Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.
When the firm distributes its brand through just one or two major outlets in the market, who exclusively deal in it and not all competing brands, it is said that the firm is using an exclusive distribution strategy. This is a common form of distribution in products and brands that seek a high prestigious image.
Typical examples are of designer ware, major domestic appliances and even automobiles. By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediaries price, promotion, credit inventory and service policies. The firm also hopes to get the benefit of aggressive selling by such outlets.
Most exclusive dealing contracts are beneficial because they encourage marketing support for the manufacturer’s brand. By becoming an expert in one manufacturer’s products, the dealer is encouraged to specialize in promoting that manufacturer’s brand. This may include offering special services or amenities that cost money, such as an attractive store, trained salespeople, long business hours, an inventory of products on hand, or fast warranty service.
Many companies have exhausted their market potential and are considering other markets to increase profits. But given the lack of awareness of the market structure, laws, lack of knowledge of the language, lacking sales channels and basic skills for development in foreign markets, these companies cooperate with us. In our turn, when we receive an exclusive representation in the region, we contact the largest distributors, networks and promote the goods for some %. Our company can act as an intermediary between the manufacturer and the distributor. It may itself buy and resell with a higher margin, or it may simply establish distribution channels. In any case, our company will make every effort to achieve the maximum result.
This business model is widespread in countries such as China, India and some European countries. Namely, the Company, as well as we, signs contracts with many manufacturers and begins to offer them to potential buyers. How this service is very popular, for example, in China (you probably also came across this). When you come to China, you don’t know the local language of laws and do not have a representative in this country. You will be 90% likely to find yourself in a company like us that will offer you a wide range of products, and if you still do not find the right product, you will be asked to find the one you need according to your criteria (price, quality, time, etc.) for percentage of the transaction.
As a rule, these companies have neither warehouses nor working capital — they simply bring the buyer to the seller and get their percentage (being a third party). And in order to be sure that the intermediary will not be deceived by agreeing on the direct agreement “On granting the right of exclusive” is signed in advance (as we do).