The difference between distribution and agency

The difference between distribution and agency. Many people will choose agency products. Both distribution and agency are a development trend of the market economy. The purpose is to sell products. Let’s take a look at the difference between distribution and agency. The difference between distribution and agency 1

The difference between agency and distribution:

1. Distributors generally do not hold goods in hand, but only purchase goods from manufacturers to sell them when there is demand; Agents have greater supply power.

2. Agents do not own the goods and earn commissions directly; distributors have a large amount of funds and can withstand long-term occupation. Agency is to handle business on behalf of a company. It does not buy out the company's products, but is a business behavior in which the manufacturer gives a quota. The ownership of the goods belongs to the manufacturer, not the merchant. They also do not use the products themselves, but resell them on behalf of companies.

Distribution is divided into sales. During the sales process, the situation of the next seller has been taken into consideration. It is not a blind sale, but a planned sale. The merchant has a service terminal. concept. Distribution and wholesale are relative and define merchants from the perspective of management and planning.

The difference between agency and distribution: agency provides services to product companies and collects commissions from the company, and the risks borne by agents are small; distribution means that companies sell products to distributors, and distributors resell them to customers. The price difference of the product is collected from it.

Difference is a Chinese word that means distinction or distinction; difference refers to the difference between two or more things; and when two similar things are compared, their differences That's the difference. The difference between distribution and agency 2

Difference:

1. Their profit models are different. Agents provide services to product companies and then collect commissions from the companies. Distribution Businesses are not. They make profits by charging the price difference of the product. That is, the company sells the product to the distributor, and then the distributor sells it to the customer and collects the price difference.

2. In addition, the risk of agents is not high. Agents only provide certain services, so there is no risk. However, distributors will have certain product risks.

3. Another thing is that the agent does not own the product, but the distributor owns the product because the distributor purchased the product from the original manufacturer.

4. Finally, in general, the relationship between distributors and manufacturers is long-term cooperation, the relationship is relatively stable, and online sales and offline sales are basically perfected, but agents are not.

Management

1. Establish a comprehensive communication system platform between the headquarters, dealers and franchise stores to maintain timely contact between the two , to facilitate business exchanges between both parties. For example, Renxin Bank's internal Tiantong system can release product and business information in a timely and accurate manner and share it with 500,000 agents in a timely manner.

2. The company headquarters must maintain its strong position and cannot allow the dealers and franchise stores below to easily break away or set up their own businesses. Always establish that the company headquarters is the legal owner of the business model, and all brand intellectual property rights, such as trademarks, patents, packaging designs, etc., belong to the company headquarters.

3. Dealers and franchise stores sign a responsibility letter with the headquarters to stipulate the responsibilities and obligations between the two, and both parties shall exercise their responsibilities and obligations in accordance with the regulations.

4. Dealers and franchise stores must act in accordance with the rules and regulations of the headquarters and cannot have their own set of rules and regulations. The headquarters should communicate with it in a timely manner so that dealers and franchise stores maintain the same service standards and price system as the headquarters.

5. Dealers and franchise stores are required to have consistent decoration and uniform signs inside and outside the store, and random replacement is not allowed. The difference between distribution and agency 3

Distributors: That is to say, those who specialize in purchasing goods from manufacturers or selling them to purchasers or stores, thus gradually forming a distribution business model. The distribution business model is not restricted. It can distribute products to multiple manufacturers without conflict. Distributors have to use their own money to buy the products they want to sell, and then bear all risks and benefits themselves. .

Agent: In short, it is the so-called product agent. The business activities in this business model are entrusted or independent agents, and the relevant companies or companies that facilitate the transaction The manufacturer will give corresponding commissions to the agents, and the products sold belong to the main suppliers,

That is, the largest manufacturer. Agents can be shops or individuals. There are no limitations. The main thing is to earn commissions, and all sales activities will have restrictions. The emergence of agents can successfully share the operating risks of manufacturers or the largest merchants, thereby reducing risks.

Distributors generally sell many products and will not only provide one type, nor will they cooperate with only one organization; agents can act as agents for multiple products or only one type. . A distributor is more like a transfer station where goods are purchased; and an agent is a sales machine or individual under the jurisdiction of a manufacturer or enterprise.

From the above, it can be seen that the two business models are quite different and cannot be confused. Some people who want to do business can also consider doing one of the above. For businessmen of different business models, there is a certain connection between the two, but the difference is even greater. Only by deciding which business model is more suitable for your own resources and abilities can you succeed faster and better!

1. For suppliers,

they do not need to spend effort on sales and can concentrate on producing products, eliminating the need for manufacturers to be busy producing and selling. The dual pressure will be more reasonable in the allocation of human, material and financial costs.

2. For channel merchants

There is no pressure to purchase or store goods, and there is no need to spend the cost of goods. Orders are given directly to the manufacturer, and the manufacturer is responsible for shipping, eliminating the need for reduce the risk of stockpiling. And you don’t need to spend too much money. As long as the channel provider has a market, it means zero cost in exchange for high profits.

3. For consumers

The more channels a channel provider has, the larger the market, and the more consumers it will come into contact with, which means there are more and more consumers. More consumers make it more convenient to buy things, which is a good thing for consumers.

Advantages of the agency model

First, there is no need to invest in the costs of product production;

Second, it is easy to form a partnership with other agents The scale effect enables manufacturers to reduce operating costs, which is directly reflected in lower product prices;

Third, market risks are reduced;

Fourth, enjoy the various resources of manufacturers.

What are the benefits of distribution? What is the difference between a distributor and an agent?

1. Different definitions: Distribution generally refers to an agreement between a dealer and a manufacturer or supplier to purchase and sell designated goods within a specified period and region. In a distribution situation, there is a buying and selling relationship between suppliers and dealers. An agent refers to an agent who is authorized by the agent or principal to "agency to sell goods" and acts on behalf of the principal to collect orders, sell and handle goods within the scope of the sales agent's authority.

2. Different relationships: The two parties of the agency are an agency relationship, while the two parties of the distributor are a buyer-seller relationship.

3. Sales are different: The agent sells in the name of the client, that is, the manufacturer, and signs a sales contract, while the dealer engages in sales in his own name.

4. Different sources of income: The agent’s income is commission income, while the dealer’s income is the price difference income from the purchase and sale of goods.

5. The ways of obtaining profits are different: dealers sell at a higher price to obtain operating profits, while agents earn commissions by selling at specified prices, which is the so-called commission.

6. Different operating authority: dealers can operate many varieties and even competitive brands; while agents operate fewer categories and generally do not operate competitive brands.