Top Distribution companies
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Frequently asked questions
What is the distribution company?
A distribution company is a business that buys large amounts of products from manufacturers. The company then sells those products directly to retailers, or sometimes to consumers and other businesses.
What do distributor companies do?
Distributor companies often help to connect retailers with product manufacturers. Distributors might specialize in working with certain types of products, like beauty products or healthcare supplies. They develop established lists of businesses interested in purchasing those products, and then they sell the products they’ve purchased to those businesses.
Distribution services play a key role in the supply chain. They give manufacturers an easy way to sell their products, while also making it simple for retailers to buy the products they need to keep their stores stocked.
What are the types of distribution?
There are seven types of distribution:
- Direct, selling to consumers through venues like e-commerce websites
- Indirect, selling from the manufacturer to a wholesaler or retailers
- Exclusive, offering limited sales, such as when dealing with high-end luxury brands
- Intensive, making as many sales as possible by working with big-box retailers or e-commerce sites like Amazon or The Home Depot
- Selective, selling certain products only within chosen retailers
- Dual, a combination of direct and selective methods to reach more customers
- Reverse, in which goods flow from a consumer to the distributor, such as in a refurbishing or recycling arrangement
What are the advantages of using a distribution company?
As a manufacturer, a distribution company can help you to easily sell your products without having to establish products with retailers. There’s no need to rely on your own marketing or social media to connect with buyers, so you can focus on your products.
As a retailer, a distributor can help you to source high-quality products at affordable prices. If a distribution is headquartered in a key location like Houston, Los Angeles, New York City, or even the United Kingdom or Dubai, your business could purchase world-class merchandise you couldn’t otherwise access. By buying in bulk, you can easily keep your business stocked for easier order fulfillment. Working with one or two specialized distribution companies also makes for easier ordering consolidation, so you don’t have to worry about balancing orders with multiple wholesalers.
How does a distributor make money?
Distributors can’t add on large mark-ups to products, since retailers need to resell those products. Instead, distributors rely on buying and selling in bulk to make profits. By buying in bulk, distributors can get the lowest possible price for the goods. When they resell them in bulk out of their distribution centers, even a slight markup on each product amounts to larger profits.