Who is a distributor. How a distribution network is built

Came to us relatively recently from in English the term "distributor" has already become familiar. This is the name of an entrepreneur who buys large quantities of goods directly from their manufacturer, and then resells them wholesale or retail.

It would seem that everything is quite simple. But the concept of distribution includes other activities that turn simple seller to a distributor.

Distribution in trade and its types

In English, the word "distribution" came from Latin, where distributio meant distribution.

Distribution in trade is the whole complex logistics processes accompanying the sale of goods. This is one of the main elements of the 4P strategy, or "marketing mix". In more narrow sense- the most efficient distribution of goods across the distribution network.

There are two views on distribution: from the point of view of the manufacturer (supplier) and the distributor itself. For the first, the process is to create a system of sales channels and manage them. For the second, distribution consists in distributing the product on its territory and eventually bringing it to the buyer. Both approaches are correct and complement each other.

Depending on which sign is taken as a basis, the following types of distribution can be distinguished:

1. Length of distribution channels

• short - one intermediary;
• long - a multi-level system of intermediary channels has been created.

1. Interaction of the distributor with buyers

• direct, that is, the goods are directly transferred to the buyer;
• indirect, through resale to other intermediaries.

1. Distribution type

• mass - all willing distributors can participate;
• selective - the manufacturer supplies goods only to intermediaries that meet certain criteria;
• exclusive - only one distributor in a certain territory or in a group of buyers.

1. Territory

• local (regional);
• national (one country);
• transnational (a group of countries in one geographical region).

Distributor company

A distributor can be a sole trader, but most often this role is played by legal entities- distribution companies. Their main function is to satisfy the needs of the buyer in the product that the supplier produces. At the same time, such a company can act on its own behalf, but most often it happens on behalf of the manufacturer and supplier.

An agreement is concluded between the distribution company and the manufacturer, according to which it becomes the representative of the supplier in the field of distribution of goods. In this case, the manufacturer determines the following parameters of cooperation:

• the price of the goods;
• the amount of markups to the wholesale price or discounts;
• the market, that is, the region or circle of buyers;
• terms of realization of the transferred goods;
• calculation procedure.

The income of the distribution company consists mainly of margins, which, under an agreement with the manufacturer, are set at wholesale price goods. Their value is usually flexible, that is, it depends on the timing of implementation, the volume of deliveries, the form of payment, etc. Distribution companies also cover their costs from the margins and discounts received.

How a distribution network is built

Each distribution company is independent of other intermediaries involved by the manufacturer. However, in order to increase the efficiency of their own activities and, accordingly, profits, such companies can unite, creating a distribution network. As a rule, a distribution network is a multi-level organization covering a large territory with its distribution channels.

The benefit of building a network is to increase the income of each participant. He receives funds not only for own sales, but also for the sales made by the distributors of the lower level attracted by him. It is on this principle that network marketing, which is so common today, is built.

To create an efficient distribution network, it is necessary to consistently perform a number of tasks that can be divided into three levels:

1. Strategic. First you need to decide on plans to increase sales and build a new or upgrade an existing network. Bottom line strategic planning should be the development of a network model and control scheme.
2. Tactical. At this level, a document management system and other management procedures, models of subnetworks of lower levels are created, planning systems, logistics, etc. are determined.
3. Operating. Planned warehouses are built, contracts are concluded with distributors and dealers, developed management and document management systems are introduced, etc.

To assess the effectiveness of distribution networks, the ratio between the achievable (desired) level of customer service and the amount of costs to achieve it is used. Obviously, the higher the first indicator and the lower the second, the more efficient the network operates, the more profit the distributors and the manufacturer of the goods will receive.

Who are distributors and what do they do?

At first glance, the distributor’s work scheme is quite simple:

• conclude an agreement with a supplier, the owner of a well-known brand;
• buy a batch of goods from him at a reduced price;
• implement it by your own efforts, setting the maximum margin;
• make a profit and invest it in expanding the distribution network.

But in reality, everything is far from being so simple. A distributor is an active intermediary between a producer and a buyer. His responsibilities include not only concluding contracts with the supplier of goods and buyers, but also the implementation of a whole range of marketing activities:

• studying the market and its trends;
• advertising of the product itself and its manufacturer;
• ensuring the necessary stock of goods in warehouses and retail outlets;
• pre-sales and after-sales service;
• maintenance of goods;
• setting a selling price, etc.

