As your business grows, you may want to identify new distribution channels and expand your sales locally or even into new countries. In this situation, many business owners consider agreeing on a distribution agreement with another company. This article will explore the advantages and disadvantages of distribution agreements so you can make the best choice for your business. <\/p>\n\n\n\n
Distribution arrangements usually involve a supplier or manufacturer offering goods for another company (the ‘distributor’) to sell for them. There are three common forms of agreements for distributors<\/a>. These include:<\/p>\n\n\n\n There are some key benefits associated with using a distribution agreement.<\/p>\n\n\n\n The distributor may have better knowledge and contacts within a particular market than your company. For example, let us say that you manufacture PC monitors and wish to expand into France. Your company may save time and money using a distributor. Rather than establishing a base in France, you can allow the distributor to handle marketing, post-sale support and repair services. <\/p>\n\n\n\n As such, distribution agreements are a relatively low-risk way of entering new markets and territories. If your company achieves good sales in that country, your organisation might consider selling goods there directly in the future.<\/p>\n\n\n\n A degree of risk passes to the distributor under a distribution agreement. For example, say your distributor purchases 300 printers from your company but can only sell 150. In this instance, the distributor will still own all 300 and cannot return them to your company. Therefore, the distributor is motivated to sell its stock of goods and return with decent sales figures. It also provides your company with some financial certainty regardless of end sales.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
Key Benefits of a Distribution Agreement<\/h2>\n\n\n\n
1. Knowledge and Contacts<\/h3>\n\n\n\n
2. Distributor Assumes Risk<\/h3>\n\n\n\n