Getting the right to sell.
WHAT A DISTRIBUTION AGREEMENT ESTABLISHES
What products you may sell In what territory On what terms Whether it is exclusive What targets apply How it ends
WHAT EXCLUSIVITY PROVIDES
Protection from other distributors in your territory.
WHAT IT REQUIRES
Targets, usually, and investment in the territory.
WHAT TO ESTABLISH
What happens if targets are missed.
WHY
It is usually loss of exclusivity or termination.
WHAT TO NEGOTIATE
Targets you can realistically achieve.
WHY
Accepting inflated targets to win the agreement guarantees failure.
WHAT TO ESTABLISH ABOUT TERRITORY
Its boundaries, precisely Whether the supplier may sell directly into it Whether other distributors may sell into it
WHY THAT SECOND POINT MATTERS ENORMOUSLY
A supplier selling directly to your largest customers destroys the arrangement.
WHAT TO ADDRESS
Which customer types are yours and which are theirs.
WHAT TO ESTABLISH ABOUT PRICING
Your buy price and how it changes Whether recommended resale prices apply What margin is expected
WHAT TO ESTABLISH ABOUT SUPPORT
Marketing support Training Returns of damaged or unsold stock What happens to stock on termination
WHY THAT LAST POINT
Termination leaving you with unsaleable stock is a serious loss.
WHAT TO NEGOTIATE
Buy-back of stock on termination.
WHAT TO ESTABLISH ABOUT TERMINATION
Notice, both ways, sufficient to recover investment.
WHAT TO HAVE REVIEWED
Any agreement of substance.
