Distributor definition

A distributor is an intermediary organization in a distribution channel. It buys and warehouses goods from multiple suppliers and resells them to retailers. A distributor provides a number of services that can make it attractive to both suppliers and retailers, which include the following:

  • Buys in bulk from the supplier, which no longer has to sell in small quantities

  • Absorbs credit risk, so that it sustains losses from retailer bad debts, rather than the supplier

  • Provides a ready mix of products to retailers on short notice, who might otherwise have to order from a large number of suppliers

  • Provides after-sales service and technical support to customers.