A dealer is a business that buys products to resell in the course of its business—placing the products in inventory and selling them in a retail store or online in e-commerce. A dealer is a middleman between the distributor and the customer and is an authorized seller of the manufacturer's products in a particular geographic area—sometimes nationwide.

A dealer may sell competing products from different manufacturers or brands, or may be restricted by its dealer agreement with the manufacturer.

Distributors

A distributor has the exclusive right to distribute products in a certain geographic area. A distributor is usually selected by the product manufacturer to sell the product for the manufacturer to dealers in a certain geographic area.

Dealer and Distributor Agreements

The terms under which a dealer or distributor may sell the manufacturer’s products are usually governed by a written contract that may provide for minimum advertised pricing (MAP) and other important terms.

In Pennsylvania, dealer and distributor relationships with manufacturers are typically governed by written agreements that outline the terms and conditions of their business interactions. These agreements may include provisions for minimum advertised pricing (MAP), territorial rights, exclusivity, and other obligations. Dealers act as intermediaries, purchasing products from manufacturers or distributors to resell to customers, either in physical retail locations or online. They may carry a variety of competing brands, unless their dealer agreement imposes restrictions. Distributors, on the other hand, are often granted the exclusive right to distribute a manufacturer's products within a specified geographic area. They supply products to dealers and sometimes directly to customers. Both dealers and distributors must comply with federal and state laws, including the Pennsylvania Unfair Trade Practices and Consumer Protection Law, which prohibits deceptive business practices and ensures fair competition. Additionally, antitrust laws at both the federal and state level may impact the terms and enforcement of dealer and distributor agreements to prevent anti-competitive practices.