Difference Between Manufacturer’s Representative Agent and Distributor
Whether you believe it or not, manufacturers representative agency and distributors are almost the same. Both are selling goods that are made by the manufacturers and is neither employed directly by manufacturers. Rather, they are independently operating. One of the biggest differences between distributors and representatives is that, the former buy and sell goods while the latter serve as sales agent for the 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. 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. 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, production and the distribution demand different levels of expertise in which Chaparral Technologies could 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. This allows manufacturers to focus on what they are doing best which is making things.
As a matter of fact, manufacturers representative agency is used most often. 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 potential of sales might not be justified the cost of using the sales force of the company or the company might like to reduce fixed cost risks of their internal sales force.
Not only you can enjoy these benefits, there are actually inc. companies and corporations that do take advantage of this service when the retail buyer wants a dedicated marketing support and sales team 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.