In addition, it is the responsibility of the distributor to create and continuously expand stable distribution channels and networks to cover the entire territory or segment. consumer market. All this makes the distributor not only dependent on the manufacturer of the goods, but also responsible for making a profit.

The distributor, in addition to liability, also bears the risks associated with damage or loss of the goods transferred to him.

Official

Any entrepreneur can buy and resell goods of a well-known manufacturer. But he does not acquire the right to be called a distributor. Although it can perform all its inherent functions, in particular, promote a product on an existing market, develop new ones, etc. The official nature of the relationship between the supplier and the distributor is fixed by the agreement concluded between them.

There may be several official distributors, for example, large companies. In this case, each of them represents a certain product segment or operates in a certain region. There is no competition between them, except perhaps a competition in sales volumes.

Getting the status of an official distributor is quite profitable. Depending on the terms of the contract, such a company has the opportunity to use the manufacturer's brand to increase sales, participate in joint promotions receive other support. The manufacturer, as an interested person, can promote the promotion of its distributors in the market.

How to become

Become an official distributor famous company quite difficult. To do this, you will need to have your own, albeit not so hyped, name and reputation, confirming the reliability as a partner. Not to mention the well-established and stable distribution channels through which the new product will be sold.

Before signing the desired distribution agreement, you will have to follow a series of steps in sequence. All of them can be laid down in seven stages:

1. Choice of field of activity. The distribution of each product has its own specifics. Sales of cosmetics differ significantly in the distribution of goods in the car market, alcohol, IT, etc. This must be borne in mind.
2. Market assessment in the selected region. Perhaps there are empty niches in it or the potential for promoting a new product that has not yet gained distribution.
3. Company registration and initial investment. In order for manufacturers of goods to take a potential distributor seriously, it is necessary to have not only an office, but also storage facilities, transport, and most importantly, personnel who will solve logistics issues, keep accounts, etc.
4. Manufacturer search. The Internet greatly simplifies this work. Almost every company that wants to sell its products has a website from which you can get the necessary information.
5. Drafting commercial offer . This is the most important step and the most likely to fail. To attract attention well-known company it is necessary to describe your own possibilities very convincingly.
6. Receiving a positive response and a personal meeting. Here it is appropriate to show interest not only in the products to be distributed, but also in the conditions of future cooperation.
7. Conclusion of an agreement. From the moment it is signed, the distributor becomes official, with all the benefits of such a status.

Exclusive

Even more attractive than the official one is the status of an exclusive distributor. This means that the right to import and sell goods in the selected region belongs to only one company. The lack of competition allows such an exclusive distributor to get the maximum profit. In return, he undertakes not only to distribute goods, but also to protect the represented brand from the appearance of fakes.

The largest distributors in Russia

Since the activity of the distributor is to sell goods known trademarks, then the names of such companies are often "behind the scenes".

As an example, one can take Apple. Everyone is familiar with its products, but few people know that three companies are engaged in its distribution in Russia: Merlion, DiHous and OCS. A year ago, the fourth company refused to cooperate - the Marvel company. Distributors' offices are quite logically located in Moscow and St. Petersburg. Well, the delivery of equipment to the shelves in the regions is carried out by a network of regional dealers.

The top ten of the Forbs list includes the Megapolis group of companies. It is the official distributor of the Baltika company, as well as a number of foreign firms, manufacturers of tobacco, coffee and energy Red Bull.

The third ten of the list is opened by another large distributor - Protek. His field of activity is pharmaceuticals.

The already mentioned company Merlion is located on the 35th line. It is the largest distributor in Russia digital technology and electronics.

The nuances of such a business

It is not enough for a distributor to find a manufacturer willing to cooperate with him. It is also necessary to sell the goods, and for this, buyers are needed. The problem of finding them is perhaps the main one for novice distributors. You can solve it in several ways:

• direct contact with owners outlets in your region;
• creating a group in social networks;
• opening your own online store;
• search for partners at specialized exhibitions, conferences, etc.

The work of a distributor only at first glance seems simple and easy. In fact, it is required to possess certain qualities, among which the first place is occupied by the ability to build communications with people. Because this is, in fact, the main occupation of the distributor.

The second important aspect of the success of the activity will be the willingness to invest in business development. It's no secret that becoming a distributor of one of network company possible without initial capital. But the initial financial investment will allow you to grow your business faster.

