Distributor vs commercial agent: what the difference means for a manufacturer
A distributor buys your goods and resells them in its own name and at its own risk; an agent negotiates sales on your behalf for a commission.
Marta Zielińska · Market research
Updated 8 November 2026 · 4 min read
A distributor buys a manufacturer's goods and resells them in its own name and for its own account, so it owns the stock and carries the credit and price risk; a commercial agent negotiates sales on the manufacturer's behalf, the sale contract is between the manufacturer and the customer, and the agent earns a commission.
Putting it simply: with a distributor you sell once, to the distributor, and it decides how to resell. With an agent, you sell to each customer yourself while the agent finds and negotiates the deals, so you keep the risk and the price. The choice also decides what you may owe at the end.
Where it comes from
Commercial agent. Directive 86/653/EEC defines a commercial agent as "a self-employed intermediary who has continuing authority to negotiate the sale or the purchase of goods on behalf of another person" (the principal), or to negotiate and conclude such transactions "on behalf of and in the name of that principal" (article 1(2)). On termination, depending on the Member State's choice, the agent is entitled either to an indemnity, where it brought new customers or significantly increased business and payment is equitable, capped at one year's remuneration averaged over the last five years, or to compensation for damage (article 17). Article 18 excludes the claim in some cases, for example termination for the agent's serious default. The parties may not derogate from these rules to the agent's detriment before the contract expires (article 19).
Distributor. No EU act protects distributors as such; protection at the end is national and differs widely. See our series on distribution agreements in Germany, France, Italy, Spain, the Netherlands, Belgium, Poland and Austria, and the overview for US manufacturers.
Competition law. Regulation (EU) 2022/720 (the VBER) exempts vertical agreements where neither the supplier's nor the buyer's market share exceeds 30% (article 3), but imposing a fixed or minimum resale price is a hardcore restriction; maximum and recommended prices remain possible (article 4(a)). The Commission's Vertical Guidelines (2022/C 248/01, paragraphs 29 to 42) place a genuine agency agreement outside Article 101(1) when the agent bears no significant contract-specific, market-specific or other risk: it does not take title, hold stock at its own cost, or answer for customers' non-payment (paragraph 33).
| Distributor | Commercial agent | |
|---|---|---|
| Title to the goods | Buys and owns them | Never owns them |
| Risk (stock, credit, price) | Distributor | Manufacturer |
| Who sets the resale price | Distributor | Manufacturer |
| Income | Resale margin | Commission |
| Protection at the end | No EU right; national law varies (statute in Belgium, case law by analogy under conditions in Germany, Austria and Spain, no statutory right in most others) | Indemnity or compensation under Directive art. 17, subject to conditions and art. 18 exclusions, not waivable in advance |
| Who the public buyer sees in the award notice | The distributor | Normally the manufacturer, as the agent is not the tenderer |
The hybrids
- Consignment. Goods sit in the partner's warehouse but remain the manufacturer's property until sold. If the partner pays for storage and stock losses, it carries a risk the Guidelines (paragraph 33(c)) say a genuine agent does not.
- Del credere agent. An agent who guarantees that the customer will pay, usually for an extra commission; in German law the guarantee must be in writing and entitles the agent to a special del credere commission that cannot be excluded in advance (§ 86b(1) HGB). Under paragraph 33(d) of the Guidelines this guarantee is a risk that can take the agreement out of genuine agency.
- Dealer in a selective system. A distributor chosen against "specified criteria" that may not resell to unauthorised distributors in the territory (VBER article 1(1)(g)). It still buys and resells for its own account.
Why it matters for a manufacturer
- Control against risk. An agent lets you set prices and keep the customer contracts, but you carry stock, credit and collection. A distributor carries those and sets its own prices.
- Cost at the end. Budget for an agent's indemnity from the first day. With a distributor, check the target country's law before signing.
- Public tenders. A contract award notice names the successful tenderer (Directive 2014/24/EU, Annex V Part D, point 12). A distributor bids in its own name, so award notices show distributors and manufacturers' own subsidiaries; an agent who only negotiates for the manufacturer is not the tenderer, so its sale should appear under the manufacturer's name. This is our reading of the roles, not a count of notices. It is also why Cresques builds its lists from award notices and labels each company's role.
Example
A furniture maker enters a new country with a part-time agent on 5% commission. Orders are invoiced by the maker, which also chases payment. After four years the maker ends the contract. In a country that chose the indemnity model, if the agent brought new customers or grew the business and an indemnity is equitable, it can claim up to one year's commission, averaged over those four years. With a distributor, any claim would depend on national law and on how far the distributor was built into the maker's sales organisation.
Related terms
- Dealer, buying group or head office
- What a distributor expects from a new supplier
- Contract notice vs contract award notice
- How to read a TED contract award notice
This page explains terms and is not legal advice; national rules and contract terms decide each case.
Questions
- What is the main difference between a distributor and a commercial agent?
- A distributor buys your goods, owns them, and resells them in its own name, carrying stock, credit and price risk. A commercial agent negotiates sales on your behalf, the contract is between you and the customer, and the agent is paid a commission.
- Does a distributor get compensation when the contract ends?
- No EU act gives a distributor a termination payment. National law decides: Belgium has a statute, while German, Austrian and Spanish courts apply agency rules by analogy only under conditions. Elsewhere there is usually no such right. A commercial agent has a statutory right to an indemnity or compensation under article 17 of Directive 86/653/EEC, which cannot be waived beforehand.
- Can I set the resale price for an agent?
- Yes, if it is a genuine agent that bears no significant financial or commercial risk. The Commission's Vertical Guidelines (paragraph 41(c)) treat the prices and conditions an agent must apply as falling outside Article 101(1). A distributor sets its own resale price; imposing a fixed or minimum price is a hardcore restriction under article 4(a) of Regulation (EU) 2022/720.
- Why do public award notices name distributors but rarely agents?
- This follows from the roles, not from a count. An award notice names the successful tenderer (Directive 2014/24/EU, Annex V Part D, point 12). A distributor tenders in its own name. An agent who negotiates on the manufacturer's behalf is not the tenderer, so the notice would normally name the manufacturer.
