Master distributor
Also called redistributor
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is master distributor?
A master distributor is a distributor that sells only to other distributors, not to end users. It buys from manufacturers in large quantities and lets smaller distributors buy the same products in small quantities with fast delivery.
How it works
Distributors use a master distributor to fill gaps: lines they don’t stock, items they buy too rarely to meet a manufacturer’s minimum order, or emergencies when their own stock runs out. Because it doesn’t sell to end users, a master distributor doesn’t compete with its own customers.
Master distributor example
A small industrial distributor needs 40 specialty hose fittings, but the manufacturer’s minimum is 500. It orders the 40 from a master distributor and has them the next day, at a slightly higher unit cost.
Related terms
- Two-step distributionTwo-step distribution is a supply chain in which a distributor buys from manufacturers and sells to dealers, which then sell to the end users.
- DistributorA distributor is a company that buys products in bulk from manufacturers, holds them in stock and resells them in smaller quantities to other businesses.
- Minimum order quantity (MOQ)A minimum order quantity (MOQ) is the smallest amount a supplier will sell in one order, set as a number of units or cases or as a dollar value.
- WholesalerA wholesaler is a business that buys goods in large quantities and resells them to other businesses rather than to consumers.
