{"id":2013,"date":"2026-09-07T08:55:32","date_gmt":"2026-09-07T08:55:32","guid":{"rendered":"https:\/\/www.pierrotcare.com\/?page_id=2013"},"modified":"2026-09-17T19:24:42","modified_gmt":"2026-09-17T19:24:42","slug":"distribution-agreement","status":"publish","type":"page","link":"https:\/\/www.pierrotcare.com\/en\/b2b\/distribution-agreement\/","title":{"rendered":"Distribution agreement"},"content":{"rendered":"
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Distribution agreement<\/h1>\n

What a distribution agreement actually contains, clause by clause: territory, exclusivity, minimum purchase, duration and how it ends. Written by a manufacturer that signs them.<\/p>\n

This explains how the industry works. It is not legal advice and it does not replace a lawyer in your country.<\/p>\n

Apply to distribute Pierrot<\/a><\/p>\n<\/div>\n

\"Pierrot<\/div>\n<\/div>\n<\/div>\n
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A distribution agreement is the document that turns a conversation into a business. It says which products you can sell, where, for how long, what you have to buy and what happens the day one of the two sides wants out. Most of the disputes we have seen in eighty years come from three clauses nobody read carefully.<\/p>\n

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The three that matter<\/span><\/p>\n

Territory, minimum, exit<\/h2>\n

Everything else is negotiable detail. These three decide whether the deal works for you and what it costs to leave it.<\/p>\n<\/div>\n

Not a template<\/span><\/p>\n

Written from experience<\/h2>\n

This is how the clauses behave in practice in consumer goods, not a form to fill in. Your lawyer writes the document; this tells you what to look for.<\/p>\n<\/div>\n

Both sides<\/span><\/p>\n

What we ask, what you should ask<\/h2>\n

We are on the manufacturer side of the table, so we also say what a brand is trying to protect with each clause.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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What a distribution agreement contains<\/h2>\n

Twelve clauses cover almost every agreement in consumer goods. This is what each one is for and what to watch in it.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Clause<\/th>\nWhat it settles<\/th>\nWhat to watch<\/th>\n<\/tr>\n<\/thead>\n
Parties and products<\/td>\nWho signs and exactly which references are covered<\/td>\nWhether it covers the whole catalogue or a list. New launches should be included automatically or you will renegotiate every year<\/td>\n<\/tr>\n
Territory<\/td>\nThe geography and often the channel<\/td>\n“Spain” and “pharmacy channel in Spain” are very different deals. Get the channel written down<\/td>\n<\/tr>\n
Exclusivity<\/td>\nWhether anyone else can sell there<\/td>\nExclusive, non-exclusive or sole. See the section below: the three are not the same<\/td>\n<\/tr>\n
Minimum purchase<\/td>\nWhat you commit to buy per year<\/td>\nWhether missing it ends the contract or only the exclusivity. The second is much safer for you<\/td>\n<\/tr>\n
Prices and terms<\/td>\nThe list you buy at and how it can change<\/td>\nNotice period before a price rise, and whether stock already ordered is protected<\/td>\n<\/tr>\n
Duration and renewal<\/td>\nHow long it runs and how it renews<\/td>\nAutomatic renewal is better than a yearly negotiation once you have invested in the market<\/td>\n<\/tr>\n
Online and marketplaces<\/td>\nWho may sell on Amazon and the like in your territory<\/td>\nThe clause most often missing, and the one that causes most conflict. Ask for it explicitly<\/td>\n<\/tr>\n
Trademark use<\/td>\nWhat you can do with the brand<\/td>\nPermission to register a domain, run ads and translate packaging. Never register the trademark itself in your own name<\/td>\n<\/tr>\n
Regulatory registration<\/td>\nWho files the products with the health authority<\/td>\nAnd, above all, who owns that file when the agreement ends<\/td>\n<\/tr>\n
Marketing<\/td>\nWho pays for what<\/td>\nPoint-of-sale material, samples, trade fairs and whether there is a budget or only goodwill<\/td>\n<\/tr>\n
Termination<\/td>\nHow each side gets out<\/td>\nNotice period, causes for immediate termination and whether there is compensation<\/td>\n<\/tr>\n
Remaining stock<\/td>\nWhat happens to the goods you still hold<\/td>\nBuy-back at cost, sell-off period, or nothing. This clause is worth real money<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n
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Exclusive, sole or non-exclusive<\/h2>\n

Three words that get used as if they meant the same thing. They do not, and the difference is what you can actually promise your own customers.<\/p>\n

Non-exclusive.<\/strong> The brand can appoint others in your territory and can also sell there directly. You are one route among several. Normal at the start, and it is not an insult: it is how a brand tests a partner.<\/p>\n

Sole.<\/strong> You are the only appointed distributor, but the manufacturer keeps the right to sell directly, usually to specific named accounts. Ask which accounts, by name, in an annex.<\/p>\n

Exclusive.<\/strong> Nobody else sells there, not even the manufacturer. It is the strongest position and the one that always carries a purchase target.<\/p>\n

Whichever you sign, ask the same question: what exactly happens if I miss the target?<\/strong> The good answer is that exclusivity converts to non-exclusive. The bad one is that the contract terminates.<\/p>\n<\/div>\n

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What is really negotiable, and what is not<\/h2>\n

Knowing which is which saves weeks. Push on the wrong clause and you look inexperienced; accept the wrong one and you pay for it in year two.<\/p>\n

