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Difference Between Manufacturer’s Representative Agent and Distributor

There is a strong resemblance with the services offered by manufacturers representative agency and distributors. Both of the said entities are selling products made by manufacturers and neither of them is employed directly by the manufacturers. Rather, they are independently operating. The major difference however is that, distributors are selling and buying goods while these representatives only act as sales agent for manufacturers.

A common distributor buys good straight from the manufacturer at a wholesale price and reselling them either to the consumers or retail outlets. As a matter of fact, distributors take ownership of the product that they sell and they maintain inventory of it. It is the distributors who are in charge of getting the products to the retail stores and if that store requests for additional supply, they order it from the distributors instead of the manufacturer. This is when the distributors generate profit from markup or in other words, the difference between what they have paid to the manufacturer for the goods and what they are charging to clients.

From distribution, production and sales as well, it all needs different level of expertise wherein Chaparral Technologies are expert of. It is actually more efficient for manufacturers to turn into those functions to independent distributors and manufacturers representative agency and representatives instead of trying to build and maintain marketing channels on their own. This allows manufacturers to focus on what they are doing best which is making things.

The truth is, manufacturers representative agency and representatives is frequently used. These kinds of representatives or sales agents are frequently hired for situations when there’s lack of sales force for manufacturers, whenever there is a new product to be introduced in the market, when there’s new market that the company would like to enter but that market isn’t fully developed yet for their sales force to be utilized and when it’s more cost effective than making use of the company’s personnel. The possibility of making sales is unjustifiable to the cost of utilizing sales force of the company or it could be that the company is thinking of others ways on how they can diminish fixed cost risks of their internal sales force.

Aside from those mentioned benefits, some inc. companies and corporations are taking advantage of such service when a retail buyer needs dedicated sales as well as marketing support from the manufacturer.

The truth is, there are lots of great use for working with manufacturer’s representative agency. They ensure that everything is properly set from start to finish while also establishing brand and awareness for company they’re working for. Working with such can be a sensible move if you want to experience success.