A professional distributor has the potential to greatly increase sales. When entering into a contract, the distributor can agree to purchase the product at his expense and sell it on his own behalf. Therefore, the distributor will act as an independent merchant.
Depending on the chosen type of business, this person will make a purchase of goods or services from the supplier and then sell them as a wholesaler to retailers or as a retailer.
The manufacturer of the product has the ability to outsource sales to several distributors that may be located in different places. These people most often have good knowledge and skills in their target markets.
Distributor agreement: basic principles
A distributor agreement is a legal deed that establishes certain terms of cooperation between a supplying company and an organization that sells and distributes goods or services.
As a distributor, a person enters into a relationship with suppliers in order to sell their products as a wholesaler afterward. It is very important to know and understand the key terms of such an agreement. However, they can vary depending on the following factors:
- the products to be sold;
- the exclusiveness of the intended use;
- territory;
- terms of remuneration;
- terms of the agreement.
It is also very important to include the provisions stipulating the party responsible for marketing and how to handle any disputes that may arise.
The distribution agreement should have a clear clause that explains the plan for receiving payments. For example, it could be a sales commission. A suitable structure is one that depends on the product being sold.
When creating a business plan, it is important to consider the regulations and rights available to distributors in New Zealand. This is because some industries in this country are strictly regulated, in particular, the healthcare industry, vehicle trade, and financial industry. Such rules include the transfer of all data between territories, minimum warranties on products and their importation, as well as other local rules or regulations in other industries. To have a clear understanding and make sure that the rules are not being violated, it is recommended to discuss the laws and requirements with a lawyer.
In addition to the above rules, it is a good idea to become closely acquainted with any barriers to entry into the industry. This will help determine a plan for dealing with strong competition and geographic obstacles.
It is very important to maintain good communication with partners and to have multilateral connections. This will enable you to reach out to reputable people on any issue, discuss customer concerns, and share insights and opinions about your competitors’ performance.
Drafting a distribution agreement with Pandadoc
The Pandadoc platform exists for the competent generation of a distribution agreement. It is a reliable assistant to work with many documents, such as contracts, agreements, deeds, and others.
The platform enables you to find a distribution agreement template and figure out what such a document is about. The convenient and user-friendly interface provides you with the capability to quickly find the required information. If you have any questions, you can always contact technical support.
Thanks to the distribution contract sample, you can quickly add the necessary items and fields. For this purpose, the website offers a number of special tools. With their help, you can draft correct and unique documents. By buying one of the packages, the user gets access to additional features on the platform.
