Stocking dealer

Definition

A distributor a manufacturer requires to hold agreed inventory in return for carrying the line.

Why It Matters

The arrangement is why a supply house can promise same-day parts, and it is a commitment and not a courtesy: minimum stock, sometimes minimum purchases, sometimes a territory. It binds the buyer's working capital in a way a plain purchase agreement does not, and it usually needs the manufacturer's blessing to continue after a sale. Read every stocking agreement for its minimums and its termination notice, and ask what the house would have to buy in the first year to stay in good standing.