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Define Exclusive Distribution Agreement

If there is an exclusive distribution agreement between a manufacturer and a distributor, the manufacturer is not allowed to sell the product to other distributors, with the exception of the exclusively authorized distributor. Similarly, a distributor who is granted an exclusive right to distribute products from a manufacturer is not allowed to market or sell the products of the manufacturer`s competitors. Availability – An essential feature of exclusive distributors is that they are financially capable of storing a huge amount of inventory. As a result, it is easy to reach distributors and wholesalers, which allows for increased distribution. Rolex is satisfied with the result of ordering from an exclusive dealer. It therefore chooses to do the same with a second region. But this time, Rolex has the option to maintain the first exclusive dealer it used for the previous region or to appoint another distributor for the new region. Today, Rolex is satisfied with this exclusive sales concept and repeats it when it wishes to enter the B region. Rolex could use the same distributor as Region A or assign the exclusive sale to another distributor. However, since Rolex does not want to water down the value of the brand, rolex will not enter the region directly and will not hire too many distributors, which will allow it to have a “premium” positioning and an “exclusive” positioning of the brand.

Among the themes to be taken into account in a distribution agreement are: a similar model is observed in many different 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. As you can see, there are several advantages to exclusive distribution and, to date, there are many companies that use exclusive distribution for good effects. However, it must be said that this type of distribution is so good that the product is in average demand. Once the product has a massive demand, exclusive distribution becomes difficult and you enter into different types of agreements with different distributors. The EDA is structured so that the conditions under which the distributor has the right to resell the supplier`s products are defined in the EDA, while the terms of purchase of the supplier`s products by the distributor are governed by the supplier`s general terms of sale (CG).

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