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Best Practices for Negotiating Distribution Agreements What Should a Distribution Agreement Include? ... Don't Make Exclusivity the Goal. ... Focus on Marketing Essentials at First. ... Identify Aftersales Requirements. ... Set Clear Sales Territories. ... Outsource Regulatory Obligations. ... Not Having the Document Reviewed By Multiple People.
Distribution is exclusive when only certain retailers are given the option of carrying a product in its store. Exclusive distribution is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographical area to carry the supplier's product.
A common example of exclusive distribution is automobiles. Automobiles are distributed through exclusive distributorship, meaning that each distributor is the only one authorized to sell a particular make of car within a specified territory.
Disadvantages of Exclusive Distribution Agreements This can sometimes be difficult when the supplier has generated an order through its own efforts. An exclusive agreement is often for a minimum of a year ? a lot can change to both companies in this period which could have a negative effect on sales.
Seek mutual value. The ultimate goal of negotiating exclusivity is to create a win-win situation, where both parties feel satisfied and respected. To achieve this, you need to seek mutual value, by identifying areas of agreement, finding creative solutions, and making trade-offs.