Historically, most manufacturers didn’t want the bother of selling small amounts of products to lots of customers with the attendant customer service and credit issues. Therefore, they sold large amounts to wholesalers or brokers who then broke down master packs and sold either individual products or inner packs to the retailers.

 

Some manufacturers, especially those who had more expensive products (per unit) have always sold “dealer-direct.” Many manufacturers sell to mass merchandisers (Target, Kroger, CVS, etc.,) These companies may require direct sales, and since they have warehouses where master packs are broken down into smaller quantities and shipped to the outlets, they act as their own wholesaler. Mass merchandisers also sometimes use feeders or brokers who are responsible for a section of the store and are very much like wholesalers.

 

In the 21st Century, we have some manufacturers who have broad product offerings who have decided they don’t want to sell through wholesalers. They often limit the number of retailers they sell to buy geographic “territory.”

 

Manufacturers who sell to mom-and-pop retailers generally either have company representatives who are paid with a combination of salary and commission or they hire sales representative organizations to sell to these stores. If the manufacturer sells to various different types of retailers, they may need to employ different people to cover those different areas. In almost all cases, the sales teams are given territories where they have the exclusive right to sell.