A dealer is a business that buys products to resell in the course of its business—placing the products in inventory and selling them in a retail store or online in e-commerce. A dealer is a middleman between the distributor and the customer and is an authorized seller of the manufacturer's products in a particular geographic area—sometimes nationwide.
A dealer may sell competing products from different manufacturers or brands, or may be restricted by its dealer agreement with the manufacturer.
Distributors
A distributor has the exclusive right to distribute products in a certain geographic area. A distributor is usually selected by the product manufacturer to sell the product for the manufacturer to dealers in a certain geographic area.
Dealer and Distributor Agreements
The terms under which a dealer or distributor may sell the manufacturer’s products are usually governed by a written contract that may provide for minimum advertised pricing (MAP) and other important terms.
In Colorado, dealer and distributor relationships with manufacturers are typically governed by contracts known as dealer or distributor agreements. These agreements outline the terms and conditions under which dealers and distributors may sell the manufacturer's products, including provisions for minimum advertised pricing (MAP), territorial rights, and exclusivity clauses. Dealers act as intermediaries between manufacturers and customers, often stocking and reselling products in a retail or online setting. They may carry products from multiple manufacturers, unless their dealer agreement imposes restrictions. Distributors, on the other hand, are granted the exclusive right to distribute a manufacturer's products within a specified geographic area. These agreements are subject to general contract law principles under Colorado law, and may also be influenced by specific statutes that govern business practices, such as the Colorado Antitrust Act of 1992, which could impact distribution and pricing strategies. It's important for dealers and distributors to ensure that their agreements comply with both state and federal laws, including antitrust regulations, to avoid legal disputes.