Appointing a distributor abroad—checklist


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Commercial expert
Checklists

Appointing a distributor abroad—checklist


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Commercial expert

Checklists
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This Checklist sets out the main issues for a manufacturer or wholesaler to consider when appointing a distributor overseas. This Checklist considers preliminary and legal issues to be considered before appointing a distributor outside of the UK and commercial terms that manufacturers or wholesalers may wish to address when drafting and negotiating a distribution agreement.

Preliminary

IssueConsideration
Is distribution the right channel to market?
Consider the options:
  1. •

    agent

  2. •

    direct sales

  3. •

    distributor

Agency:
  1. •

    principal has contractual relationship, and closer business contact with customer

  2. •

    principal can take advantage of the agent’s expertise and contracts in the territory

  3. •

    may give rise to taxable presence for principal in overseas territory

  4. •

    local laws may be pro-agency, making termination of an agent difficult/expensive



Direct sales:
  1. •

    same advantages as agency, plus the manufacturer has an employment relationship with locally employed sales force

  2. •

    same disadvantages as agency, and may be more expensive (costs of employment, particularly in countries where employers' contributions are high)

  3. •

    subject to local employment laws for any sales force

  4. •

    exit from the territory is

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Jurisdiction(s):
United Kingdom

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