What a distributor does that a reseller doesn't

A distributor is an independent business that buys product or licences from a vendor in bulk, holds the credit and inventory risk itself, and resells onward — usually to a network of smaller resellers, VARs or retailers a vendor could never reach or service directly, rather than to the end customer. That's the structural difference from a reseller: a reseller typically deals with the vendor, or the vendor's distributor, directly and sells to the end customer under its own contract; a distributor almost never touches the end-customer relationship at all, existing purely to move product and manage logistics, financing and enablement across a long tail of smaller partners.

The economics follow from that role. A distributor typically works on a thin per-unit margin — commonly in the mid-single to low-double digits — made up on volume rather than on any single deal, in exchange for taking on functions a vendor would otherwise have to build itself: local stock, credit terms for partners who can't pay a vendor directly, returns handling, and the sales and technical enablement that keeps a reseller channel actually selling. For how that reseller layer is structured once a distributor has handed product on, see reseller programmes; for how the legal relationship between vendor and distributor is typically drafted, see distribution agreements: the essentials.

VBER = Regulation (EU) 2022/720. Market-share and hardcore-restriction assessments are always agreement-specific; this is orientation, not legal advice.

How the EU's 2022 vertical rules shape a distribution agreement

The Vertical Block Exemption Regulation (VBER 2022 — Regulation (EU) 2022/720) is the EU competition law that decides whether a distribution agreement's territorial and customer restrictions are lawful, and it has applied since 1 June 2022, replacing the previous regime under Regulation (EU) No 330/2010, with a one-year transitional window that closed on 31 May 2023 for agreements still relying on the old rules. It runs until 31 May 2034, so an agreement signed today sits inside a rulebook that isn't due its next overhaul for years.

The 30% safe harbour

An agreement falls inside the VBER's safe harbour — presumed lawful without a case-by-case competition assessment — if neither the supplier's market share nor the distributor's market share exceeds 30% of the relevant market, and the agreement contains none of the hardcore restrictions below. Above that threshold the agreement isn't automatically illegal, but it loses the presumption and has to be assessed on its individual effects under Article 101 of the Treaty on the Functioning of the EU (TFEU).

Hardcore restrictions that void the exemption

Certain terms void the exemption regardless of market share: fixing or setting a minimum resale price for the distributor (resale price maintenance), and restricting passive sales — fulfilling unsolicited orders — into a territory or customer group reserved for another distributor. Exclusive distribution can still restrict active selling (unsolicited outreach, targeted advertising) into a reserved territory; it just can't stop a distributor from filling an order that arrives on its own. An outright ban on a distributor selling online at all is treated the same way as a hardcore territorial restriction under the case law the VBER guidelines build on.

What the 2022 rules changed from the 2010 regime

Three changes matter most for a distribution agreement drafted in 2026. Dual distribution — where a supplier sells both directly and through independent distributors — now has its safe harbour extended to cover wholesalers and importers as well as retailers doing this, but with narrower rules on what commercially sensitive information a supplier and distributor can exchange when they're effectively competing for the same customer. Dual pricing — charging a distributor a different wholesale price for stock destined for online sale versus offline sale — is now more clearly permitted, provided the difference reflects a genuine cost difference rather than simply discouraging online sales. And wide, across-platform retail parity clauses, which stop a distributor offering better terms through a different platform or channel, were added to the list of restrictions excluded from the safe harbour in 2022, even though narrower parity clauses often remain covered. None of this replaces legal advice on a specific agreement — see distribution agreements: the essentials for the clauses a European distribution contract typically needs to work through.

What a distribution margin actually pays for

A distributor's margin is compensation for taking on inventory risk, credit, logistics and partner enablement that a vendor would otherwise have to build itself — not a reward for closing the sale, which is usually someone further down the chain's job. The typical shape of the chain runs a markup of roughly 15–20% when a manufacturer sells into a distributor, with the distributor adding a further 20–40% before the product reaches a reseller or retailer, though these figures vary hugely by category: high-volume commodity electronics and components often run distributor margins in the single digits, made up purely on volume and stock turns per year, while specialised, regulated or service-heavy categories can sit at 20–30% or more. Treat all of these as illustrative bands, not a rate card — get the real number from the specific agreement.

