distributor – n : a) a company that specializes in distributing other companies’ products – i.e., has contractual relationships with one or more vendors (producers of the original products) under which the distributor has certain rights, responsibilities and restrictions related to marketing and selling the vendors’ products to the ultimate end-users. b) In some industries that have multi-tier distribution systems – e.g., the steel industry, as well as many retail sectors – the term distributor is alternatively used to describe a company that serves an intermediary role between a products’ original producers and the companies that actually sell to end-users; these intermediaries typically purchase products from multiple vendors, provide warehousing and transport to the retailers.

Examples:

a) When American producers of software decide to market their products internationally, they need to choose, for each foreign country they choose to enter, whether to set up company offices (“go direct”) or, alternatively, to sign up a distributor to represent their products in that country. Going direct has the advantage of enabling the vendor to retain all enduser revenue (no need to pay distributor commissions). On the other hand, going through a distributor in a foreign country may offer the benefit of faster time-to-market, established customer relationships, and working with a partner familiar with local language and business customs.

b) Book publishers typically do not sell their products directly to bookstores; rather, they sell to distributors whose intermediary role is to purchase, warehouse and ship multiple publishers’ titles to independent retailers and chain bookstores.

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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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