Distributor, Reseller or Agent: What's the Difference?

"Distributor", "reseller" and "agent" are often used interchangeably when a business is looking for a partner to sell its products on. But the three roles aren't the same, either legally or commercially — and that has a direct impact on which agreement you should enter into.

Short answer: A distributor or reseller buys the goods from you and resells them in their own name and for their own account — they bear the risk of inventory and sales themselves. An agent, on the other hand, sells in your company's name and on your behalf in exchange for commission, without ever owning the goods. The difference determines, among other things, who bears the risk, how you invoice, and which legislation applies to terminating the relationship.

Distributor and reseller: own name, own account

The distributor (sometimes called a reseller, especially at the retail level) buys the products from you at a wholesale price and resells them for their own profit. The distributor owns the goods from the moment they take possession, and bears the risk themselves if the goods can't be sold. That's the model our exclusive distribution agreement is built around — an exclusive right to a specific territory in exchange for an obligation to actively sell the products.

Agent: selling on your behalf, for commission

An agent doesn't enter into agreements in their own name, but instead facilitates sales on behalf of your company — typically for an agreed commission on what's sold. The agent never owns the goods and doesn't bear inventory risk. In return, agency relationships in Denmark are regulated by the Commercial Agents Act, which, among other things, gives the agent a right to compensation on termination under certain conditions — a rule that doesn't apply to distributors.

Why the difference matters to you

• Risk: With distribution, inventory risk sits with the distributor; with an agency, it stays with you.
• Price control: You can't legally dictate the distributor's resale price (competition law rules), but you typically set the price yourself when an agent sells on your behalf.
• Termination: The Commercial Agents Act gives agents a potential right to compensation on termination — that generally doesn't apply to distributors, unless you've agreed it yourselves.

Which agreement fits you?

If you're looking for a partner who takes on the risk themselves and invests in building a market, a distribution agreement is often the right choice — see our free exclusive distribution agreement. If you'd rather keep tighter control over price and the customer relationship, and are willing to bear the inventory risk yourself, an agency agreement may suit you better. If you're unsure, create a partnership listing and describe what you're actually looking for — so potential partners can propose the model that fits best.