Before we dig into the difference between wholesaler and distributor, it may be helpful to understand what a supply chain consists of? A supply chain is a system of organisations, people, activities, information, and resources involved in moving a product or service from supplier to customer. It's comprised of:
- Vendors that supply raw material, producers who convert the material into products, warehouses that store,
- Distribution centres that deliver to the retailers, and
- Retailers who bring the product to the ultimate user
- The order or hierarchy to the supply chain system is made up of:
Manufacturers –> Distributors –> Wholesalers –> Retailers –> Consumers
What is a Distributor?
The distributors are the ones in contact with the manufacturers. Distributors play a vital part in keeping the lines between manufacturers and users operating smoothly. They can expedite response times, enhance a company's reach and even create value-added packages. Distribution businesses can buy from manufacturers and sell to retailers, or directly to consumers and/or businesses. Distributors such as Matumi Distributors, provide further support to manufacturers by offering solutions to logistics and storage.
In our fast-paced, demand-driven business world, it is crucial that businesses are able to respond to customers quickly and in real time. If a customer can't find what they need with one source, they will quickly look for a replacement or some other company who can provide what they need. Because they are more localised, distributors can typically offer a faster response to meet customers' needs.
Distributors do not only offer benefits to manufacturers-they can also be a boon for users. Because distributors represent multiple products and companies, they can bundle them together. As a result, the buying process is streamlined, and costs can decrease.
Distributors also have the benefit of reducing inventory and service burdens for both the manufacturer and the user. They provide aftermarket services, cost reduction and process optimization strategies, as well as inventory management. Distributors create value by providing total solutions for their customers.
What Does Wholesale Mean?
A wholesaler sells their product in bulk quantities to retailers, allowing the retailer to take advantage of a lower price than if they were to buy single items. The wholesaler will typically buy goods directly from the manufacturer but could also buy from a reseller. In either case, the wholesaler gets large discounts for buying large quantities of goods. The wholesaler is rarely involved in the actual manufacturing of a product, focusing instead on distribution.
Wholesaler vs. Distributor:
A distributor works closely with a manufacturer in order to sell more goods and gain better visibility on these goods. Distributors identify wholesalers who will resell their products. A wholesaler works more closely with retailers to match their needs through buying products in bulk at a discount.
The primary goal of the wholesaler is to satisfy the needs of the retailers. They are not responsible for having the products sold to the customers or whether the retailers would sell them all. They have the advantage of being able to adjust their products to whatever the retailers need. A wholesaler only fulfils orders from retailers and assumes no role other than satisfying retailer demands.
A distributor, on the other hand, in addition to executing passively received orders, acts as a sales representative for the producer. A distributor actively looks out for orders from various sources in the market, executes the orders and also manages returns. A distributor is actively involved in promoting a company’s products a wholesaler is not.
Companies usually incorporate a vendor management system to track the variety of wholesalers and distributors a company uses. Vendor management systems have many benefits like tracking and managing the onboarding of new vendors, maximising productivity and increasing efficiency. Your company’s suppliers are critical to your success and in many cases are at the centre of your organisation’s processes and activities. That’s why it is so important to effectively manage your relationships with them.
Visit Matumi Distributors to learn more about how we distribute quality foods and long-lasting supplies to remote hotels & lodges in Mpumalanga and Limpopo.