract customers beyond their defined areas.

3. Dealer may be paid for his office rentals depending on his agreement with principal.

4. Dealer may have employees working for him and paid by principal company directly.