Most manufacturers that make products that need to be transported will need distributors. Distributors usually transport the goods of various different manufacturers or suppliers from one location to another. They may use trucks, trains, ships, planes, or other modes of transport in order to carry goods between different locations. They may either make money by charging the manufacturer a fixed fee for the service performed, or they may make a profit by buying the goods from the manufacturer and selling them to the reseller or end-user.
In order to make a profit, the distributor usually buys from the manufacturer at a low price and then sells portions of the goods to a number of buyers at a higher price. The difference between how much a distributor pays for goods and how much a distributor charges for goods is commonly referred to as the markup. As a result, when distributors are employed, it usually results in adding to the price that the consumer ends up paying.
The markup varies depending on industry, product, demand, competition, and quantity of goods. A distributor may offer different pricing to different customers. A distributor may offer lower pricing to a customer who buys in bulk. Sometimes, a distributor may also be referred to as a wholesale distributor. Distributors are usually specialized by industry and by location. Depending on the industry covered, they may need specific types of transport facilities. Regardless of size and specialization, the distributor plays a very crucial role in the world of business.