Difference Between Manufacturer’s Representative Agent and Distributor
It may be hard to believe but manufacturers representative agency and distributors are offering almost the same service. Both of the said entities are selling products made by manufacturers and neither of them is employed directly by the 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.
A common distributor buys good straight from the manufacturer at a wholesale price and reselling them either to the consumers or retail outlets. Actually, distributors are taking ownership of products they are selling and they are maintaining 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.
As a matter of fact, manufacturers representative agency is used most often. 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 possibility of making sales is unjustifiable to the cost of utilizing sales force of the company or it could be that the company is thinking of others ways on how they can diminish fixed cost risks of their internal sales force.
Aside from those mentioned benefits, some inc. companies and corporations are taking advantage of such service when a retail buyer needs dedicated sales as well as marketing support from the manufacturer.
In reality, working with manufacturer’s representative agency have great use. They are the one who can guarantee that everything’s properly set from beginning to end while establishing brand and awareness for the company they work for. Working with such can be a sensible move if you want to experience success.