Distribution Agreements
Distribution agreements for suppliers appointing a distributor, and for businesses taking on a product range, whether the products are made in Australia or imported.
- Acting for the supplier or the distributor
- Exclusive and non-exclusive appointments
- Territory, minimum purchases and performance targets
- Brand use, stock and what happens at the end
Selling through others
What a Distribution Agreement Is
A distribution agreement appoints a business to buy products from a supplier and resell them in a territory, in its own name and on its own account.
A distributor is different from an agent. An agent sells on the supplier's behalf and does not take ownership of the goods. A distributor buys the stock, sets its own customer relationships and carries the risk of reselling it. This page deals with distribution arrangements.
Where the supplier is overseas, the agreement also needs to deal with the governing law, the currency, delivery terms, import responsibilities and who makes sure the products and their labelling comply with Australian requirements.
We act for either side. For a supplier, the focus is usually on protecting the brand, being able to exit a territory that is not performing, and limiting responsibility for what the distributor does. For a distributor, it is usually the security of the appointment, the length of notice to end it, and recovering the investment made in building the market.
Competition law shapes what a supplier can require. A supplier can recommend a resale price but generally cannot enforce a minimum price the distributor must sell at. And where the arrangement includes a marketing system, significant control and fees paid to the supplier, it may be a franchise, which brings its own disclosure obligations.
What it covers
What the Agreement Covers
Each agreement is prepared for the products, the territory and the commercial terms the parties have agreed.
Appointment and Territory
The products covered, the territory and any channels or customers reserved to the supplier.
Exclusivity
Whether the distributor is exclusive, and what the supplier may still do in the territory itself.
Minimum Purchases
Purchase targets, how performance is measured and what happens if targets are not met.
Pricing and Ordering
Price lists, price changes, ordering, delivery, payment terms and currency.
Brand and Trade Marks
How the distributor may use the brand, marketing obligations and approval of materials.
Termination and Stock
Notice periods, buy-back of unsold stock, handover of customers and ending use of the brand.
Fixed fees for this work are published on our pricing page.
Get a Fixed-Fee QuoteHow it works
How It Works
Tell us about the arrangement
The products, the territory, which side you are on and what has been agreed so far.
We confirm the fee
You receive a fixed fee in writing before any work starts.
We prepare or review the agreement
Either a new agreement from the agreed terms, or advice on a draft the other side has sent.
Signing
We finalise the agreement for signing and confirm what each party should keep on file.
Before you start
What to Have Ready
Distribution agreements are faster to prepare when the commercial terms have been agreed in principle.
Products and territory: The product range, the territory, and any online or national accounts that sit outside it.
Commercial terms: Pricing, margins, minimum order quantities, payment terms and the currency of payment.
The brand: Who owns the trade marks, whether they are registered in Australia, and any marketing commitments.
The exit: The initial term, renewal, notice periods and what happens to stock and customers at the end.
Common Mistakes
Exclusivity without targets: An exclusive appointment with no performance targets can lock a supplier into an underperforming territory.
Setting resale prices: Requiring a distributor to sell at or above a set price is generally prohibited.
Accidentally creating a franchise: Adding a marketing system, close control and upfront fees can turn a distribution arrangement into a franchise.
No plan for the end: Without exit terms, disputes about unsold stock, customer lists and brand use are common.
Points Worth Knowing
Product liability
The agreement should deal with recalls, defects and who bears the cost of warranty claims.
Consumer law
Distributors can have obligations to consumers under the Australian Consumer Law, whatever the agreement says.
Register the trade mark
A supplier entering Australia should check its trade mark is registered here before appointing a distributor.
Online sales
Decide how online sales into and out of the territory are treated.
Insurance
Product liability and public liability cover should be required and kept current.
Agency is different
If the business will sell on the supplier's behalf without buying stock, it needs an agency agreement instead.
We prepare and review distribution agreements. We do not act in disputes about them.
Talk to Us About Your MatterDistribution arrangements sit close to franchising and to the sale of a business, and often run on the supplier's standard trading terms.
Distribution Agreement FAQs
What is the difference between a distributor and an agent?
Should a distribution agreement be exclusive?
Can a supplier set the price the distributor sells at?
Could my distribution arrangement be a franchise?
We are importing products from overseas. What should the agreement cover?
What does a distribution agreement cost?
Can you review an agreement a supplier has sent us?
Have a question that is not answered here?
Contact UsAppointing or Becoming a Distributor?
Tell us about the products and the territory, and we will confirm a fixed fee before any work starts.
Get a Fixed-Fee Quote