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Advantages Of Exclusive Distribution Agreement

However, if there is a dispute with your exclusive distributor, then you can lose the whole market. This exclusive distributor could have very good relationships in the local market, so it will be difficult for another distributor to create the same relationships. Therefore, if there is a great controversy, it means that the distribution of exclusivity could result in huge losses, not only in terms of money, but also in terms of lost. “We see that customers who want to market and sell pharmaceuticals and medical products abroad, through distributors who buy their products and resell them in their own territory, want to choose the right path to the market,” Cheema said. But how do you find the right distributor, keep them motivated and handle potential problems that may arise? Successful distribution requires a network that provides excellent geographic coverage and ensures a good fit between your business and the distributors you work with. A distribution agreement, formalized in a clear written contract, is the key to solving these problems. Suppose Rolex needs a distributor in an area. Rolex is aware that showrooms throughout the region will reduce their brand value (the prestige associated with its brand). As a result, Rolex receives an exclusive distributor for this region.

The exclusive distributor then launched its own exclusive Rolex distribution centers and also marketed Rolex watches in distribution centers in the region`s elite neighbourhoods. A similar pattern is observed in many sectors. Similarly, in the industrial machinery segment, distribution is often attributed to distributors who sell well and have good relationships in the local market and who can focus on selling the brand more than its competitors. The use of unique distributors is also used in the industrial machinery segment. Often, exclusive distribution is allocated to distributors who are efficient distribution units and who actually make contact with the local market. These distributors are generally able to focus more on selling the brand than on the company`s competitors.