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Exclusive distribution agreement Sometimes, the distributor is the only distributor of the supplier's product within a specific geographical area. In other exclusive agreements, the distributor has the sole authority to sell the product to certain customers, meaning no other distributor can sell to those customers.

Let's use the laptop computer as an example. The distribution channel for a laptop can include the manufacturer, who produces the laptop, a distributor who warehouses and ships the laptops to retail stores, and retail stores who sell the laptops to the final customer.

Below is a basic distribution agreement checklist to help you get started: Names and addresses of both parties. Sale terms and conditions. Contract effective dates. Marketing and intellectual property rights. Defects and returns provisions. Severance terms. Returned goods credits and costs. Exclusivity from competing products.

An exclusivity clause grants exclusive distribution rights, exclusive licenses and other exclusive rights. It can also be an obligation to purchase all of a party's requirements for a product or service from the other party and prohibitions against selling products or services to competitors.

By contrast, selective distribution involves selling products at select outlets in specific locations. For instance, Sony TVs can be purchased at a number of outlets such as Circuit City, Best Buy, or Walmart, but the same models are generally not sold at all the outlets.

Exclusive Distribution Strategy Example Only having a few distributors protects brand equity by keeping the right amount of supply and demand in a specific area. An example of exclusive distribution would be if a luxury brand like Apple chose only to offer its newest Apple Watch at Best Buy locations.

Exclusive distribution is a level of product availability that limits the choice of outlets that customers can use to find our product or buy our product. One of the reasons we do this is to preserve our product or brand image.

For example, a brewery that brews its own beer and sells it to customers at its own brick-and-mortar location employs a direct channel of distribution. The seller delivers the product or service directly to customers.