The Difference Between a Broker and a Distributor (And Why Confusing Them Costs Brands Money)

Two Different Jobs. Two Different Partners.

The broker and distributor confusion is one of the most common structural mistakes in CPG retail. It shows up in contracts with misaligned expectations, in conversations where brands blame the wrong partner for the wrong problem, and in retailer relationships that deteriorate because nobody was clear on who was responsible for what.

Getting this straight early is not a minor detail. It shapes how you structure your go-to-market, how you allocate resources, and how you hold your partners accountable. If you are building a retail strategy without a clear picture of how these two roles divide the work, you are operating with a meaningful blind spot.

What a Distributor Does

A distributor is a logistics and fulfillment partner. Their core function is physical: they buy product from you, warehouse it, and deliver it to retail accounts within their network. They own the inventory during that process, which means they carry the financial risk of holding your product until it moves to stores.

Distributors manage the supply chain between your production facility and the retailer's back door. They handle delivery schedules, manage the financial relationship with the retailer on invoicing and payment terms, and maintain the operational infrastructure that gets product from a pallet in a warehouse to a shelf in a store.

What distributors do not do is sell your product. They move it. That is an important distinction. A distributor getting your product into their network does not mean it will end up on the shelf of any specific retailer. Distribution authorization and retail shelf authorization are two separate things, and brands that conflate them often discover their product is sitting in a warehouse with nowhere to go.

What a Broker Does

A broker is a sales and relationship partner. Their core function is commercial: they represent your brand to retail buyers, work to get your product authorized for shelf placement, and manage the ongoing retailer relationship on your behalf. If you want a full picture of what that responsibility includes, see What a Food Broker Actually Does.

Brokers do not own inventory. They do not warehouse product. They do not handle delivery. What they do is open the commercial door. They call on buyers, present your product, negotiate promotional programs, track category reviews, and advocate for your brand in a retail environment where buyer attention is scarce and competition for shelf space is constant.

A broker's value is measured in relationships, authorizations, and sustained retail performance. Not in cases shipped.

Where the Confusion Happens

The confusion usually starts with distribution. A brand lands a distribution agreement with a regional or national distributor and assumes the hard work is done. The product is in the network. Stores should start ordering it. That assumption is wrong, and it is expensive.

Distributors sell into their network based on demand signals from retailers. If a retailer has not authorized your product for their planogram, their buyers are not placing orders, and your distributor has no reason to push it. Product sitting in a distribution warehouse without retail authorization is inventory at risk. It generates carrying costs, it has a shelf life, and if it does not move, it comes back to you.

Brands that believe distribution equals placement spend months waiting for orders that never come, then blame the distributor for not selling their product. The distributor is doing exactly what they are supposed to do. The missing piece is the retail authorization that a broker should have secured before the product ever entered the distribution network.

The Right Order of Operations

Understanding how brokers and distributors work together clarifies the correct sequence for building retail distribution. Retail authorization comes first. Distribution follows.

A broker secures the authorization from a retail buyer. The retailer agrees to carry the product, assigns it a slot in their planogram, and communicates that demand to their distribution partners. The distributor then has a reason to stock, deliver, and replenish the product because there are stores ordering it.

When brands reverse this sequence, entering distribution first and hoping retail authorization follows, they are building on an unstable foundation. Before you enter any new retail channel, review the Retail Launch Checklist to make sure authorization, distribution, and inventory are all aligned before day one. Some distributors will work with their retail contacts to help push new items, but that is not their primary function and should not be the strategy. It is a secondary benefit at best.

Holding the Right Partner Accountable for the Right Things

One of the practical consequences of this confusion is misplaced accountability. When retail performance is weak, brands often direct their frustration at the wrong partner.

If your product is authorized at retail but out of stock consistently, that is a distribution and replenishment problem. Your distributor and broker should both be involved in resolving it, the broker advocating at the retailer level and the distributor managing the logistics.

If your product is in the distribution network but not getting authorized at new retail accounts, that is a broker problem. The commercial relationship is not producing the authorizations it should.

If your velocity at authorized accounts is weak and retailers are questioning whether to keep the item, that is a brand and marketing problem, and no broker or distributor can fix it for you. Products have to sell through. Read What Is Retail Velocity to understand exactly what buyers are measuring and what the thresholds look like in practice.

What to Ask Both Partners Before You Sign

When evaluating a broker, ask them which distributors they have established working relationships with in your target market, and how they coordinate with distributor reps to support new item sell-in. A broker who cannot answer that question clearly is missing a critical part of the picture.

When evaluating a distributor, ask them what their process is for new item introductions and how they communicate with brokers representing brands in their network. A distributor who treats brokers as irrelevant to their process does not understand how retail actually works.

The best retail outcomes happen when brokers and distributors operate as coordinated partners with clear lanes, not as independent contractors working in parallel with no shared visibility.

How JDALL Approaches This

JDALL operates as the broker in this equation. We manage retailer relationships, secure authorizations, track promotional calendars, and advocate for every brand in our portfolio at the buyer level. We work closely with distributor partners across the Gulf South to ensure that once a retail authorization is in place, the supply chain behind it is aligned and ready.

If you are building your retail strategy in the Gulf South and want to understand how brokerage and distribution should be structured for your specific situation, contact us. We will give you a direct answer based on your product, your target accounts, and what we know about the market you are entering.