Product Distribution Agreement Generator

What is a Product Distribution Agreement?

A Product Distribution Agreement is a contract between a manufacturer or supplier (supplier) and a distributor that outlines the terms and conditions for marketing, selling, and distributing products to retailers or end customers. This agreement establishes the distribution territory, exclusivity terms, pricing structure, order and delivery procedures, performance requirements, and intellectual property usage rights related to the distributed products.

Key Sections Typically Included:

• Appointment and Authorization Scope
• Territory Definition and Exclusivity
• Product Lines and Specifications
• Pricing and Discount Structures
• Minimum Purchase Requirements
• Order Processing and Delivery Terms
• Payment Terms and Credit Limits
• Marketing and Promotion Obligations
• Sales Performance Targets
• Intellectual Property Usage Rights
• Training and Support Services
• Warranty and Returns Procedures
• Compliance with Laws and Regulations
• Inventory Requirements
• Term and Termination Conditions
• Post-Termination Rights and Obligations
• Non-Compete and Confidentiality Provisions

Why Use Our Generator?

Our Product Distribution Agreement generator helps suppliers and distributors create a comprehensive document that clearly establishes the parameters for a successful distribution relationship. By defining territories, performance expectations, and support obligations upfront, both parties can build a partnership that effectively brings products to market.

Frequently Asked Questions

• Q: How should distribution territory and exclusivity be structured?

  • A: The agreement should clearly define the geographic territory with precise boundaries, specify whether the distribution rights are exclusive, non-exclusive, or sole, and establish any product line limitations within the territory. It should address whether the supplier can sell directly to certain customers within the territory, outline conditions for territory expansion or reduction based on performance, and specify any reservation of rights for specific customer segments. The agreement should also establish restrictions on selling outside the assigned territory, outline consequences for territory violations, and detail procedures for handling customer inquiries from outside the territory. It should address the supplier's ability to appoint additional distributors in adjacent territories and specify how internet and e-commerce sales are treated with respect to territorial restrictions.

• Q: How should pricing, ordering, and inventory requirements be designed?

  • A: The agreement should clearly establish the wholesale pricing structure and discount schedules, outline procedures and timing for price changes, and specify volume-based incentives or rebate programs. It should detail the order submission process and requirements, specify minimum order quantities and frequencies, and establish lead times and delivery terms. The agreement should also address inventory requirements including minimum stock levels for different products, outline requirements for maintaining adequate facilities and handling, and establish reporting obligations for inventory status. It should specify payment terms including credit limits and security requirements, outline the procedure for handling product shortages or allocations, and address procedures for returns, damaged goods, and warranty claims. It should establish responsibilities for transportation costs and risk of loss.

• Q: What performance standards and marketing requirements should be included?

  • A: The agreement should establish specific sales targets or quotas for the distributor, outline evaluation periods and consequences for not meeting objectives, and specify any market penetration requirements. It should detail marketing and promotion obligations including required expenditures or activities, address cooperative advertising programs and cost sharing, and outline approval processes for marketing materials using supplier branding. The agreement should also specify requirements for participating in trade shows and industry events, establish obligations regarding sales staff training and certification, and outline requirements for maintaining adequate customer service levels. It should address after-sales service responsibilities, detail product display requirements at distributor locations, and establish reporting obligations for market conditions and competitive activities. It should outline any restrictions on carrying or promoting competing products.