how certain distrubutors can sell cheaper than the factory or manufacture price

Question

I recently found a car that a distributor sells cheaper than the official company. How can the distributors in genral afford this decision financially?

In: 69

Answer 1

Manufacturers don’t want to undercut their distributors. If they sold direct to customers for less than distributors, their distributors would be pissed (and manufacturers need them to handle the logistics of getting their products to consumers).

Manufacturers may offer their products direct to consumers at a higher price than their distributors because the higher profit makes it worth their while, and it doesn’t happen often enough to cut into their distributors’ business.