A Mutual Fund distributor is a person who act as a middleman between investors and Asset Management Companies (AMCs), facilitating mutual fund transactions. The distributor earns income through commissions paid by AMCs, typically deducted as a small percentage from the invested amount. For example, when investing ₹1000 through a distributor, the AMC deducts ₹10 as commission, leaving the initial investment at ₹990. Conversely, investing directly in mutual funds bypasses distributor involvement and commission payments, allowing for an initial investment of ₹1000 and potentially higher returns compared to regular fund investments.