We are all sometimes afraid of asking questions for fear that our fellow workers know the answers and will be surprised and concerned that we don’t. But often we’re all a little unsure and don’t dare ask what we often wrongly believe is a ‘silly question’. However, there is a saying that goes, ‘the only silly question is the one you didn't ask.’ For anyone in the workshop business, new or experienced, who isn't 100% sure of the difference between a Manufacturer, a Distributor and a Wholesaler, here's a handy guide. Even if you do know the difference between these roles, there may be some insights here that add to your understanding of how the automotive aftermarket supply chain works.
Who Does What?
Vehicle manufacturers depend on OEMs (Original Equipment Manufacturers) to supply the parts required to build a new vehicle. These OEMs are not just the suppliers but also the designers of the first parts that are fitted in the new vehicles. For example, if Ford uses, say, Autolite spark plugs, Exide batteries and Ford's own engine blocks and heads when building a car, then car restorers and collectors will consider those components to be the OEM parts. Some of these OEMs, such as TRW, also produce parts for the automotive aftermarket so that workshops can fit vehicles with parts that are made with the same high standards and expertise that created the original parts.
But how do these parts reach the workshop? What is the supply chain? And among Parts Manufacturer, Distributor and Wholesaler: who does what?
All replacement parts that are produced for the automotive aftermarket need to be distributed to the workshops so that they can be used to perform repair and maintenance jobs. The distribution of automotive parts is a specific job performed by a relatively small number of major operators. The process demands the expertise and capability of large organizations that specialize in product assortment and logistics.
These major operators are the key players in the distribution chain and they have massive purchasing power. Major distributors operate on a large scale and employ large numbers of people. Typically they will use one main supplier (manufacturer) and one secondary supplier – and possibly one ‘challenger’ supplier. The supplier they choose to buy their parts from will be selected on price, availability and reliability. The brands that are selected by major distributors are the ones that offer premium quality and wide coverage, which helps them to drive their business.
As an installer it’s possible that you buy your parts from a distributor, although you could also purchase them from a wholesaler (see below) if that is easier for you. Independent distributors may also sell parts to major commercial end users, such as multi-brand repair shops, roadside patrol operators, fleet owners and major retail companies such as supermarket chains. Specialized repairers and fuel stations may also be among their customers, and there an increasing trend for distributors to sell direct to end consumers (typically via their website).
Now the wholesaler comes in. Independent parts wholesalers are the organizations that are equipped to provide an efficient delivery of replacement parts throughout a supply network. Their task is to meet the needs of workshops by providing “the right part – for the right price – at the right time”. Just-in-time delivery is crucial to meet the needs of end users, which is to have their vehicles quickly repaired and back on the road as soon as possible.
A main difference between a wholesaler and a distributor is that wholesalers do not establish a business relationship with the product manufacturer – they instead establish a relationship between a distributor and an installer (you). Wholesalers are typically small-scale operators (even if part of a larger franchise) and so are often highly skilled and knowledgeable – their success depends on how well they manage logistics. Independent wholesalers will distribute an extended variety of replacement parts of all brands, ranging from original spare parts and parts of matching quality to parts of higher quality or parts adapted to the age of the vehicle.
Let’s finish with a word on you, the installer. Installers are the men and women that fit our products every day. They may be new to their roles, or highly experienced mechanics, and may not always be aware of the full range of products and services provided by an OEM. At TRW, we continually work to enhance our parts and communicate the wide coverage and quality we offer – we allow you to fit fast and fit well, every time, and to keep your customers satisfied. We understand what installers need, we know you and we enjoy working with you; we know that you are all True Originals, just like us.
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