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In this post, I will tell you who is a distributor, what is the specificity of distribution activities, and I will also dwell on how to become a distributor and build your business on it. Surely many of you have heard phrases like “official distributor”, “distributor of cosmetics”, etc. in advertising, and after reading this article, you will have a complete understanding of what is meant by this.

Who is a distributor?

So, the very concept of “distributor” is borrowed from the English language (distributor) and in exact translation means “distributor”, and in literary translation it means “distributor”.

A distributor is a legal or individual, which is the official representative of the manufacturer's company and performs the functions of distributing goods from the manufacturer to wholesalers or retailers - dealers and retailers or to end consumers. In fact, the distributor acts as an intermediary between the manufacturer and the seller of the goods, and in some cases even between the manufacturer and the buyer directly.

The distributor can act as huge company with regular millions of turnovers, and an individual, from time to time distributing the products of a certain company.

The main feature that distinguishes a distributor from other intermediaries is that he has the exclusive right to present the manufacturer's products and distribute products at a price set by the manufacturer without any extra charges. The distributor's income is a discount on the purchase of goods, which is set for him by the manufacturer.

You can make several chains of goods passing from the manufacturer to the buyer. The most commonly used scheme is:

Moreover, there can be several dealers in it (large and small). This option is also possible:

Or the option of direct sales, used, for example, in:

The difference between a distributor and a dealer.

A distributor differs from a dealer in that it acts on behalf of a manufacturing company and receives goods for sale in accordance with strictly agreed rules (including those relating to the price of goods), while a dealer acts on its own behalf, purchases goods at its own expense and independently sets the desired level of trade margin for further resale.

At the same time, it should be noted that this difference is rather conditional, and more precisely, the functions, rights and obligations of a distributor or dealer are stipulated in the contracts concluded with them. For example, it happens that distributors purchase goods from the manufacturer at their own expense, just like dealers.

The main function of the distributor is not the final sale of the product, but the creation and development of its distribution network, the promotion and promotion of the trade brand, while the dealer is responsible for the direct delivery and sale of goods to end consumers.

One manufacturer can work with many distributors, and one distributor can work with many manufacturers.

It often happens that the founders of distribution companies are the manufacturing companies themselves. In addition, they can provide certain intermediaries with “VIP statuses” that provide extended rights: official distributor, exclusive distributor, etc.

How does a distributor work?

All the work of the distributor comes down to expanding the sales network and promoting the brand of the product of the manufacturer. He carries out an independent search for dealers, retailers or end users of products (depending on the situation), then sends an order to the manufacturer for the required batch of goods, receives this product for sale by fixed price or redeems at a discount, sells and gives the proceeds to the manufacturer minus his commission.

Most often, only large distribution companies are allowed to take goods for sale, and small ones, as a rule, have to purchase products at their own expense, or at the expense of funds collected from buyers (as, for example, happens in network marketing).

Now that you've got some idea of ​​what a distributor is, let's look at how to become a distributor.

To become a distributor of certain products, you must sign an agreement with the manufacturer, which is usually called a “distributor agreement”. The distribution agreement specifies all the rights and obligations of the manufacturer and distributor, the conditions for the transfer and acceptance of goods, and other working points. At the same time, it is issued distributor certificate with manufacturer's seal and signature CEO, which confirms the rights to the official presentation of the company's products.

Each manufacturer is always interested in having as many distributors as possible, because they are working to promote its product and expand the sales market. But not every distributor will be able to offer the most favorable terms of cooperation.

Very often, the distributor's commission income and the conditions for the transfer of goods (for sale or prepayment) depend on the sales volumes provided by the distributor: the larger they are, the softer the conditions and the higher the income, and vice versa. Therefore, it is likely that you will first have to work for your own name, show good results, which will then definitely work for you.

It is possible to work simultaneously with several manufacturers, perhaps this will affect the increase in turnover, and therefore income, but this is not necessarily the case. Sometimes large-scale cooperation with one large manufacturer and representation of only its interests is more beneficial for the distributor.

For people who do not have a lot of initial capital and opportunities to open a distribution business, you can consider becoming a distributor from scratch. To do this, you can start “from the bottom”: get a job in a distribution company, start with lower positions, for example, with a sales agent, then, showing good work results, move up career ladder to the supervisor regional representative. At the same time, save the income you receive to start your own business. So you can collect some, and, importantly, gain experience in a distribution company.

