The manufacturer or seller must also determine whether the distribution agreement is exclusive or not. In an exclusive agreement, the designated distributor is the only distributor with the right to sell the product within a given geographic region or in more than one region. If the agreement is not exclusive, the manufacturer or seller may supply other distributors who sometimes compete in the same market. In addition, the manufacturer or supplier must decide on a distribution strategy when considering the type of agreement to be concluded. A selective strategy requires a small group of distributors to cover the channel partner`s target markets. An intensive strategy aims to put the product in front of as many potential buyers as possible through wide dissemination. The latter point generally applies to consumer-oriented products rather than products developed for commercial markets. Distributors, such as retailers or value-added resellers (VARs), buy goods from distributors who then sell them to their end customers. In the distributor-dealer relationship, the distributor acts as an intermediary between a supplier and a distributor.
This relationship presupposes a contractual agreement different from that described above. Below is a checklist of factors to consider when designing a distribution agreement: the fundamental elements of a distribution agreement include duration (period for which the contract is in effect), delivery terms, and sales areas covered by the agreement (regions within the United States and/or international markets). As a general rule, a distributor agreement defines the conditions of sale of the products purchased by the distributor, the obligations and liabilities expected of the distributor and the circumstances in which the contract can be terminated. A negotiation contract also makes it possible to fix the means of payment, the date of delivery and the extent of the merchant`s territorial rights. A distribution contract can be international. The largest electronics and IT distributors, including Arrow Electronics, Avnet, Ingram Micro, and Tech Data, operate subsidiaries in a number of countries for wide geographic coverage. . . .