What is the distribution industry?

The distribution industry handles the movement, storage, and delivery of goods across sectors – helping suppliers, retailers, and end users stay connected and informed, even in shifting markets.

What is the distribution industry?

The distribution industry is an essential link in the supply chain, connecting manufacturing companies and suppliers with various businesses, contractors, institutions, retailers, and now, increasingly consumers. Distribution industries focus on delivering a wide range of products through a variety of channels and methods. Many also offer value-add services to differentiate themselves and provide more value to their customers.

What do distribution companies do?

Distribution companies serve as the vital bridge between producers and end users. They purchase, warehouse, and move goods – often in massive quantities – so that products are available where and when they’re needed. Many also offer services such as assembly, customization, technical support, and even inventory planning to optimize their own operations and create even better value for their customers.

What are distribution channels?

Distribution channels are the routes by which products travel to end users. Depending on the industry, they may be physical or digital, and structured as either single-tier or multi-tier systems. Single-tier models move goods through one direct step (such as manufacturer to retailer), while multi-tier models involve multiple intermediaries like wholesalers, resellers, or distributors.

Direct distribution channel

Direct distribution means delivering products straight from the distributor or manufacturer to the customer without intermediaries. It offers more control over pricing, inventory, and service quality – and is often supported by digital storefronts, field reps, or fulfillment systems.

Indirect distribution channel

Indirect distribution sees distributors relying on resellers, dealers, or wholesalers to get products to the end user. This approach can broaden market reach, simplify logistics, and support high-volume sales – but also adds layers that can impact margin and customer insight.

Hybrid distribution channel

Hybrid distribution combines direct and indirect methods. It lets companies serve different markets or customer segments through different channels while centralizing visibility and control. The goal is to balance flexibility with efficiency.

Distribution industry vs. industrial distribution: What’s the difference?

While these terms are similar, there is a subtle difference. Distribution industries is the broader term that includes any sector moving goods from producers to users. Industrial distribution typically refers to B2B suppliers of parts, equipment, or services used in manufacturing, construction, or infrastructure. These companies often provide technical support, after-sale service, and long-term supply relationships.

3 strategies for distribution channels

Distribution strategies can vary, but the primary goals don’t change: take possession of produced goods and deliver them to the purchaser smoothly and efficiently.

Mass distribution

Mass distribution (aka intensive) means making as many products available in as many locations as possible to maximize visibility and meet demand. Distributors need streamlined allocation, pricing, and order orchestration across channels to balance supply and service efficiently.

Exclusive distribution

Exclusive distribution is when products are offered through select partners or territories to preserve brand value and control pricing. This demands strict inventory governance, territory assignments, and tracking to uphold agreements and sustain expectations.

Selective distribution

Selective distribution involves the use of a curated network of resellers to maintain quality and consistency while reaching broader markets. Success requires flexible agreement terms, differentiated service levels, and transparent data flows across all channels.

What is reverse distribution or reverse logistics?

Reverse distribution – or reverse logistics – refers to the flow of goods in the opposite direction of typical fulfillment: from end users or sales channels back through the supply chain. It covers product returns, recalls, repairs, refurbishment, recycling, and other scenarios where items re-enter the system for processing.

Today’s distributors are increasingly expected to handle reverse flows efficiently and sustainably. From electronics to perishables, goods must be inspected, sorted, and routed based on condition, value, and regulatory requirements. But the good news is that reverse logistics can be a source of cost recovery, customer satisfaction, and, of course, environmental accountability. But only when supported by clear tracking, smart routing, and systems that manage inventory and compliance at every step.

Key intermediaries in distribution

Distributors rely on a range of intermediaries to get goods into the right hands. These players expand market reach but add complexity around visibility, margins, coordination, and control.

Retailers

Retailers sell directly to end consumers via stores, catalogs, or web channels. They require reliable product availability, timely delivery, and accurate data sharing with distributors to meet customer expectations and manage omnichannel demand.

Wholesalers

Wholesalers purchase in bulk from manufacturers and distribute to retailers, institutions, or businesses. Their success depends on efficient inventory turnover, bulk pricing strategies, and real-time restock capabilities to stay cost-effective and responsive.

Agents

Agents represent distributors or suppliers to negotiate orders and contracts, often without holding inventory. They rely on clear product data, pricing structures, and commission tracking to effectively match supply and demand across customer segments.

Brokers

Brokers connect buyers and sellers across geographies or industries, earning commissions on transactions. They depend on real-time market data, product specifications, and availability updates to act decisively and close deals confidently.

The internet

Online marketplaces and e-commerce storefronts bring digital reach and convenience – often selling to multiple customer types. Distributors must offer accurate digital catalogs, dynamic pricing, and fast fulfillment to perform consistently in this space.

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Distribution industry examples

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Industry-specific tools to help distributors thrive in a fast-paced world

Industry-specific tools for smarter workflows, deeper visibility, and faster decisions – helping distributors stay ahead in a fast-moving, margin-tight world.

Distribution software suite

Designed for modern operations, Infor CloudSuite connects end-to-end distribution processes – from order orchestration to delivery – while supporting value-added services and real-time analytics. Cloud-native and modular, it scales with your business and keeps you customer-focused as needs evolve.

Explore the suite

Distribution ERP

Built for distributors, our cloud ERP unites finance, inventory, warehousing, and planning in one AI-powered platform. Pre-configured for distribution workflows, it accelerates deployment and provides real-time supply chain visibility – helping teams stay fast, responsive, and operationally resilient.

Explore ERP

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What is the distribution industry?