If you want to engage in distribution activities on a more or less large scale, you will need to incur significant costs:

– rent warehouses and equipment for storage of goods;

- purchase or rent freight transport for transportation;

In other words, it will require well-thought-out and voluminous sources of funding.

The good thing about the distribution business is that there is a place for both very large and very small distributors, and there is always room for development.

How to find manufacturers for cooperation?

If you are thinking about how to become a distributor, the first thing you need to decide is the products of which companies you would like to represent on the market. Manufacturers can be searched in different ways:

1. Through business directories. Looking through the catalogs of manufacturers of certain products, you can directly contact those that interest you and learn from them the terms of cooperation, opting for those companies where the conditions will be optimal for you.

2. Through the Internet. Just by typing in the search “looking for distributors” or “search for distributors”, you will be taken to many pages of companies wishing to build and develop their distribution networks. Choose the ones that interest you the most and go for it.

How to find dealers, sellers and buyers for cooperation?

The second important issue that needs to be considered before becoming a distributor is the search for ways to sell the goods. Here, too, you can act in a variety of ways:

– Through company directories;

– Through direct appeals to retail outlets;

– Through your own website or online store;

– Through colleagues, acquaintances, relatives;

– Through advertisements in print media, etc.

Now you know what a distributor is and how to become a distributor. Let's summarize.

Distribution activity is good option at a variety of scales: from a small work for yourself to generate additional income to building the largest distribution networks and businesses with millions of turnovers. Everyone will be able to find something of their own in it, based on the initial capabilities and goals set. A distributor's earnings largely depend on his sales skills and diligence. Therefore, go for it, and you will certainly be able to achieve good success in this business!

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Distributor, distributor(distribute - distribute) in marketing - a company that performs the functions of a reseller in organizing the distribution and distribution of goods for the manufacturer of goods. The distributor can be either subsidiary, or an independent firm operating on a contractual basis.

The distribution business is the business of providing goods logistics, merchandising and distribution services.

Main functions of a distributor:

• construction organizational structure distribution channels and networks;
• determining the location of distribution centers (bases, warehouses) and other links of the logistics network in distribution channels;
• transportation of products, return of illiquid assets, returnable containers and waste;
• warehousing, storage and cargo handling of products in the warehouse system;
• inventory management, consolidation and dispersal of goods;
• transfer of ownership of products;
• ensuring the safety and protection of goods, risk insurance;
• maintaining product quality and logistics service standards;
• pricing;
• monitoring and Information support suppliers, etc.
• a set of measures aimed at promoting the product, thereby increasing the indicators of qualitative and quantitative distribution.

The essence of the distributor.

When providing logistics services expensive products sold individually, the distributor's activity is reduced to finding potential clients advertising of products, organization of primary contacts with the manufacturer-buyer, conclusion of supply contracts, organization of after-sales service, etc.

In the case of the logistics of mass demand goods, the distributor may be required to have a significant staff of specially trained personnel, a branch network (presence of sub-distributors) in the regions, showrooms and a controlled dealer network.

One of the functions that a distributor can take on besides logistics is intermediary. In this case, the distributor is the representative of the manufacturer in a certain territory, in the segment. It is obvious that the most flexible business conditions for the distributor will help to provide the conclusion of a mixed distributor-agency agreement. Services that a distributor can provide by agreement with a supplier, manufacturer in the distribution channel, dealers and customers:

Marketing services to dealers and buyers;

Equipment installation and adjustment services;

Training Services;

After-sales service;

Please note that in the definition of "distributor" does not mention obligations to the manufacturer to promote the product. On the contrary, as additional services, when we are talking on the provision of marketing services, compensation for the fact of the provision of these services must be assumed by the manufacturer, if he is really interested in selling his product.

The word distributor (pronounced "distributor") is literally translated from English as "distributor" or "distributor". A distributor can be either an individual or an organization.

Main functions of a distributor

Distributor functions consist in the official presentation of the manufacturer and the distribution of its products between wholesalers and retailers- and . In some cases, the distributor may act as an intermediary between the manufacturer and the end user.

Most often, the distributor plays the role of an intermediary between the company that produces the goods and the merchants who sell them.

The functions of a distributor can be performed, as already mentioned, by an individual working occasionally, and a huge company whose turnover is amazing.

