To give permissions to a distributor, you assign them as a license manager, and allow them to create their own orders, and add license managers to that order, who will act as resellers.
Adjusting To Assign Distributor Permissions
When they log in to the user portal, there will be a few changes:
A new tab in the left will allow them to create a new order.
On an order detail a new "License Managers" tab will appear, where they can use it to add new license managers to an order (such as a reseller).
Create Orders through the Distributor Portal
Defining a Reseller
Resellers are license managers who are allowed to issue new licenses within orders they have been assigned to, but are not allowed to create new orders.
Adding License Manager
You can then set which products and which license policies for those products the reseller is allowed to issue licenses for.
Select Products and License Policies
Add Products and Select Enabled License Policies
When the reseller logs in to the user portal, they will be able to issue new licenses for orders they have been assigned to: