Sales Representatives Or Distributors - Which Way To Go?

By Author: Kate DiGiacomo
Total Articles: 7
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Understanding the differences between sales representatives and distributors will allow you to make the right choice in order to help your business grow.

Whether you’re part of a start-up, a multi-national company, or anything in between, using sales agents is a great way to help your business grow and increase sales. However, not all sales agents are the same. Sales agents can be broken down into two main types - sales representatives and distributors. Essentially, sales representatives work on behalf of companies and facilitate the sales of their products or services to their clients. They are typically paid by companies through commission, a retainer, a salary, or a combination of these options. Distributors, on the other hand, operate primarily on a buy/resell basis. They will typically buy large quantities of a product and then resell to their buyers for a profit.

At times there may be an overlap between the functions of sales representatives and distributors. Sometimes, sales reps may work on a buy/resell basis. And sometimes distributors may work for commission or a retainer. Just like business owners ...
... sometimes wear multiple hats, sales agents and distributors may perform different roles for different companies, depending on the situation. The exact way a sales agent operates depends entirely on the agreement between the agent and the company he or she works with.

Distributors often own warehouses or storage facilities. This allows them to buy large quantities of a product at one time, store it for a period of time, and sell it as opportunities arise. As a business owner, you can take advantage of this by encouraging them to purchase products in bulk, typically through offering a volume discount. Because of their ability to buy in bulk and warehouse goods, they have the potential to make a substantial profit.

The use of a distributor is more appropriate for certain types of industries and businesses than others. If your business offers a service, you have nothing to distribute and it would be wiser to use sales representatives. Businesses that produce perishable goods or items that are not easily stored tend to be more successful with sales representatives, or with specialized distributors that cater to their industry.

For many manufacturers, using a distributor instead of a sales representative is an advantage because it may reduce time in the sales cycle. Instead of negotiating terms with a sales rep and then waiting for them to find a buyer, negotiate, and eventually finalize the sale, manufacturers can quickly turn a profit by selling directly to distributors.

Some manufacturers may decide to use a mix of both sales representatives and distributors. The decision of which type of sales agent to use depends entirely on the nature of your business, your current financial situation, and your company’s growth strategy.

SalesAgentUSA.com is a leading web portal that helps companies find qualified, interested sales representatives & distributors to grow their business and expand into new markets. We also assist sales agents with finding new product lines and opportunities. Please visit www.SalesAgentUSA.com for more information about how we can help bring your business to the next level.