Whether your next distribution agreement is a short or long-term proposition, planning your growth strategy and understanding where your new distributor fits in your business plan is a necessary step to successfully achieving your business goals. Before you go to your next distributor meeting, it is important to identify the most important contract issues you want to discuss with them.

Every year, thousands of distribution agreements are contested across the country and it is often the supplier who finds themselves fighting tooth and nail for what they believe to be clear proof of 'just cause for termination.'

It is often said that it is easier to divorce your spouse than your distributor and that you should consider your distribution agreement like a prenuptial agreement. 

Basic decisions, like the type of products that your distributor will handle, can become complicated if you plan on producing products across multiple categories.  Wholesalers can even hold exclusive distribution rights on your future line extensions if you aren't careful (even if they are unwanted by the distributor.) As your company grows and you begin expanding distribution across multiple states, there will be certain aspects in every distribution agreement that must be addressed.

Donna Hartman, attorney for OlenderFeldman LLP, will be exploring the top ten issues to consider before you sign your next distribution agreement at the USA Trade Tasting 

Both you and your distributor can go into business with the best intentions of fulfilling the guidelines set out in the contract, but brands regularly find themselves lost in a distributor's portfolio. Decisively protecting yourself against non-performance is a good practice that all brand owners should resolve in their contracts BEFORE they sign. If the relationship turns sour, with the right distribution agreement in place you should be able to terminate the contract without damaging either your image or your market position. Even if you've included safeguards against an underperforming distributor, you'll need to have a clear end-game outlined, as the termination of a distribution contract can get messy. After you've terminated your contract you might face devastating market conditions if you don't properly address the following questions (at a minimum):

• Are you going to buy back your inventory or is your wholesaler going to keep your remaining stock?

• What happens to your POS material?  

• If you don't buy back your inventory, is your wholesaler going to dump your product (and subsequently damage your brand's market position?)

Event Producer: Beverage Trade Network

USA Trade Tasting is brought to you by Beverage Trade Network, the leading online platform dedicated to connecting the global beverage industry. Beverage Trade Network (BTN) successfully connects wineries, breweries, distilleries and brand owners with international importers, distributors, brokers and beverage industry professionals on a daily basis. Strong partnerships with international and US organizations have helped BTN establish USA Trade Tasting as a premiere sales and marketing event committed to connecting the beverage industry.