The main difference between a distributor and other intermediaries is that he has exclusive rights to offer goods produced by a particular company, as well as the rights to distribute these goods at the manufacturer's price. The manufacturer gives the distributor a discount on the purchase of its products. Due to this discount, the distributor's income is formed.

Goods movement patterns

How does the product reach the end consumer? There are several basic schemes for the movement of goods. Let's dwell on the most common:

• This scheme assumes the presence of one or more dealers:

  Manufacturer → Distributor → Dealer → Retailer → Customer

• In this mechanism, on the contrary, dealers are not provided:

  Manufacturing Company → Distributor → Retailer → Customer

• This is how direct sales are carried out - for example, in the field of network marketing:

  Manufacturer → Distributor → Consumer

The principle of the distributor

The first task of the distributor is to expand the sales network and promote the products of the manufacturer. The distributor searches for dealers, retailers or (in some cases) consumers on its own, analyzes the demand, and then informs the manufacturer how much product he can sell. The manufacturer provides him with a batch of goods at a set price or allows him to buy it at a discount. The distributor sells the product, transfers the proceeds to the manufacturer and receives his share in the form of commission.

As a rule, only large distribution companies receive products for sale. Small ones purchase it with their own funds or with funds received from the end consumer (this is how distributors operate in network marketing).

So, you roughly imagine what a distributor does. It's time to talk about what needs to be done to become one.

How to become a distributor

In order to become a distributor, you need to conclude an agreement with a manufacturing company. It's called a "distributor agreement." The contract fixes all the obligations imposed on the distributor and the manufacturer, as well as the rights of both parties, the conditions for the purchase, transfer and sale of goods, and many other nuances. After signing the contract, the future distributor receives a certificate certified by the manufacturer's seal and director's signature. This document serves to confirm the distributor's right to represent the company's products.

Manufacturers are extremely interested in having as many distributors as possible: they, after all, do the work of promoting the product and expanding the sales market. But this does not mean that each distributor will be offered ideal conditions for cooperation.

The fact is that the amount of income of the distributor and the conditions for obtaining products are directly related to sales volumes. The higher they are, the more profitable it is for the distributor to cooperate with the manufacturer. Hence the conclusion: starting to work as a distributor, you should not hope for a quick and easy profit. First you need to declare yourself, prove your ability to sell. Otherwise, this activity will not bring the desired results.

A distributor may cooperate with several companies. In some cases, this has a positive effect on turnover and income. But sometimes it is worth focusing on cooperation with one powerful manufacturer: both parties will benefit from this.

If you do not have starting capital and opportunities to start this kind of business, it makes sense to try to become a distributor from scratch. To do this, you need to get a position in a distribution company. Of course, this job will be far from a “dream job”: at first you will work as a sales agent, then as a supervisor. In the process, you will need to set aside money for own business. Thus, you will gain experience as a distributor and a small initial capital.

If you dream of something more, and the scenario described above does not suit you, keep in mind that opening a large-scale business will require serious investments:

• First of all, you will need to rent a warehouse and equipment to store the goods.
• Secondly, you will have to buy (or rent) a truck - after all, you will have to carry out transportation.
• Thirdly, you have to take care of the advertising campaign.

In general, you will not be able to do without a well-thought-out business plan and reliable sources of financing.

It is important to note that the distribution business implies a relatively comfortable coexistence of both large and small players, both of which have ample opportunities for development.

How to search for manufacturers

If you decide to try your hand at this business, first of all, decide which companies you want to work with. Potential partners can be found:

1. 1. With the help of business directories. The catalogs contain information about the manufacturers of a particular product. Using them, you can contact several companies, evaluate the terms of cooperation and choose the most suitable for you.
2. 2. With the help of the Internet. Type in the search bar "we are looking for distributors", and the system will give you a list of companies that are ready to cooperate. Give them a call, read the terms and conditions, and get to work.

How to find buyers

The distributor must have a good idea of ​​how he will sell the manufacturer's products and, most importantly, to whom. To find dealers, retailers and consumers, you can:

• study business directories and media ads;
• contact retail outlets;
• create your own page or store on the Internet;
• use social networks and forums;
• reach out to friends, co-workers and family.

The distribution business provides you with good opportunities regardless of the scale: you can earn additional income by working exclusively for your own pleasure, or build the largest intermediary network and earn big money.

