Is it good to expand Exclusive Distributor ?
Post 1 of 10
I need your help.
We are manufacturers .Our company's policy is expand exclusive distributors .We just have 5 kinds of products .But each product we can only have one distributor in a country .What is more ,customers need to be our distributor after he purchases 2-3 orders .Otherwise ,we will never provide goods to them.
The requirements to be our distributor is :1.annual quantity order 2.deposit .
How do you think of our policy ?Is it good or bad ?
Please tell me your opinions .
Thanks very much .
We are manufacturers .Our company's policy is expand exclusive distributors .We just have 5 kinds of products .But each product we can only have one distributor in a country .What is more ,customers need to be our distributor after he purchases 2-3 orders .Otherwise ,we will never provide goods to them.
The requirements to be our distributor is :1.annual quantity order 2.deposit .
How do you think of our policy ?Is it good or bad ?
Please tell me your opinions .
Thanks very much .
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05 Nov 2007 03:13
Post 2 of 10
I am not in favor of exlcusive agents and distributors as I just don't think that this is best for customers.
However, if you are going to do it then you definitely need to ensure that the distributor places a certain quantity of orders each period of forfeit his right to be your exclusive agent in that market. Don't make their markets too big as you don't want to exclude too many customers.
Also watch yourself with any samples etc that you may provide them as you don't want your agent to abuse the trust that you place in them.
However, if you are going to do it then you definitely need to ensure that the distributor places a certain quantity of orders each period of forfeit his right to be your exclusive agent in that market. Don't make their markets too big as you don't want to exclude too many customers.
Also watch yourself with any samples etc that you may provide them as you don't want your agent to abuse the trust that you place in them.
05 Nov 2007 05:09
Post 3 of 10
Replying to [April shuzi]:
What is your product? What I can guess from your company’s policy is that
1) Your company do not wish to deal with many small buyers and wish to deal with only a few big buyer
2) Your company’s order is already too much at this moment
3) Your pricing are good and competitive
4) Your product is a finished product and you don’t sell it to other manufacturer, you wish to sell it to a whole seller or distributor.
5) Your company is very confident on your products quality and you have very few customer complaint.
If your company compel to the five above then looking for exclusive distributor is a correct thing to do. To give an exclusive distributor you need to sign a contract so that your distributor’s benefits are protected. What happen if you find the selected distributor can’t perform that well, just on the line where your annual quantity requirement is and later you found a much better distributor, you can’t change anymore, if you change the distributor have the right to sue you.
What is your product? What I can guess from your company’s policy is that
1) Your company do not wish to deal with many small buyers and wish to deal with only a few big buyer
2) Your company’s order is already too much at this moment
3) Your pricing are good and competitive
4) Your product is a finished product and you don’t sell it to other manufacturer, you wish to sell it to a whole seller or distributor.
5) Your company is very confident on your products quality and you have very few customer complaint.
If your company compel to the five above then looking for exclusive distributor is a correct thing to do. To give an exclusive distributor you need to sign a contract so that your distributor’s benefits are protected. What happen if you find the selected distributor can’t perform that well, just on the line where your annual quantity requirement is and later you found a much better distributor, you can’t change anymore, if you change the distributor have the right to sue you.
05 Nov 2007 18:53
Post 4 of 10
Replying to [April shuzi]:
Hello,
For my opinion, your policy is really too strict. You can't look for distributors and just ask them their annual quantity order...
If you want to find some strong partner to expand your product, especially if you look for exclusive distributors, you 'll have to take time, make some business with the company, talk with the responsable and see after a certain period if this business actors is the good one, based on more specifications.
An exclusive distributor is not a client, but a real company partner. So you can't impose your conditions, but deal it.And see after some order and market analysis if your actual distributor is the best for an exclusive contract on this market and this country
Regards,
Matthieu, Prodigg.com
www.prodigg.com/en/com
Hello,
For my opinion, your policy is really too strict. You can't look for distributors and just ask them their annual quantity order...
If you want to find some strong partner to expand your product, especially if you look for exclusive distributors, you 'll have to take time, make some business with the company, talk with the responsable and see after a certain period if this business actors is the good one, based on more specifications.
