Agenc.1.ppt

Exclusive Sales and Agency Exclusive Sales Exclusive Sales arises when the seller appoints the distributor to be its Exclusive Distributor of certain product( or products)in the territories and within the period as agreed upon by the two parties. Under Exclusive Sales Agreement, the Seller agrees to sell, within the agreed territories, the product(s) covered in the Agreement only to the Exclusive Distributor, while the Exclusive Distributor agrees to buy only the product(s) from the Seller and sell within the agreed territories. The relationship between the Seller and the Exclusive Distributor of the Exclusive Sales Agreement is “Principal to Principal” which means that the Exclusive Distributor purchases the products with its own money, sells them on the market, and assumes sole responsibility for profits and losses. Both parties shall specify the name(s), brand(s) and specifications of the product(s) of the exclusive sales in the Exclusive Sales Agreement so as to avoid disputes in the future. The territory of the Exclusive Sales refers to the Geographic territory in which product is sold by the distributor. The extent of the territory depends on the ability and sales network of the Exclusive Distributor, the market circumstances, characteristics of the product(s) and the market capacity etc. In practice, the district is limited to a small area at the beginning, and will expand with the successful sales of the Exclusive Distributor. It can be a city, several cities, a country or even several countries. The period of the Exclusive Sales, which is normally one year, should be clearly stated in the Exclusive Sales Agreement, and can be extended upon expiry with mutual agreement of the two parties. To get the Exclusive Sales right, the distributor will have to purchase at least a certain quantity of products or amount from the Seller within the stipulated period for the Exclusive Sales, that minimum quan