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Distribution & Agency Agreements
Entering a market or territory where you don’t have expertise can be daunting and potentially costly. Using distributors or agents allows businesses to have access to local market knowledge and potential customers without establishing a new office or recruiting a new sales team in a new market.
In simple terms, appointing an agent allows a third party to sell goods on your behalf. The agent finds the customers and often carries out negotiations, but the contract is then formed directly between you and the customer. Whilst a distributor will also find customers in the market in which they have responsibility, the key difference between a distributor and an agent is that a distributor will enter into contracts with the customer directly.
The Risks Involved
Appointing an agent or a distributor is not a risk-free option – it will be important to ensure you get good information in relation to their plans in the market and that you have an ability to exit the arrangement if things aren’t going as promised. Agents in particular can often have protection in law that protects their work that they’ve done on your behalf.
Equally, when acting as a distributor or agent, it will be vital to ensure:
- the manufacturer keeps their supply chain robust;
- your position in the market is protected;
- your appointment cannot be terminated arbitrarily
Why Choose JMW?
Our team has wide experience of acting in relation to distribution and agency agreements and issues relating to their termination. We can help guide you through this potentially difficult time, providing you with the advice you need to make the right decisions and giving you the confidence to progress along this route.