The question of the best way for a manufacturer or
supplier to make overseas sales involves numerous considerations,
challenges and risks, commercial and legal alike. Traditionally,
goods can be internationally commercialized in one of three classic
ways: marketing through an agent, direct sales or sales through a
distributor.
This article enumerates and discusses the rules of thumb and the
many aspects that must be considered when seeking to define and
anchor the terms and conditions of engagement with the chosen
party, following a decision to merchandise the products by
appointing a distributor.
To set the boundaries of the discussion, a distributor is a
party that purchases the products from the manufacturer/supplier
and often keeps stocks of the products, and in its turn sells them
to its customers in the territory. The distributor's profit
center in the deal is the difference between the price paid for the
goods by the distributor to the manufacturer/supplier,
