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

Factory/manufacturers are the last places to offer a deal. They rely on distributors and stores to sell, unless they are a direct to consumer business (the holy grail but harder to achieve).

The manufacturer can outsell and undercut any distributor because they make the item. But they don’t have enough customers to make this happen, so distributors often have agreements or informal ones where the manufacturer won’t undercut the supplier in exchange for selling their product to a lot of customers