PL Global Impex
What Is A Distribution Company

What Is A Distribution Company

Distribution Companies


Manufacturers create things, and merchants sell them, but most businesses do not buy directly from manufacturers. Only major firms or businesses that deal in specialized items are likely to deal directly with producers. Distributors provide items to a big percentage of the market. These are firms that operate as manufacturers’ reps. Distribution companies look for businesses that want to offer a certain product and then sell the items straight from the producers. A distributor’s job is to supply businesses with the kind and quality of products they wish to sell.


Distributors, sometimes known as stockists, are individuals who have a business relationship with a manufacturer, acquire items, store them, and then resell them through a distribution channel. Moving items is one of a distributor’s most important tasks. The proper distributor increases a company’s product market exposure and provides a competitive advantage in terms of speed and efficiency.


The Channel of distribution is the flow of commerce between the manufacturer and the consumer. They assist to cover a large geographical region while also increasing distribution efficiency. Retailers and wholesalers are the most frequent distribution channels.


How Do Distribution Companies Work?


When it comes to providing items to end customers, a producer has two options: selling direct or employing distribution. The benefit of distribution is that it allows the producer to concentrate on its main business of creating items while the distributor handles the sales.


What Is A Distribution Company


Levels Of Distribution


Distribution channels have four levels:


  • Level Zero: This is the direct distribution route. Items are sold directly from the manufacturer to the customer.


  • Level One: This is an indirect route where a middleman separates the manufacturer and the client. This is either delivered straight to a retailer, who will then sell the items to a client, or shipping to a wholesaler, who will then sell the goods to the customer.


  • Level Two: This is likewise an indirect channel, as there are two middlemen between the producer and the client. As a result, the manufacturer sells to a wholesaler, who then sells to a retailer. The consumer would then be able to purchase the products from the store.


  • Level Three: The third level is similar to level two. But the difference is that between the store and the consumer is an agent who negotiates a contract.


The level zero distribution route takes the least amount of time. This is because the product is delivered straight from the producer to the client. But the level three distribution channel would take the greatest time because it contains the most stages.


The wholesaler has to achieve a Gross Profit Margin of 10 to 15% in order for a product distribution firm to accomplish the task it undertakes. Although distributors profit by serving smaller clients, the greatest method to increase profits is to sell in large quantities in each individual order. PL Global Impex Pvt. Ltd. is a well-known brand in this industry. It makes commodity trading and investing easier for all of its clients.


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