WHAT IS A DISTRIBUTION AGREEMENT?

A Distribution Agreement is a commercial contract between two or more parties: the supplier and the distributor. The contract provides the terms the terms and conditions in which the distributor will receive and have the ability to distribute the supplier’s goods and or services to customers.

WHEN DO YOU NEED A DISTRIBUTION AGREEMENT?

A Distribution Agreement is needed when the manufacturer or vendor requires assistance to create a marketing strategy for providing goods to specific regions or cluster of regions. A single vendor would not be able to complete is marketing and sales goals with services.

WHAT IS INCLUDED IN A DISTRIBUTION AGREEMENT?

The following should be included in a distribution agreement:

• The names and contact information of the parties.

• The amount of the sign on fee.

• The duration of the agreement: How long will the distributor be able to distribute the goods and or services.

• A specific description of the good and or services that will be basis for the agreement.

• The payment terms which clearly explains how the distributor must pay the supplier for the right to distribute the goods.

• The assigned area or territory in which the distributor will have the right to distribute the goods and services including whether the distributor will have exclusive use of and access the territory.

• Clear and cogent information explaining the steps for renewal or termination of the contract.

• Marketing and Reporting requirements can also be included in the agreement.