Agency Distribution Agreements

Agents and distributors play an important role in many business models, but getting the foundation of the relationship right has a huge impact on its success.

Your business could produce the best goods and services but it will fail if you can’t get in front of the right customers at the right time. Sales is often considered to be the hardest part of a business to get right. It can take many months for newly-hired sales professionals to prove themselves and, if they aren’t the right fit, you waste time and money, and are forced to begin the process again. Making inroads into new geographical markets can be costly with and fought unforeseen challenges and cultural issues.

This is why many businesses capitalise on the expertise of agents and distributors, taking advantage of their already-established networks of customers, and proven track record in building strong customer-bases for products and services. As with any commercial agreement, there are risks for agents, distributors and the business provider. SA Law’s commercial experts know what these are, and can help you to avoid them. We can ensure you enter a solid commercial agreement that addresses the typical areas that can lead to disputes. We also understand the unique considerations that differentiate a distribution agreement from an agency agreement.

How we help you

  • We can advise, draft and amend the terms of an agency or distribution agreement, and ensure it has everything it needs to foster a successful business relationship.
  • We can also advise you during periods of difficulty, such as accusations of breaching an agreement. We are particularly experienced in resolving these kinds of disputes before they cause irreparable damage to the business relationship, so contact us as soon as anything out of the ordinary happens.

It’s good to bear in mind...

  • How do you decide whether to use an agency or distributor? This is entirely based on the unique nature of your business, and we can help you choose the right route. In short, an agent will conclude sales in the name of your company and is paid a commission on those sales, whereas a distributor purchases goods from you and then sells directly to the end user – the risk, reward and level of control differ in each relationship.
  • Agency and distribution agreements define the requirements of all parties, so think about what you need. For example, most agreements define how commissions are structured, and include clauses that prevent the agency or distributor setting up in competition. 
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