Distribution Agreement Template
What Is a Distribution Agreement?
A Distribution Agreement is a written contract prepared by the supplier (manufacturer) and the company that sells their products (distributor) to outline the details of the distribution - the latter party buys goods from the manufacturer and sells them to their clients within a specific area. For a set commission or fee, the distributor makes sure the goods are sold, which means the manufacturer can focus on production and not worry about getting the word out to the customers. The more goods are sold, the more profits both counterparts make.
You can download a printable Distribution Agreement template via the link below or make your own document with our online form builder.
How to Write a Distribution Agreement?
While each Distribution Agreement differs from the other, there is a basic Distribution Agreement checklist to follow - include the information below to your contract to prepare a simple Distribution Agreement:
- Identify the parties to the deal - name the manufacturer and the distributor and add their contact information.
- Indicate the purpose of the agreement - the manufacturer grants the distributor the right to distribute and sell the products to customers. You need to specify the supply requirements and expectations of both counterparts. Be clear about the territorial assignment - usually, the distributor may only work within a certain region or area. List the products the distributor will be allowed to sell and their delivery dates.
- Negotiate the payment details - it may be based on the commission or you can decide on a different type of fee arrangement. In most cases, the payment comes from the distributor before the shipment of goods from the supplier is finalized. Then, both parties receive and share the profits - you are free to determine the precise amount of money they get in the end. For example, the distributor may receive a fixed commission from each sale or generate income buying the goods wholesale and then selling them for a higher price. Additionally, if you distribute domestic appliances or motor vehicles, you may prepare a separate Rebate Form - a document that lets the distributor get payments from the supplier for each item sold.
- State the duration of the contract - depending on the type of business, the distributor, expected returns, and the already existing professional relationship between the parties, the deal may last months or even years. Do not forget to mention the conditions for early termination - for instance, the manufacturer may not be satisfied with the distributor because of inadequate profit, and if the contract allows that, they may cancel the deal before it expires.
- Determine whether both parties agree to sign an Exclusive Distribution Agreement - this means the distributor has full control over a specified product, usually in the specified location. If the contract is non-exclusive, it will allow the manufacturer to sign similar agreements with other distributors in the same area or in other cities, states, or countries.
- Sign and date the document. To add an extra level of protection to your deal, you may notarize the papers.
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Download Distribution Agreement Template