When you're first getting into selling products online it can be confusing and overwhelming to try and understand the product supply chain. People throw terms like brand, distributor, and manufacturer around and expect you to fully understand what each is. This article should clear the confusion up for you!

Manufacturer

A manufacturer is the creator, or the company that oversees the creation, of a product line. Usually the manufacturer will give their products a brand name, which is the name they market and sell the products as. More times than not, the manufacturer's business name is the same as their brand name. For this example, we will call the manufacturer ROCKFORD DRILLS and they oversee the production of drills (sporting their brand name) in a factory that's located in China. In the past, usually the manufacturer was also the factory that created the good. But in the current market, typically the manufacturer is a US-based corporate headquarters that oversees the production of their products in a factory overseas. They then import the products from their overseas factory and store it in their corporate warehouse.

Brand Name

As mentioned above, a brand name is simply the name a manufacturer gives to their product line for marketing purposes. In this example, ROCKFORD DRILLS manufactures a line of drills that they have branded with the name ROCKFORD DRILLS. That is how they advertise their products, and that is the trade name that they use for all marketing purposes. Almost always, the manufacturer name is the same as the brand name. For example, Sony manufactures Sony products & LG manufactures LG products. Every once in a while you will find products that do not have a brand name, and these are called 'generic' products. They still have a manufacturer with a company name, but for one reason or another they have chosen to not 'brand' their products with a brand name. This is usually because the manufacturer does not intend to market their products to the general public.

Distributor

A distributor is a company that generally does not manufacture any products themselves. Instead, they buy in bulk from one or more manufacturers at volume discount prices. They then "distribute" the brand name products to retailers of the products (both online and offline retailers). They make their money by negotiating volume pricing with the manufacturers, and then they mark it up a little before wholesaling the products to retailers like ecommerce stores or real-world brick & mortar stores. It is quite common for a distributor to sell hundreds of different brand names at wholesale prices. So an account with a distributor, can often give you access to numerous brand names of your product line. In this day & age, most distributors are willing to dropship for online retailers like yourself. It is also important to note that distributors usually focus on a specific market. Sticking with our example above, a power tools distributor may buy ROCKFORD DRILLS in bulk. ROCKFORD DRILLS is one of the many brand names of power tools they buy in bulk from different manufacturers.

Dropshipper

A dropshipper (aka supplier) can be either a manufacturer or distributor. The term "dropshipper" simply refers to any wholesaler that supplies products for your retail store. Dropshippers come in many shapes & sizes, but 99% of the time dropshippers are manufacturers, distributors, or a hybrid of the two.

Retailer

A retailer is anyone that purchases at "wholesale" prices and resales the products are "retail" prices. A retailer can be a brick & mortar store owner, an ecommerce store owner, or even a hot dog stand street vendor! If you buy products, mark them up, and resale them you are a retailer.