Yesterday I was speaking with my uncle. He said that the distributor benefits the most. BULLSHIT,
earn the most.
The one who benefits the most and has got the best for himself is the founder (producer).
Why? Look at the graph (sorry, for my bizarre drawing, but you would get the point). Yellows are distributors. Some of them take directly from the producer, rest is taking from the distributors (yellow, those who take directly from the producer). Look.
Distributors have got limitations to their local environment (range). They could ship product worldwide, but there is competition. Imagine that can buy identical product in the local shop, let's say a bear. You would not order it by shipment (it applies to other products too). The same - if product is available in your country you would not like to pay for the
shipment from another country (sometimes if the range of price is huge, but in some cases you must remember about the customs).
As a producer you've got better, because you don't need to sell the product and have got unlimited (or limited) number of distributors who take from you the product. See: coca-cola or red bull producer.
If you've got only 1 shop, not something like TESCO who works globally being a producer is the best option.
Another situation could appear if you've got limited production and demand. For example taking 10kg of mephedrone from producer which has a capability 10kg / week produces a much higher profits for the distributor.
Read it one more time, if you didn't understand. You would, but read it carefully. I've explained it to my uncle – he changed his mind.
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