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I was trying to contact the manufacturer of a building product. He told me he wouldn't sell it to me and that I needed to go through their licensed distributor. I called the distributor and he agreed to get me the product.

Now, I noticed that the distributor typically works on a contractor basis. This means that he doesn't sell directly to the customer, but acts as an installer. His clients typically order the service to install the product. However, he was fine with me buying the material and installing it myself.

I was wondering if I could have an e-commerce website where I would sell the product directly to the end customers. I would still fulfill the purchase by buying from the distributor, although they would ship to the end user.

This way, DIYers could purchase it directly without the need to talk to the distributor. I do realize I would need to handle the returns, but my question is: is it legal without consulting it with the distributor?

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There is nothing illegal with doing this (absent specific contractual terms or industry regulations to the contrary in particular cases, e.g. in the case of export controlled high technology products).

This is called operating a wholesale business or operating as a broker. Lots of legitimate legal businesses have this business model.

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  • Why manufacturers don't want to ship to the end users but choose to license distributors? They still need to ship their products either way.
    – Grasper
    Commented Jan 24, 2023 at 20:52
  • @Grasper The reasons are economic and "political" (in the non-governmental politics sense) rather than legal. If you sell mostly to distributors and then you make a sale direct to a consumer, it looks like you are double crossing you main distributor buyers who lost the sale to the manufacturer. The distributors don't like that.
    – ohwilleke
    Commented Jan 24, 2023 at 20:54
  • Does it cost money to become a distributor? How will I convince manufacturer to let me distribute/sell their product?
    – Grasper
    Commented Jan 24, 2023 at 20:56
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    @Grasper That's a separate question, but usually (barring again any regulations or the like on restricted materials), you buy in bulk. In addition to ohwilleke's point, it can be better economics for a manufacturer to sell to a distributor than a consumer: Distributors tend to order in lots, which means money sooner, have less hassle with returns/problematic customers, don't have to advertise as much, and only have to deliver to one location.
    – sharur
    Commented Jan 24, 2023 at 20:57
  • @Grapser "Does it cost money to become a distributor? How will I convince manufacturer to let me distribute/sell their product?" Whatever you and the manufacturer agree upon is what controls. It is up for negotiation.
    – ohwilleke
    Commented Jan 24, 2023 at 21:03

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