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.
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.