What Is a Reseller Agreement

A reseller agreement, also known as a distribution agreement, is a contract between a manufacturer or wholesaler and a third-party seller that allows the seller to distribute and sell the manufacturer or wholesaler`s products under their own branding. The reseller agrees to purchase the products from the manufacturer or wholesaler and resell them to customers for a profit.

Reseller agreements can be beneficial for both parties involved. For the manufacturer or wholesaler, it allows them to expand their market reach without having to invest in marketing and advertising efforts themselves. For the reseller, it offers the opportunity to offer a new product line and generate additional revenue without the expense and overhead associated with developing their own products.

The terms of a reseller agreement can vary greatly depending on the needs and goals of both parties. Generally, the agreement will outline the product or products being sold, the territory in which the reseller is allowed to operate, and the terms of payment and delivery. It may also include provisions for marketing, advertising, and support.

One important aspect of a reseller agreement is the issue of exclusivity. If a manufacturer or wholesaler grants a reseller exclusive rights to sell their products in a certain geographic area or market segment, it can limit the ability of other resellers to compete and potentially damage relationships with existing customers. As such, it is important to carefully consider the terms of exclusivity in any reseller agreement.

Another key consideration is how the agreement will be terminated. In some cases, the agreement may be terminated by either party with notice. In others, a breach of contract or failure to meet certain performance standards may trigger termination. It is important for both parties to clearly define the circumstances under which the agreement can be terminated and the procedures for doing so.

In summary, a reseller agreement is a contract that allows a third-party seller to distribute and sell products under the manufacturer or wholesaler`s branding. It is important to carefully consider the terms of the agreement, including exclusivity and termination, to ensure a mutually beneficial relationship.