The difference between distribution and agency
Many people will choose agency products. Both distribution and agency are a development trend of market economy, with the aim of selling products. Let's take a look at the difference between distribution and agency. The difference between distribution and agency 1
The difference between agency and distribution:
1. Distributors generally don't press the goods in their hands, and only when there is demand can they buy goods from manufacturers to sell them; Agents have greater supply power.
2. The agent does not own the ownership of the goods, and the agent directly earns the commission; Distributors have a lot of money and can withstand long-term occupation. Agency is to take care of the business on behalf of the enterprise, not to buy out the products of the enterprise, but to give a quota to the manufacturer. The ownership of the goods belongs to the manufacturer, not the merchant. They also do not use their own products, but sell them on behalf of enterprises.
Distribution is divided into sales. In the process of sales, the situation of the next family has been considered. It is not blind sales, but planned sales. Merchants have the concept of service terminals. Distribution and wholesale are relative, and they are the definition of merchants from the perspective of management and planning.
The difference between agency and distribution: the agency provides services to the product enterprises, from which the commission of the enterprises is collected, and the risks undertaken by the agency are small; Distribution means that an enterprise sells its products to distribution, and then resells them to customers, from which it collects the price difference of the products.
Difference is a Chinese word, which means to distinguish and distinguish. Difference refers to the difference between two or more things; And when two similar things are compared, their difference is the difference. Difference between distribution and agency 2
Difference:
1. Their profit models are different. Agents provide services to product enterprises and then collect commissions from them, while distributors do not. Their profit is to collect the price difference of products, that is, enterprises sell products to distributors, and then distributors sell them to customers and collect the price difference from them.
2. In addition, the risk of the agent is not high. The agent only provides certain services, so there is no risk. However, the distributor will have certain product risks.
3. In addition, the agent will not own the product, but the distributor owns the product because the distributor bought the product from the original factory.
4. Finally, in general, the relationship between distributors and manufacturers is long-term and stable, which basically improves online sales and offline sales, but agents are not.
Management
1. Establish a comprehensive communication system platform between the headquarters, dealers and franchisees, and keep in touch with them in time to facilitate business exchanges between the two parties. For example, Ren Woxing's internal Tiantong system can timely and accurately release product business information and share it with 5, agents in time.
2. The headquarters of the company should maintain its strong position, and the following dealers and franchisees should not be easily separated or set up their own businesses. Always establish that the company headquarters is the legal owner of the business model, and the brand intellectual property rights, such as trademarks, patents and packaging design, all belong to the company headquarters.
3. Distributors and franchisees sign letters of responsibility with the headquarters, stipulating the responsibilities and obligations between them, and both of them exercise their responsibilities and obligations according to regulations.
4. Distributors and franchisees must act in accordance with the rules and regulations of the headquarters, and cannot set their own rules and regulations separately. Headquarters should communicate with them in a timely manner, so that dealers and franchisees can maintain the same service standards and price system as headquarters.
5. Dealers and franchisees are required to have consistent decoration and uniform signs inside and outside the store, and are not allowed to change them at will. The difference between distribution and agency 3
Distributor: that is to say, those who specialize in purchasing goods from manufacturers or selling them to buyers or storefronts, thus gradually forming a distribution business model. The distribution business model will not be constrained, but it can distribute products for multiple manufacturers without conflict. Distributors just want to use their own money to buy the products they want to sell, and then bear all the risks and benefits themselves.
agent: in short, it is the so-called product agent. In this business model, the business behavior is entrusted or self-represented, which leads to the transaction. The relevant enterprises or manufacturers will give the corresponding commission to the agent, and the products sold belong to the main supplier, which is
the largest manufacturer. An agent can be a shop or an individual, and there is no limit. The main thing is to earn a commission, that is, a commission, and all sales activities will be limited. The emergence of agents can successfully share the business risks of manufacturers or the largest businesses, thus reducing the risks.
Generally, distributors sell many products, and will not only provide one product, nor will they only cooperate with one organization; And agents, that is, they can act as agents for a variety of products, or they can only act as agents for one kind. Distributor is more like a transit point where goods are purchased; ; An agent is a sales machine or individual under the jurisdiction of a manufacturer or enterprise.
From the above, we can see that the two business models are quite different and cannot be confused. Some people who want to do business can also consider being businessmen of the above business models. There is a certain connection between them, but the difference is even greater. Only by looking at which business model their resources and abilities are more suitable can they succeed faster and better!
1. For suppliers,
they don't need to spend their own efforts to make sales, just concentrate on the production of products, which saves the double pressure of manufacturers being busy with production and sales, and will be more reasonable in the allocation of human, material and financial costs.
2. For channel dealers,
there is no pressure to purchase and stock up, and there is no need to spend the cost of goods. Orders are sent directly to the manufacturers, who are responsible for the delivery, thus eliminating the risk of stock up. And don't need to spend too much money, as long as there is a market for channel providers, it is equal to zero cost for high profits.
3. For consumers,
The more channels there are, the bigger the representative market will be, and the more consumers will be contacted, which means that it is more convenient for more and more consumers to buy things, which is a good thing for consumers.
Advantages of the agency model
First, there is no need to invest in the various expenses of the product in the production process;
second, it is easy to form scale effect with other agents, which makes manufacturers reduce operating costs, which is directly reflected in reducing product prices;
thirdly, the market risk is reduced;
fourth, enjoy all kinds of resources from manufacturers.
what are the benefits of distribution? What is the difference between a distributor and an agent?
1. Different definitions: Generally speaking, distribution means that dealers reach an agreement with manufacturers or suppliers to buy and sell designated goods within a specified time limit and territory. In the case of distribution, there is a buying and selling relationship between suppliers and distributors. Agent refers to the "power of agency to sell goods" granted by the principal or the principal, and the agent collects orders, sells and acts as an agent within the authority of the sales agent.
2. the relationship is different: the two sides of the agent are an agency relationship, while the two sides of the distributor are a buying and selling relationship.
3. Sales are different: the agent sells in the name of the principal, that is, the manufacturer, and signs a sales contract, while the dealer sells in his own name.
4. Different sources of income: the income of agents is commission income, while the income of dealers is the price difference income of commodity trading.
5. There are different ways to obtain profits: dealers sell at a higher price, thus obtaining operating profits, while agents sell at a prescribed price to earn commissions, which is called commission.
6. Different operating authority: dealers can operate multiple varieties, even competing brands; However, agents operate fewer categories and generally do not operate competitive brands.