A distributor buys your products to resell in their market. They buy at a discount and make money by selling at a higher price.
The contract of sale is between you and the distributor. The stock they buy is their responsibility and they deal with the end customer.
A distributor will usually buy in bulk and should:
- reduce your overheads and exposure to risk
- provide access to their dealers and resellers
- be a sustainable and scalable entry into a market
Less resource and control
A distributor markets and sells the product and provides aftersales support. Your costs will be reduced but you usually won’t have any control over the marketing and pricing of your product.
A good distributor may accept your suggested pricing and marketing material.
Like agents, a distributor may want to be the only seller in a geographic region.
Choosing a distributor
In some countries it can be difficult to part with a distributor before the end of their contract and they may have a legal right to compensation.
Take time to choose the right distributor. Discuss their experience and ask for a list of other exporters they represent who you can contact for a reference. Get listings and recommendations for distributors from:
- other companies operating in the same sector
- contacts at trade fairs and exhibitions
- UK and overseas trade associations
- our international trade adviser network
You should detail responsibilities, targets and how they’ll be measured in a written agreement. Get legal help to create the contract.