Typically, the distributor buys the products manufactured by the company and supplies them to distributors and/or end consumers in different locations. This requires prior agreement between the parties on payment cycles, storage and transportation requirements. The procedure for selling with the various stages can be described in detail. For example, the process of ordering by the distributor. Depending on the type of product for which the distribution contract is entered into, a non-compete clause contained in an agreement may be beneficial to the owner. It may be expected that the distributor is not authorized to manufacture, sell or promote other products in competition with the owner`s product for a limited period after the expiry or termination of the contract. The distributor`s sale of a competitive product for the duration of the agreement in the same territory may also exist with respect to the sale of a competitive product. This agreement has been made of and between………………. INC, a duly organized company and exists according to Taiwan`s laws with its main place of activity in Taipei Taiwan (hereafter referred to as seller) A large percentage of distributors enjoy exclusive rights or monopoly within each specific geographic boundary. In an exclusivity agreement, only the designated distributor can sell the manufacturer`s products in the regions/regions indicated. In a non-exclusive agreement, the manufacturer reserves the right to sell to other distributors. The manufacturer or seller must also determine whether the distribution contract is exclusive or not exclusive. In an exclusivity agreement, the specified distributor is the only distributor with the right to sell the product in a geographic region or in several regions.
If the agreement is not exclusive, the manufacturer or seller can supply other distributors who sometimes compete in the same market. In addition, the manufacturer or lender must define a distribution strategy if it takes into account the nature of the agreements to be concluded. A selective strategy requires a small group of distribution points to cover the channel`s target markets. An intensive strategy aims to place the product through a wide distribution in front of as many potential buyers as possible. This last point generally applies to consumer products rather than commercial markets. In order to open and exploit Indian markets, foreign companies designate an Indian company that markets its products in all or part of India. In the case of such distribution agreements, IP plays an important role, as the foreign company should license the Indian distributor for its brands, know-how, etc. Fundamental elements of a distribution agreement include duration (period for which the contract is in effect), delivery conditions and distribution areas covered by the agreement (regions located in the United States).