What is a dealer

Dealership is a common professional field in modern society. But who is a dealer, and what is the purpose of the activities he carries out is an ambiguous question, since the word “dealer” may have different meanings depending on the context.

The word "dealer" is of English origin and stands for agent, trader. This term refers to two unrelated types of economic activity. First of all, the dealer is an individual or legal entity who purchases goods in bulk from the manufacturer and then sells them in retail. In our country, dealerships are most common in the automotive and cosmetic industries. The dealer promotes goods or services in the local market. A sales dealer enters into a contract with a manufacturing company, and then on their own brings the goods or service to customers. Moreover, this form of cooperation is extremely beneficial for both parties: the manufacturer increases sales, develops new markets, and the dealer, without producing anything at all, can receive high profits. The dealer’s profit consists of the difference between the retail prices at which he sells a product or service and the purchase prices. Also, the dealer is an investor who is a professional participant in the securities market and makes transactions on his own behalf and at his own expense. According to the legislation of the Russian Federation, only a legal entity can be a dealer. The dealer must carry out exchange activities on the basis of a license. The peculiarity of dealer trading in the stock market is that the dealer publicly announces the prices and terms for the purchase / sale of securities and assumes obligations to fulfill the agreed conditions for each specific transaction. The activities of an exchange dealer are difficult for people who are not connected with the stock market to understand. Dealers in our country can combine their activities with brokerage. The dealer’s goal is to buy securities cheaper and sell them at a higher price, acting in their own interests or in the interests of the client. The profit of an exchange dealer is made up of paid consulting, commissions and spread. Spread is the difference between the purchase and sale prices of securities.