Difference Between Manufacturer’s Representative Agent and Distributor
Whether you believe it or not, manufacturers representative agency and distributors are almost the same. Both of the said entities are selling products made by manufacturers and neither of them is employed directly by the manufacturers. What they are actually is an independent entity. The major difference however is that, distributors are selling and buying goods while these representatives only act as sales agent for manufacturers.
What distributors typically do is purchase the goods right from the manufacturer but at wholesale price and then, pass it on to retail outlets or to consumers. In reality, distributors take ownership of the items they are selling and at the same time, maintain inventory of it. Distributors are in charge to get products into retail stores and whenever that store need additional inventory, they are ordering it from distributors instead of the manufacturer. It’s when how distributors make profit from their markup or simply put, the difference between what they pay to the manufacturer’s goods and to what is charged to their clients.
The sales, distribution and production require various levels of expertise to which Chaparral Technologies can provide. 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. Basically, this makes it feasible for the manufacturers to concentrate on what they are doing best, which is to produce and manufacture things.
The truth is, manufacturers representative agency and representatives is frequently used. These representatives or sales agents are hired normally for situations whenever there is lack of sales force for the manufacturer, whenever a new product has to be introduced in the market, when there is a new market that the company would want to enter but it is not yet developed in full for their sales force to be used and when it is more effective than using 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.
In addition to the aforementioned benefits, there are inc. companies and corporations that are making the most of these kinds of services when the retail buyer wants dedicated sales and marketing support from the manufacturer.
As a matter of fact, there are tons of great use for hiring manufacturer’s representative agency. They will make sure that everything is set properly from start to finish while establishing brand and awareness for the company they are working for. Working with such can be a sensible move if you want to experience success.