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  1. Usually negotiable<\/strong> The minimum purchase in year one, the payment terms, who pays for point-of-sale material, the notice period, and how new references enter the agreement.<\/li>\n
  2. Sometimes negotiable<\/strong> Exclusivity, the width of the territory, and the buy-back of remaining stock. These move once you have shown a first year of numbers.<\/li>\n
  3. Almost never negotiable<\/strong> Ownership of the trademark, the formulations, and the right of the manufacturer to set the brand’s international positioning. A brand that gives these away has already lost control of itself.<\/li>\n
  4. Should never be vague<\/strong> Who owns the regulatory file, and what happens to your stock on termination. If the draft is silent on either, it is not silence: it is a decision that has been left for later, and later means whoever has more leverage that day.<\/li>\n<\/ol>\n<\/div>\n<\/div>\n
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    Five things to check before signing<\/h2>\n

    None of them are legal subtleties. They are the ones that come back.<\/p>\n

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    1. The target is a number, in the contract<\/strong> Not “reasonable efforts” and not a figure agreed by email. If it is not in the document, it is not a target: it is a future argument.<\/li>\n
    2. The online clause exists<\/strong> Say explicitly who may list the products on marketplaces in your territory. Without it, you can build a market and watch it undercut from outside.<\/li>\n
    3. The registration has an owner<\/strong> If you file the products and the file stays in your name, a change of distributor is expensive for the brand. If it transfers automatically, your investment leaves with the contract. Both are workable; not knowing which is not.<\/li>\n
    4. The exit has a runway<\/strong> A notice period of a few weeks is not enough to sell down stock. Ask for months, and for a sell-off window after termination.<\/li>\n
    5. Somebody local reads it<\/strong> Distribution and agency law is national, and in several countries an agent is entitled to compensation on termination while a distributor is not. That distinction can be worth a year of margin.<\/li>\n<\/ol>\n

      If you have not got this far yet, start with the guide on how to become a distributor<\/a>: what a brand asks for and what you should ask before any of this is on the table.<\/p>\n<\/div>\n<\/div>\n

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      How we do it at Pierrot<\/h2>\n

      Four steps, no surprises. The first one takes two minutes.<\/p>\n

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      1. Tell us your market and your channel<\/strong> Through the form on the distributors page. The more you tell us about your channel, the more useful our first reply will be.<\/li>\n
      2. We check the territory<\/strong> We only take applications from markets where there is no active Pierrot distributor yet, so this is the first thing we look at.<\/li>\n
      3. Terms<\/strong> We send you the range, the formats and the commercial terms for your market, in writing.<\/li>\n
      4. Agreement and launch<\/strong> We start with the selection that works best in your channel and widen it as the brand settles in.<\/li>\n<\/ol>\n<\/div>\n<\/div>\n
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        Frequently asked questions<\/h2>\n
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        \nWhat is a distribution agreement?<\/summary>\n
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        The contract between a manufacturer and a company that buys its products to resell them in a defined territory. It sets which products are covered, where they can be sold, for how long, what the distributor commits to buy and how either side can end it.<\/p>\n<\/div>\n<\/details>\n

        \nWhat is the difference between exclusive and sole distribution?<\/summary>\n
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        Under exclusive distribution nobody else sells in the territory, not even the manufacturer. Under sole distribution you are the only appointed distributor, but the manufacturer keeps the right to sell directly, usually to named accounts. Ask for those accounts to be listed in an annex.<\/p>\n<\/div>\n<\/details>\n

        \nHow long does a distribution agreement usually last?<\/summary>\n
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        One to three years is common, with renewal. What matters more than the length is how it renews: automatic renewal protects the investment you have made in the market, while a yearly renegotiation puts it back on the table every twelve months.<\/p>\n<\/div>\n<\/details>\n

        \nWhat happens if I do not reach the minimum purchase?<\/summary>\n
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        It depends on how the clause is written, and this is the single thing worth negotiating hardest. In the safer version, missing the target converts exclusivity into non-exclusivity. In the harsher version it is a cause for termination. Ask which one you are signing.<\/p>\n<\/div>\n<\/details>\n

        \nWho registers the products with the health authority?<\/summary>\n
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        In most markets the distributor files the registration and the manufacturer supplies the technical documentation, formulations and certificates. The clause that matters is not who files it but who owns the file if the agreement ends.<\/p>\n<\/div>\n<\/details>\n

        \nCan the brand sell on Amazon in my territory?<\/summary>\n
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        Only if the agreement allows it, so this needs to be written down explicitly. Marketplace listings from outside the territory are the most common source of conflict in modern distribution, and the clause is the one most often missing from older templates.<\/p>\n<\/div>\n<\/details>\n

        \nWhat happens to my stock if the agreement ends?<\/summary>\n
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        Whatever the contract says, which is sometimes nothing. The usual arrangements are a buy-back by the manufacturer or a sell-off period after termination. Settle it before signing: it is one of the few clauses with a direct number attached.<\/p>\n<\/div>\n<\/details>\n

        \nDo I need a lawyer?<\/summary>\n
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        Yes, and a local one. Distribution and agency law is national, and in several countries a commercial agent is entitled to compensation on termination while a distributor is not. This page explains how the industry works so you arrive prepared; it does not replace legal advice in your own jurisdiction.<\/p>\n<\/div>\n<\/details>\n<\/div>\n<\/div>\n<\/div>\n

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        Shall we talk terms?<\/h2>\n

        Tell us which market you work in and through which channel. We check the territory and send you the catalogue and the commercial terms in writing.<\/p>\n

        Apply to distribute Pierrot<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n