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 them sell goods made by manufacturers and neither is directly employed. 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 typical distributor is buying goods directly from the manufacturer at a wholesale price and then, reselling it either to 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. It is when how distributors are making profit from their markup or the difference between what it pays to the manufacturer for the goods and to what’s 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. Basically, these sales agents or representatives are hired for circumstances when there is lack of sales force for manufacturers, when there’s new market the company wish to penetrate, whenever there’s a new product that needs to be introduced in the market and lastly, when it is more cost efficient for the company to get outsource than using their own 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.
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.
In reality, working with manufacturer’s representative agency have great use. 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.