A distribution model supplies merchandise in bulk quantities, typically to retailers or other businesses, at prices lower than those offered to individual consumers. This allows these entities to acquire goods for resale, further processing, or internal use. Examples include a clothing distributor providing apparel to boutiques or a food supplier selling produce to restaurants.
This approach is vital for economic efficiency, enabling economies of scale that reduce per-unit costs and streamline supply chains. Its historical roots can be traced back to early trading systems, and it has evolved with advancements in manufacturing and logistics. The advantages encompass cost savings, increased market reach, and the potential for higher profit margins for both the supplier and the buyer.
