Distributorship

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 Distributorship
A wholesaler with exclusive rights to
market and sell the products of a
manufacturer or supplier, usually within a
specified territory.
 01
What is a Distributor?
  Distributor

is considered an independent selling agent. This means that the distributor

has permission to sell the product as specified in the contract, but is not
entitled to use the trade name as part of its business. The distributorship
agreement may also specify that the distributor is bound to sell the
supplier’s products exclusively, meaning it cannot sell similar products
from another supplier. Large-scale distributors are often referred to as
“wholesalers.”
 STRUCTURE
MANUFACTURER

DISTRIBUTOR

WHOLESALER WHOLESALER

RETAILER RETAILER RETAILER RETAILER

 Dealership
Another type of distributor is called a “dealership.” While both entities sell
the products of another company (the supplier), there is an important
difference: use of the supplier’s name. A distributorship can sell the
products of the supplier, post images and advertising proclaiming that it
sells the supplier’s products, but the distributorship cannot include the
supplier’s name in the name of its own business. A dealership is a type of
exclusive distributorship in which the distributor can use the supplier’s
name in its own business name.
EXCLUSIVE
DISTRIBUTORSHIP

A distributor that is granted exclusive distribution rights is guaranteed to be the only

dealer or retailer of a specific product in a specified area, or to be the only dealer or
retailer to supply the product to a specified group of people. Contracts for exclusive
distribution are most commonly seen in high-end products that require the sales
staff to have some degree of training. An exclusive distributorship agreement gives
the manufacturer or supplier greater control over how its product is sold.
Additionally, exclusive distribution provides some protection to the distributor
against other individuals or entities who might attempt to sell the same product at a
more competitive price.
 02
TYPES OF DISTRIBUTION 
WHAT IS A DISTRIBUTION CHANNEL?

A distribution channel is the method that producers use to get

their products to consumers. The idea is to bridge the gap in the
most efficient and effective manner. Distribution channels
function whether the gap is a few miles or a few thousand miles.
Groups that utilize distribution channels are manufacturers of
products.
 DIRECT SELLING

 In a direct selling model, a company distributes products directly to

customers without using any intermediaries. 

 Direct selling is a good way to manage costs, especially when you

own a small business.
  It allows you to sell your product without having to pay for other
individuals to handle marketing, sales, or shipping needs. 
 They are fully in charge of all the marketing, packaging, and
shipping of their goods.  
 SELLING THROUGH
INTERMEDIARIES

 It is also known as an indirect channel of distribution.

 This is where a manufacturer utilizes wholesalers and retailers

to make their product available on the market. The
wholesalers and retailers purchase the product from the
producer and take on the risk if the product sells poorly.  
 DUAL DISTRIBUTION

 Dual distribution is where a manufacturer sells its

product directly to customers and indirectly through
third-party distributors and retailers.
 They use more than one distribution channel to reach
the end customer and it allows the product to 
reach a larger market. 
 REVERSE CHANNEL

The first three types of distribution channels discuss how the

manufacturer gets their product to the end customer. But, in
the reverse channel of distribution the direction changes. The
direction of the product runs from consumer to another
consumer or another company in a reverse flow channel.
  

A traditional distribution channel will look like this:

Company → Warehouse → Distributors → Dealers →
Consumers 
But, a reverse channel will look like this:
 
Consumer → Intermediary → Company 
 ADVANTAGE USING DISTRIBUTOR

 A distributor becomes the sales arm of your company for which you do

not have to pay. By using distribution, you are able to reach a mass
audience of retail outlets without having to invest any of your own
company money into developing and maintaining that business network .
 THANKS!
REPORTED BY: RICKYLA VIEN A. VIENTE

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