Two-step distribution
Also called two-step, two-tier distribution
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is two-step distribution?
Two-step distribution is a supply chain in which a distributor buys from manufacturers and sells to dealers, which then sell to the end users. The product passes through two resellers; the term is common in building materials, where two-step distributors supply lumberyards and dealers.
How it works
A two-step distributor and a master distributor both sell to other resellers, and the terms overlap. “Two-step” is heard where the next reseller is a dealer or retail yard; “master distributor” where it is another distributor.
Two-step distribution example
A building products distributor buys roofing by the truckload and sells it to 60 independent lumberyards, which sell it to the roofers in their towns.
Related terms
- Master distributorA master distributor is a distributor that sells only to other distributors, not to end users.
- DistributorA distributor is a company that buys products in bulk from manufacturers, holds them in stock and resells them in smaller quantities to other businesses.
- Channel conflictChannel conflict is the friction that arises when a manufacturer or distributor sells through several routes that end up competing for the same buyers.
