“Wholesaler” and “distributor” are frequently used in FMCG and industrial supply businesses. Sometimes, even experienced business professionals use both terms interchangeably. From retailer and manufacturer to business owner and entrepreneur, it is important to understand the difference between a wholesaler and a distributor because these terms are not exactly the same. If you’re in any of these professions and want clarity, here are the key differences between a distributor and a wholesaler. Let’s get started!

Introduction to a Wholesaler and a Distributor

What is a Wholesaler?

A wholesaler is an intermediary in supply chain management who obtains products, such as online shops, local retailers, supermarkets, and others, in bulk from distributors and sells them to retailers. Wholesaler companies neither procure products directly from manufacturers nor sell them to end consumers. They just act as a bridge to deliver the products of manufacturing companies to the end users. Their support makes the process fast and seamless and empowers retailers to store a large quantity of products at once. Wholesalers provide products like Nescafe, Nutella, Red Bull, Coca-Cola, Ferrero Rocher and others in bulk.

What is a Distributor?

A distributor is an entity or business body that purchases products and then sells them in bulk quantities to small and large wholesalers, local retailers, supermarkets, and others. They often offer discounts on buying products in large quantities. FMCG distributors have a better relationship with FMCG manufacturing companies, helping them obtain fresh and high-quality products and sell them to their customers.

Distributors not only provide products in bulk but also help with distribution and proper storage. They also market the products to the target audience through their digital marketing strategies. Treasure Orbit is a trusted FMCG distributor that offers a range of product categories, including beverages, snacks, confectionery, baby care, household items, personal care, dairy products, canned foods, and many others.

Wholesaler vs. Distributor Example

A FMCG company can connect with its distributor company to deliver and market its chocolate brands in a region. Small and large wholesalers connect with distributors to obtain these products in bulk. They resell these products in small quantities to local grocery stores. FMCG distributors also directly sell their products to small businesses like local shops, hotels, restaurants and others.

The Difference Between a Wholesaler and a Distributor

People often think wholesalers and distributors are the same because both help move products from manufacturers to stores. If you are having a hard time understanding the difference, this is a common mistake most people make, as both sell products in bulk and deal with retailers. Here are some key points to differentiate between a wholesaler and a distributor. Let’s get started!

Operations

Wholesalers focus primarily on buying and selling goods in bulk. They have better relations with food distributors to get products in large quantities. However, depending on the specific marketing strategy and demand of the product, they sometimes tie up with manufacturers as well to earn profits.

FMCG Distributors primarily focus on providing their FMCG distribution services. They focus on the physical movement and delivery of products in both local and global markets. Their robust transportation team manage product transportation and delivery of their products. They handle the task of providing a wide range of products and keeping them in proper storage areas.

Agreements

Wholesalers rarely have an agreement with FMCG companies. They mainly get their range of products from food distributors and other sources in bulk quantities. That provides them the flexibility to sell their products freely in large brands.

FMCG distributors usually have a legal agreement with the FMCG company. They have partnerships with certain companies that allow them to sell their products in the market. They have to adhere to specific terms and conditions, such as brand, SKU, territory, margins, fees, promotions, training, etc.

Exclusivity

FMCG wholesalers may not have exclusive rights to sell the FMCG products from the manufacturers. They freely obtain products from various FMCG companies and sectors. These agencies deal with brands like Nestle, Unilever, P&G, and LG to sell their products across various industries. They deal with product categories like food, beverages, electronics, cleaning, and personal care. 

FMCG distributors may have exclusive rights to sell FMCG products. Under an agreement with the manufacturer, the chocolate supplier delivers products in bulk and works only with the specific FMCG company it is partnered with. These distributor companies can work with one or even sell products from several companies, but in different regions. For example, Treasure Orbit is a top tea and coffee supplier that provides dozens of products from Nescafé in the UAE.

Management

FMCG wholesalers do not work closely with FMCG companies. So they do not require much management from them. FMCG distributor work independently or with minimal supervision. They receive their orders in bulk from FMCG distributors and resell them in smaller quantities.

FMCG distributors require specific management from the FMCG company. They may have to follow certain strategies under the supervision of FMCG companies. The team of beverage distributors is skilled in distributor assessment. They have to go through various stages like selection, training, reporting, goal setting, incentives, etc.

Brand Range & SKUs

FMCG wholesalers earn money mainly by purchasing products at low prices in bulk and selling them at higher prices to retailers. They make their benefits mainly from the difference in the price of the goods they trade.

FMCG distributors earn money through margins, sales volume, or delivery tasks. They often work closely with the company and get paid for selling more products or handling storage and transport. Connecting with the best snacks distributor benefits small retailers like local shops and online stores to get discounts on various products when purchasing in large quantities.

Final Words

Both wholesalers and distributors play a vital role in maintaining a constant supply of FMCG products in the market. They work closely together and make the entire process of distribution smooth and efficient. With their great support, your product reaches you safely, adhering to both local and global standards. However, not every supply chain needs both a wholesaler and a distributor. FMCG distributors get the products directly from FMCG companies and fulfil their demand without any third-party interruption. Small and large wholesalers connect with the best FMCG supplier to get their products.