Distributor Agreement Format
Taking on a new market through a distributor can multiply your reach, but only with clear territory and target terms. This template defines the products, territory, and obligations on both sides.
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When and how to use this letter
Use this agreement when appointing a company to resell your products in a defined market. Sign it before the distributor places its first stock order or invests in marketing your brand.
Exchange signed copies on company letterhead, and attach the current price list and product catalogue as annexures so the commercial terms are part of the signed record. Email PDFs are standard for cross-border appointments.
Keep the tone businesslike and balanced. The two clauses that matter most are territory and targets: define the territory precisely, and set targets that are ambitious but achievable, with a clear consequence for sustained misses.
Include what to avoid: do not grant exclusivity lightly. An exclusive distributor who underperforms blocks your entire market, so tie any exclusivity to strict targets with automatic conversion to non-exclusive if missed. Also avoid letting the distributor register your trademarks in its own name; state clearly that all brand rights remain yours.
What happens next: the distributor places its opening order, you confirm brand usage guidelines in writing, and you schedule quarterly business reviews against the sales targets. A non-obvious tip: require the distributor to share sell-through data, not just purchase orders. Knowing what actually sells to end customers lets you plan production and spot market shifts early.
Frequently asked questions
Should I give my distributor exclusivity?
Who owns the customer relationships?
What happens to unsold stock if we terminate?
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