An exclusive distributor is not a client, but a real company partner. So you can't impose your conditions, but deal it.And see after some order and market analysis if your actual distributor is the best for an exclusive contract on this market and this country
Regards,
Matthieu, Prodigg.com
www.prodigg.com/en/com
05 Nov 2007 19:56
![[em2]](http://img.alibaba.com/images/eng/style/icon/emoticons_laugh.gif){kind=icon}
![[em4]](http://img.alibaba.com/images/eng/style/icon/emoticons_sad.gif){kind=icon}
![[em12]](http://img.alibaba.com/images/eng/style/icon/emoticons_surprised.gif){kind=icon}
Post 6 of 10
Replying to [April shuzi]:You can have exclusive distributors if your products are priced well so as to enable Distributors to retain a healthy margin for themselves and if their sub-dealers also earn enough margins. If these products face too much of competition you may plan to have more than one distributors and non-exclusive wholesalers as well. Hope I am clear. Do revert for any further discussions.
Regards,
Milind![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
Regards,
Milind
06 Nov 2007 04:33
Post 7 of 10
Dear Egernia ,
Would you please kindly inform me why you think it is not good for customers ?Thanks .
Would you please kindly inform me why you think it is not good for customers ?Thanks .
06 Nov 2007 17:13
Post 8 of 10
Dear David Frencken ,
Thanks very much for your opinion .
We produce air purifiers .Do you know ?
I want to reply your above five points.
1)our company want to deal with customers who are willing to establish long term business relations .We donot care the small orders at the beginning of our cooperation .But after 2 -3 times cooperation ,we require our customers to sign Distributor contract .
2)we have not many orders at present .
3)our price is fine .But I am not sure it is competitive .
4)yes ,we just want to sell whole sellers and distributors .
5)at present ,there are many complaint on quality .
If we sign contract with customers ,we promise we will not change anymore .
Thanks very much for your opinion .
We produce air purifiers .Do you know ?
I want to reply your above five points.
1)our company want to deal with customers who are willing to establish long term business relations .We donot care the small orders at the beginning of our cooperation .But after 2 -3 times cooperation ,we require our customers to sign Distributor contract .
2)we have not many orders at present .
3)our price is fine .But I am not sure it is competitive .
4)yes ,we just want to sell whole sellers and distributors .
5)at present ,there are many complaint on quality .
If we sign contract with customers ,we promise we will not change anymore .
06 Nov 2007 17:33
Post 9 of 10
Replying to [April shuzi]:![[em16]](http://img.alibaba.com/images/eng/style/icon/emoticons_applause.gif)
,choose one way suit for your company nobody have right to say if your policy work before it carry out.
,choose one way suit for your company nobody have right to say if your policy work before it carry out.
06 Nov 2007 19:02
Post 10 of 10
I agree that it is your business and that you are of course free to do things however you please but since you are asking here is my opinion.
The disadvantage to the final customer as I see it is like this. A free agent can buy any product from any factory and therefore can really purchase according to the needs of their customer. A contracted agent or distributor is either bound contractually to only buy and sell your products or simply finds that he/she is restricted to your products due to the need to meet your quotas. So in that regard a contracted agent would be more inclined to push a product onto a customer even though there may be something more suitable out there.
There are advantages for the factory of course and even for the contracted agent, but I can't see many for the final customer. Perhaps one could say familiarity with quality and perhaps a better price from regular orders, but that would not be true in every case. In your case you seem to be offering product at the same price to both normal customer and contracted agent and I assume that your quality is the same for every customer so where is the benefit to the final end customer?
My concerns are not big ones. I think that such agreements can work well, but they are not beneficial to all parties.
Additionally it seems that you force regular customers to become agents! Why would you do that? Don't you risk scaring off otherwise good customers? If your products were of that much interest to your customers then they would probably ask to become agents, but forcing them to do so may backfire!
The disadvantage to the final customer as I see it is like this. A free agent can buy any product from any factory and therefore can really purchase according to the needs of their customer. A contracted agent or distributor is either bound contractually to only buy and sell your products or simply finds that he/she is restricted to your products due to the need to meet your quotas. So in that regard a contracted agent would be more inclined to push a product onto a customer even though there may be something more suitable out there.
There are advantages for the factory of course and even for the contracted agent, but I can't see many for the final customer. Perhaps one could say familiarity with quality and perhaps a better price from regular orders, but that would not be true in every case. In your case you seem to be offering product at the same price to both normal customer and contracted agent and I assume that your quality is the same for every customer so where is the benefit to the final end customer?
My concerns are not big ones. I think that such agreements can work well, but they are not beneficial to all parties.
Additionally it seems that you force regular customers to become agents! Why would you do that? Don't you risk scaring off otherwise good customers? If your products were of that much interest to your customers then they would probably ask to become agents, but forcing them to do so may backfire!
07 Nov 2007 04:41
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