Distributor Agreements

A distribution agreement is a contract that outlines the relationship between two businesses. One is a manufacturer and the other is the distributor. The relationship is characterized by the manufacturer making a specific product, then hiring a distributor to deliver to product directly to the consumer.

An example of this would be a vitamin product. Vitamin Corporation A creates a new vitamin that promises to revitalize the skin and reduce the number of signs of aging. While Vitamin Corporation A can sell its product directly to consumers over the internet, it will have a much broader client base by selling its product to distributors across the United States.

Vitamin Corporation A will hire a salesman or an agent to approach a distributor in order to try and establish a relationship with them. Distribution companies include stores like Walmart, Kmart, Best Buy, Target and many other retail shopping outlets. The distributor does not have to be large and well-known; it may be a small local family-run store.

Negotiations take place at some point after the initial inquiry. Generally, a contract is written in order to identify exactly who gets what percentage of gross sales. The two business partners in the deal must come up with a division of the income that satisfies both parties, so that a long-lasting relationship might be viable.

Distributor agreements are an important part of conducting good business. Making sure that everyone is happy with the agreement will ensure that business will be conducted as usual. If you would like more information, contact a Minneapolis distributor agreement lawyer from Skjold ▪ Barthel at 612-746-2520 today.