What a vendor is actually buying with that margin is reach and working capital it doesn't have to deploy itself: a distributor extends credit terms to hundreds of smaller resellers a vendor's own finance team would never underwrite individually, holds local stock so a reseller isn't waiting on cross-border shipping for every order, and absorbs the enablement and first-line partner support a lean vendor sales team can't scale to. For the maths on what a reseller then earns on top of the distributor's price, see reseller programmes — distributor margin and reseller margin are two separate layers in the same chain, not one number split two ways.

Finding and vetting a distributor, market by market

The fastest way to find a distributor in a European market is almost never a cold web search — it's a warm introduction through a trade fair, an industry association, or the EU's own Enterprise Europe Network, which runs a free partner-search service for SMEs looking for a distributor or agent in another EU country. Sector-specific trade fairs remain genuinely useful for this too: a distributor actively looking for new supplier lines attends the same events its category always has, and a stand conversation followed by prompt, specific follow-up converts far better than an unsolicited email ever does.

Once a candidate is on the table, vetting is largely a paperwork exercise before it's a relationship one. Check the distributor's registration and filed accounts through the relevant national registry — Germany's Handelsregister, France's Infogreffe, the UK's Companies House, or the equivalent in the target market — for consistent revenue and a credible trading history. Verify its VAT number through the EU's VIES system before relying on reverse-charge invoicing, and ask directly for trade references from other suppliers it already represents; a distributor unwilling to provide them, or one with no physical warehouse address, is a red flag whatever else looks right on paper.

How to find a distributor in the EU walks through the search and shortlisting process in full; for the market most European vendors ask about first, how to find distribution partners for the DACH market covers what's different about Germany, Austria and Switzerland specifically.

A distributor is not a smaller version of a reseller — it's a different job entirely. Judge one on reach, credit and logistics, not on how well it would sell to an end customer, because it usually never will.

Where distribution sits in the wider channel

Distribution is the layer that gets a product physically and commercially close enough to a market for a reseller or VAR to take it the rest of the way — it's rarely the layer that talks to the end customer at all. Once product is with a distributor, what happens next depends on the model built on top of it: a standard reseller programme if partners sell under the vendor's own brand, white-label & VAR territory if a partner rebrands the product or adds substantial services of its own, and supplier & procurement practice on the buying side, for a business vetting its own upstream distributor rather than appointing one.

Distribution choice also isn't purely a channel decision — it's a market-entry one. A vendor weighing which distributor to appoint in, say, the Nordics or Southern Europe is really deciding how it enters that region at all, which is why partners by region is worth reading alongside this page rather than after it. For the full picture of how distribution fits against reseller, VAR and white-label models, see the Reseller & Channel hub.

Quick answers

What's the practical difference between exclusive and selective distribution?

Exclusive distribution reserves a whole territory or customer group for one distributor and can block competitors from actively selling into it; selective distribution instead sets criteria — technical, service or brand standards — that any distributor can meet to gain access, so several distributors typically compete inside the same territory at once.

Can a distributor also sell directly to end customers?

Yes — this is called dual distribution, and the EU's 2022 VBER extended its safe harbour to cover wholesalers and importers as well as retailers doing this, though it narrowed the rules on what commercially sensitive information a supplier and distributor can share when they're also effectively competing for the same customer.

Does a distribution agreement need to be registered with an EU authority?

No — there is no EU-wide registration requirement for a distribution agreement. What matters is whether the agreement's terms fall inside the VBER's 30% safe harbour or would need an individual competition assessment if a regulator or competitor ever challenged it.

How is a distributor's margin usually structured?

Almost always as a straightforward wholesale discount off list price rather than a commission — the distributor buys at that discounted price and carries the resale risk itself, unlike a reseller paid on completed sales or an affiliate paid purely on referral.