To create a distributor, all you have to do is create a contact with the type distributor.

 

From the CON menu at the top of your page, click CREATE CONTACT and change the contact TYPE to DISTRIBUTOR. Enter a contact name (optional for distributors), company name, email (optional for distributors), and phone number (optional for distributors), and click ADD CONTACT.

Now this distributor should appear in your invoice and order drop menus.