Marketplace distributor or agency – comparing the models
Updated: · GrowNow team
A marketplace agency runs the manufacturer’s account for a fixed fee or commission – the manufacturer remains the seller and finances the stock. A marketplace distributor buys goods from the manufacturer on a B2B invoice and sells them itself, taking on the accounts, logistics and the seller’s obligations. These are two completely different models of cash flow and responsibility.
How does a marketplace agency work?
An agency manages the manufacturer’s account on Amazon, Zalando or Allegro: it prepares listings, runs advertising and reports results. The manufacturer remains the seller – it finances the stock in warehouses, registers for VAT and is responsible for product compliance and customer service. The agency earns a retainer or commission, whether or not the sales are profitable.
How does a marketplace distributor work?
A distributor buys products from the manufacturer and sells them on its own accounts. The manufacturer receives a B2B order and invoices the distributor like any wholesale customer. VAT registrations, platform requirements, logistics, advertising and customer service are on the distributor’s side, because the distributor is the seller in the market.
Comparing the models
| Agency | Distributor (GrowNow) | |
|---|---|---|
| Who is the seller | Manufacturer | Distributor |
| Who finances the stock | Manufacturer | Distributor |
| Remuneration | Retainer or commission | Margin between purchase and selling price |
| VAT and registrations abroad | Manufacturer | Distributor |
| Accountability for results | Limited | Full |
| Cash flow for the manufacturer | After the retail sale | On the B2B order |
Which model should you choose?
An agency makes sense when a company wants to be the seller itself, has a team to run the accounts and funds expansion from its own resources. A distributor is better for a manufacturer that wants to sell abroad without building an e-commerce department, without registering in many countries and with predictable cash flow.
What to watch out for when choosing a distributor
- Pricing policy – does the distributor agree minimum prices with you and avoid undercutting your other channels?
- Brand – does the trademark stay yours, with Brand Registry run in agreement with the owner?
- Trading terms – what happens to stock that doesn’t sell?
- Transparency – do you get a sales report per market and product?
See how stock purchasing works ›
Frequently asked questions
Does a marketplace distributor take over my brand?
It shouldn’t. At GrowNow, the brand and trademark stay with the manufacturer, and we run Brand Registry in agreement with the brand owner.
Can I work with a distributor and still sell myself?
Yes. GrowNow is only interested in marketplaces, so your online shop, distribution and bricks-and-mortar sales stay unchanged.
How much does working with a distributor cost?
There is no retainer in the distribution model. Settlement is the purchase price of the goods and the agreed trading terms.
Who handles customer service and returns?
The distributor. As the seller in the market, the distributor is responsible for customer service, returns and platform requirements.
What happens to stock that doesn’t sell?
That depends on the trading terms. Agree it before signing – it is one of the key questions to ask any distributor.