Supplier vs distributor: the difference for retail buyers

An independent shop buys from makers, distributors, wholesalers, importers and reps who take orders for a brand. Each label hints at the minimums, prices, delivery times and help you can expect, and at who to call when a delivery arrives short.

Supplier is the umbrella word

A supplier is any company you buy stock from. The narrower names describe how goods reach you:

• Manufacturer. Makes the product, and may or may not sell to shops directly.
• Distributor. Buys from many brands, holds the stock and resells it to shops.
• Wholesaler. Buys in bulk and sells to businesses rather than the public.
• Importer. Brings goods in from abroad and sells them on, often as the brand's distributor for the country.
• Sales rep or agent. Takes orders for brands on commission; the maker or distributor ships and invoices.

Many buyers say vendor instead, so the supplier vs vendor question rarely changes an order. The terms overlap: one company can make its own range and distribute other brands.

What is a distributor?

The Census Bureau's wholesale trade definitions describe a distributor as a wholesaler that buys and owns products before reselling them. A wholesaler sells to retailers and other businesses rather than the general public. Agents and brokers negotiate sales for others for a commission or fee, without taking possession of or title to the goods.

Wholesaler vs distributor

By those definitions every distributor is a wholesaler. In trade talk, a distributor usually has agreements with its brands, sometimes regional. A wholesaler often resells many makers' goods in smaller lots with little service, so ask what a company offers rather than relying on its name.

Manufacturer vs distributor

The maker sets the range and the price list. A distributor adds nearby stock, mixed orders and often credit terms, and charges more for them.

Distributor vs supplier at a glance

These are typical patterns, not rules.

When buying direct from the manufacturer makes sense

• You sell enough to meet its minimums without overstocking, so the lower price adds up.
• You want the full range, new lines first or an exclusive for your area.
• The maker is small or local and has no distributor.

When a distributor or wholesaler is the better route

• You want small quantities of many brands on one delivery and invoice.
• The brand refers small shops to a distributor.
• You need credit terms or faster delivery.
• You are testing a product and want a small first order.

Consignment is a third option with local makers: you pay only after an item sells.

How to find the distributor of a product

Start with the brand: its website may list wholesale contacts, or email to ask who supplies independent shops near you. To identify a company you already buy from, ask:

1. Do you make this product or buy it from the maker?
2. Do you own the stock you ship?
3. Whose name is on the invoice?
4. Who handles returns and damaged goods?

If a rep takes the order but the maker sends the invoice, you are buying direct through an agent.

Questions to ask a new supplier

• Minimums. The opening and reorder minimums and the case pack. The MOQ planner shows how many weeks of stock a minimum adds.
• Price list and price breaks. The quantities where prices drop, any suggested retail price and notice of increases.
• Payment terms. Prepayment, card or credit, and what the credit application asks for.
• Lead times and delivery charges. Order-to-delivery time, the free delivery threshold and backorders. Longer lead times raise your reorder point.
• Returns and damages. How and when to report short or damaged deliveries, and what credit you get.
• Territory or exclusivity. Whether nearby shops can buy the same line.
• Paperwork. What opens the account, such as a business license or a resale certificate.

The supplier comparison scorecard weighs two suppliers' answers side by side.

Do I need a resale certificate to buy wholesale?

Some suppliers ask for one before opening an account, and you usually need one to buy stock for resale without paying sales tax. California's Publication 103 says a business that sells goods may issue a resale certificate when buying items it will resell. A seller who accepts a valid certificate in good faith does not owe tax on that sale. The certificate is not for goods you will use rather than sell. Rules and forms vary by state, so check with your state's tax agency or an accountant. This is general information, not tax advice.

A worked example: maker minimum or distributor price

A fictional gift shop wants to stock a US$20.00 candle and expects to sell about four a week.

List prices differ by US$1.50, but landed costs differ by US$0.50 once delivery is added. That is US$11.00 against US$10.50 of gross profit per candle, so 48 candles bought from the maker earn US$24.00 more. In exchange, the shop pays US$432.00 up front for about 12 weeks of stock, against US$114.00 for three weeks, paid 30 days later. It starts with the distributor and moves to the maker once two reorders confirm the pace. The landed cost calculator spreads freight across a delivery with several products.

Where Headoffis fits

Headoffis keeps a Suppliers directory for each business, with contact details and notes. From Inventory you can raise a purchase order to a listed supplier, mark it as sent and receive the delivery in full or in part, which updates stock. Headoffis does not email orders, compare prices or link products to suppliers, so record which lines come from whom in each supplier's notes. See the supplier and customer help and the supplier list guide.

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