Of course, at the beginning of a career, a distributor is a hostage to their financial capabilities. But in the end, the determining factor for success is his business qualities: diligence, ability to cooperate, ability to interest the client. Therefore, if you feel called to this kind of activity, do not be afraid to try your hand at the distribution business!

Any industrial enterprise sooner or later faces the problem of selling their products. If the volumes are relatively small, then the problem can be solved on its own. When the quantity increases, and demand is limited, then you have to resort to outside help.

Not everyone still knows who a distributor is. But those who happened to cooperate with him understand the mutual benefit.

Term meaning

In direct translation from English, the word distributor means "distributor", and, speaking in literary language, - "distributor". So what is a real distributor? Most enterprises are accustomed to selling their products in the traditional way, that is, through warehouses, bases, shops and other facilities. But there is another, not quite familiar option. These are distribution networks. Here it is necessary to clearly understand who a distributor is.

In fact, this is a company that purchases goods in bulk from major manufacturer for the purpose of its further implementation in the territory of any region. It can be either a large company or any individual entrepreneur who works with small batches. Some consider them intermediaries, but this is not entirely true. They do not just take products “for sale”, but purchase them at their own expense, and then sell them on their own behalf. From the point of view of legislation, when asked who a distributor is, we can say that this is a reseller who operates on special conditions. And they are negotiated in advance.

Distinctive features of the distributor

To fully understand the problem and figure out who a distributor is, you need to highlight for yourself the main features that distinguish it from other buyers:

1) Such a company sells the received products in a certain territory and, in fact, is engaged in its promotion on the market.

2) Such buyers have a primary right to the goods and, in the event of possible competition, can count on certain advantages.

3) A cooperation agreement is usually concluded for a long period.

4) A special sign is put on the products, which symbolizes belonging to the distributor. The parties must agree in advance on the possibility of its use after the termination of the existing agreement.

5) The supplier (manufacturer) enables the distributor to be the main representative of his interests in a particular territory.

If the concluded sales contract is based on all of the above circumstances, then it can be considered a distribution contract.

Significant difference

Sometimes people confuse the two concepts, not understanding who a distributor and dealer are. Although both of them sometimes sell the same product, they do it in different ways.

If you carefully consider their activities, you can notice several circumstances that significantly distinguish them from each other:

1) If the distributor receives products for sale from the supplier himself, then the dealer buys it from him.

2) The first is strictly limited in price, which is stipulated by the concluded contract. Strict observance of this clause is considered one of the conditions for their mutual long-term cooperation. The second forms it independently, setting the desired trade margin.

3) The distributor, unlike the dealer, takes the goods in large quantities.

4) For the distributor, the main thing is the distribution of goods and its various promotion. Sometimes its functions are reduced to the promotion of a new brand. The dealer sells it directly to the buyer at retail or small wholesale.

However, both of them are unanimous in that they can have several such partners if they wish.

Ways to achieve the goal

Anyone dreams of being a distributor wholesale company. It opens up for her great opportunities raising the status and importance in the market. In addition, the distributor receives exclusive rights to sell a particular product. In fact, he becomes a monopolist in a particular region, and in any case, this is already profitable. But in order to achieve the desired goal, one must clearly understand who a distributor is and how to become one. To get started you need to have:

1. Own or rented warehouses equipped with special loading and unloading equipment.
2. Vehicles for the delivery of goods.
3. Have your own logistics service, which will also periodically advertise the company.

After that, you need to search potential partners and try to get them interested in cooperation.

And when those who wish will get in touch, all that remains is to conclude an agreement and stipulate all the points of interest (terms, prices, dates). There is one peculiarity in this issue. Since the distributor receives profit from the sale of goods, its increase directly depends on the volume of supplies. Therefore, large wholesale companies are most interested in such activities.

What is the secret of success?

To achieve good results and take your place in a certain niche, you need to understand who a product distributor is.

For clarity, you can take an enterprise that imports into the territory this region products of a foreign manufacturer. If the product is of high quality and quite popular, then there will definitely be a demand for it. But any trading company or a private seller can only take it from a distributor. This gives a huge advantage and makes it easy to get the expected profit. Many firms operate under this system. network marketing. The head office takes the goods from the manufacturer. And employees, being dealers, sell it to customers. Sometimes to expand the network they use special systems discounts. People always make contact if they see their benefit in it.