A distributor agreement is a bond between network partners that instructs the tasks of both parties. It is an agreement shared between a producer or vendor and a distributor. In some cases, more than one distributor or other personnel are also involved.
It is essential to work out that the documented agreement is exclusive or non-exclusive. In an exclusive agreement, the distributor is the only distributor with all the liability to sell the product within a particular area or in diversified regions. In a non-exclusive agreement, the vendor can opt for other distributors. If a small set of distribution outlets is covering the target markets it is termed as a selective strategy of distribution while an intensive strategy presents the product to several buyers’ via extensive distribution. The intensive strategy is more appropriate to the client- leaning items.
Key components of distribution agreement are:
- All terms and conditions
- Rights for marketing
- Specific locations involved
- Termination clauses
- Pricing terms for the distributor agreement
- Terms of payment
- Procedures related to ordering and Shipping (risk allocation, etc.) for the Distributor agreement.
- Inventory and training
- Legal approval
- Warranty issues
A well-written agreement can uplift the business outcome but it is to be kept in mind that every agreement has a life an ill agreement establishes a lawful argument which will create glitches in terms of time and finances, therefore, it is crucial to draft a well-formatted valid document to overcome any confusion.
Several online templates are readily available on the websites through which you are able to create a distribution agreement just according to your requirement. Download the appropriate agreement form and proceed further in a legal way.
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