Tennessee Value Added Reseller Distribution Agreement
Description
How to fill out Value Added Reseller Distribution Agreement?
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FAQ
Similar to a distributor, a reseller sells your products to customers. However, the main difference between a distributor and reseller is the lack of warehousing. Resellers won't purchase or hold your inventory.
Distributors consist of order takers, and generally lack real product knowledge. On the other hand, there are VADs, which provide a broad range of products, stock inventory, operate their own warehouse(s), supply credit to re-sellers, and have dedicated sales teams trained in understanding your products.
From there, the reseller takes care of the business operations and customer relations so that the vendor doesn't have to. The value-added aspect of the process means that the reseller adds additional features or services to the product before selling it to the end user.
The distributor agreement must include the sales targets that the distributor has to achieve in the given period. This sales target has to be well thought out and agreed upon by both parties. The agreement should also have a clause for what happens in case the sales targets are not met by the distributor.
As the name suggests, a Value Added Distributor (VAD) offers supplementary services & solutions that deliver extra value to clients in addition to the pick, pack & ship services for the products they sell. In contrast to distributors, VADs generally offer additional support besides delivering the product or service.
How Distribution Agreements Work Set an appointment with the manufacturer. Negotiate the distribution terms. Review specifics, such as promotional literature. Hire a business lawyer to help you draft the terms. Sign or renegotiate the contract. Begin executing the agreement as contained within provisions.
VARs are frequently referred to as trusted advisors, and many seek to establish long-term relationships with their customers. VARs only mark up a product a small amount; their revenue typically comes from the value-added products and services.
While similar to distribution agreements, reseller agreements differ in the way the product reaches the consumer. Unlike distributors, resellers don't purchase and store your product, ready to sell. Instead, they act as a middleman, taking a commission when they sell your product to a customer.