Distribution Agreement

A Distribution Agreement is a common type of contract in international trade, referring to an agreement between a supplier (manufacturer or exporter) and a distributor (importer or reseller) that stipulates the distributor purchases and resells the supplier's products in its own name within a specified territory and period. Its core feature is that the distributor bears its own profits and losses and assumes sales risks independently, establishing a buyer-seller relationship rather than an agency relationship with the supplier. Use cases include: the supplier wishes to quickly enter overseas markets and leverage the distributor's local channels and customer resources; the distributor seeks a stable supply source and exclusive territorial rights. Precautions: it is necessary to specify the distribution territory, term, exclusivity or non-exclusivity, minimum purchase quantity, price terms, intellectual property, confidentiality, termination conditions, and applicable law. Difference from 'Agency Agreement': an agent sells in the principal's name, earns commission, and does not bear profit or loss; a distributor buys and sells in its own name and earns the price difference. Difference from 'Franchising': distribution does not involve authorization of brand or business model.