‘Manufacturer Representative’ & ‘Manufacturer Distributor’ are terms that we come across in economics. These are the entities involved in the buying & selling processes of goods of companies. Though the two appear to have a lot in common, they differ in more ways than one. Each has a different role to play in the life cycle of a business. We will first try to understand their respective functions through definitions & examples, & then see how they differ from each other by going through a well-analyzed comparison chart.
A Manufacturer’s Representative also called an ‘Independent Sales Representative’ or a ‘Sales Agent’ or a ‘Sales Broker’ is a company or sales agency or even independent contractors that act as the representative for a company & sell its goods & services to wholesale & retail customers. Representatives are like business partners on whom the businesses are directly dependent.
Example- Pharmaceutical companies employ sales representatives to show & sell samples of their medicines to physicians.
A distributor is a wholesale customer who buys goods from a company in bulk, & sells them to sub-distributors or retail customers.
Example- Film distributors such as Sony Pictures, 20th Century Fox, Universal Pictures & Walt Disney Studios Motion Pictures. A film distribution company buys movies & sells them for theatrical viewing, online downloading/viewing or as DVDs & CDs according to the contract made with the production company.
Representative Vs Distributor
Both, representatives & distributors are third parties to a company that seem to perform the same function of selling goods of a company to customers. So how exactly do they differ from each other? The major difference between the two lies in their accountability to the company they represent or buy from.
A company’s sales representative is highly accountable to the company. The entire responsibility of the marketing process, starting from finding customers, explaining the products, negotiating costs, scheduling & discussing the delivery methods to rendering the company’s goods & services lies in the hands of the representative. On the other hand, a distributor doesn’t hold any accountability to the company he buys from; rather, the company is accountable to the distributor for the quality of the products they sell.
In other words, a representative is like a business partner & a distributor is like a customer.
Other & minor differences between a manufacturer’s representative & manufacturer’s distributor are tabulated below:
|Manufacturer Representative||Manufacturer Distributor|
|1) A manufacturer’s representative is paid by companies in the form of commissions, which depends upon the number of successful sales.||1) A manufacturer’s distributor makes money by selling goods to customers.|
|2) A representative keeps with him a small sample collection of goods his company sells, to show or demonstrate to the customers.||2) A distributor buys goods from companies in large amounts to sell.|
|3) A representative takes care of marketing products of the company he acts as a mediator to.||3) A distributor, along with marketing products bought for his own business, also takes care of their transportation & storage.|
|4) A representative is a major part of a company & the two are directly dependent on each other.||4) A distributor is not a part of a company, & the two are indirectly dependent on each other.|
|5) A representative doesn’t buy goods from a company; rather, he offers & sells goods & services on the company’s behalf to customers.||5) A distributor buys products from companies & sells them to customers.|
|6) Sales representatives don’t employ distributors.||6) Distributors employ in-house sales representatives.|
|7) Representatives are posted to specific geographical locations based on the number of potential customers.||7) Goods are sold to interested distributors from any geographical location.|
|8) Representatives have in-depth knowledge of products & are trained to demonstrate the working products.||8) Distributors also know each and everything of the products they sell.|
|9) Representatives mostly look for potential customers.||9) In most cases, customers approach distributors.|
|10) Educational qualifications along with soft skills are necessary to get hired as a sales representative.||10) A distributor is not expected to fulfill any educational requirements to buy & sell goods.|
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