What is a Distribution Agreement

What is a Distribution Agreement

The basis of any successful distribution activity is a properly executed distribution agreement. This is a document that is concluded between the company, which manufactures the products and a company or an entrepreneur that will be appointed to be its official representative for the promotion and sales of such products 

The distributor is endowed with the exclusive right to sell and represent a particular product in a certain market. Most often, such a document is a brokerage document. In addition to the distribution agreement template, the distributor also needs to have a brand certificate, as well as certificates, licenses, and other documents, which are necessary to confirm the power to distribute the products. 

Specifics of drafting a distribution agreement

Most often this document is signed between the manufacturer and the business entities. However, there is also the possibility of signing a document with an individual (most often in the case of network marketing). 

As a rule, the term of such an agreement is several years, and it can also be automatically renewed. In most cases, the distribution contract sample has the following conditions stipulated:

  1. Exclusive right to represent the company in the assigned region.
  2. The boundaries of the territory where the distributor acts as the company’s representative and promotes its products.
  3. The name of the brand, as well as the list of the company’s products or the whole range of goods manufactured by it, which the distributor is authorized to represent.
  4. Establishment of a network for sales of the products. The contract should clearly stipulate the powers of the distributor. 

The pricing policy is usually set by the manufacturer. The manufacturer should provide the distributor with the relevant price lists. As a rule, this provision is also included in the contract.

The document also describes terms and conditions applicable to the use of the manufacturer’s trademark. Particular attention should be paid to the paragraph on the sale of products. In most cases, the handover of products without advance payment or with a partial downpayment is stipulated. As a rule, the manufacturer already has its own sample of the agreement, however, some clauses can be amended or replaced in it. 

What makes it advantageous for companies to cooperate with PandaDoc?

PandaDoc is a company that develops software for electronic document management. This type of document flow has many advantages, so it is quite actively implemented by the managers of many enterprises today. 

The development of digital technologies nowadays makes it possible to use this type of document management in many areas of business activities. Such documentation may be used inside the company for internal workflow, as well as for external operations because electronic papers have the same legal force as their hard-copy analogs. Also, this format can be used to participate in tenders. 

The main advantage of this kind of paper is financial savings because in this case there is no need to buy paper or office equipment for printing documents. The delivery of electronic correspondence is also much cheaper than paper correspondence, and it is also several times faster, which makes this solution extremely efficient. 

Furthermore, every document drafted and processed in electronic form is automatically registered in the archive. Thus, it can be easily restored even after its accidental or intentional removal. It is very convenient to work with documents in this format because there is round-the-clock access to them from any place where there is an Internet connection. It can be accessed by several users at once, and such an option as a digital signature enables users to approve the documents in remote mode. PandaDoc also ensures safe and reliable storage of all the documents. 

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Noor Ul Huda

About the Author: Noor Ul Huda

Noor Ul Huda Naeem is a Computer Science student. She is also a blogger focused on Meaningful & Core-Bases Youth Development of her country particularly in the domains of Technology, Entrepreneurship, Self-Awareness, Education & Relationships.

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