A sole distributor agreement gives a person or company the right to exclusively sell and supply a product on behalf of the person or company that manufactured it.
Only the person or company named in the agreement has the right to sell or supply a product. Such agreements usually involve a contract between the product’s manufacturers and the appointed distributor.
Sole distributors take responsibility for any risks associated with selling a product, such as accidental breakage. Distributors make a profit by marking up the product they are selling, while manufacturers are freed of the responsibility of the administrative tasks involved in selling a product.
Sole distributor contracts usually contain clauses that protect both parties. They may, for example, specify minimum sales targets or have confidentiality clauses. Manufacturers may also agree to provide distributors with initial training and this will usually be specified in the contract. Sometimes sole distributor agreements cover only a specific geographic region such as California, Oregon and Washington, for example.