Legal Definitions - dual distributor

A dual distributor is a business that sells its products or services to customers at two distinct levels within the supply chain at the same time. This means a company might act as a supplier to other businesses (like wholesalers or resellers) while also selling directly to the end-user or a retailer.

Here are some examples to illustrate this concept:

• Example 1: A Manufacturer of Specialty Food Products

  Imagine "Gourmet Bites Co.," a company that produces artisanal jams and preserves. Gourmet Bites Co. operates as a dual distributor because:

  • It sells its jars of jam directly to individual customers through its own online store and at local farmers' markets. (This is selling at the retail level, directly to the end-consumer.)
  • Simultaneously, it sells large bulk orders of its jams to "Fine Foods Distributors," a wholesale company that then supplies independent grocery stores, cafes, and gift shops across the region. (This is selling at the wholesale level, to an intermediary business.)

  How it illustrates the term: Gourmet Bites Co. is a dual distributor because it engages in sales at two different points in the distribution chain: directly to consumers (retail) and to a wholesaler who then distributes to other retailers (wholesale).

• Example 2: A Company Producing Industrial Equipment

  Consider "Precision Robotics Inc.," a manufacturer of specialized robotic arms used in manufacturing plants. Precision Robotics Inc. acts as a dual distributor by:

  • Selling its high-end robotic systems directly to large automotive manufacturers and aerospace companies that use the equipment in their own production lines. (This is selling directly to the end-user business, which is a form of direct retail for B2B products.)
  • At the same time, it sells a range of its standard robotic components and smaller systems to "Industrial Solutions Group," a network of independent distributors and integrators who then resell and install these products for smaller factories and workshops in specific geographic areas. (This is selling to a reseller/wholesale level.)

  How it illustrates the term: Precision Robotics Inc. is a dual distributor because it sells directly to major industrial clients (effectively a retail level for B2B) and also supplies a network of resellers (a wholesale level) who then serve other businesses.

• Example 3: A Software Development Company

  Take "CodeCraft Solutions," a company that develops project management software for businesses. CodeCraft Solutions functions as a dual distributor when it:

  • Offers monthly subscriptions to its software directly to small and medium-sized businesses through its website. (This is selling at the retail level, directly to the end-user business.)
  • Concurrently, it licenses its software to "Enterprise IT Partners," a large consulting firm that bundles CodeCraft's software with other services and sells it as part of comprehensive IT solutions to major corporations. (This is selling at a reseller/wholesale level, to another business that integrates and resells the product.)

  How it illustrates the term: CodeCraft Solutions is a dual distributor because it sells its software directly to businesses (the retail level for B2B software) and also through a partner company (Enterprise IT Partners) that acts as an intermediary in the distribution chain.