Exclusive Distribution Example

Give two example of exclusive distribution being in the market along with the reason.

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Exclusive distribution occurs when the distributor of a product signs an agreement with a manufacturer to be the only company to sell that product in a given area. When this occurs, the distributor will not sell any products that would compete with those of the manufacturer. These agreements may be very lengthy and complex.

An example of an exclusive distribution agreement was one made by Sagent Technology, Inc. of Palo Alto, California, and Sagent U.K. Ltd. in England. In this situation, Sagent Technology would provide computer software, and Sagent U.K. Ltd. would agree to distribute this software to members of the European Union. The company in England would be the only company to sell this computer software and wouldn’t sell any other competing software.

Another example of an exclusive distribution agreement was one between Laser Shot, Inc. in Texas and Lamperd Less Lethal, Inc. in Canada. In this case, Laser Shot Inc. developed firearms simulators, and Lamperd Less Lethal would be the only company to sell these items in Canada. Lamperd Less Lethal wouldn’t sell any items that would compete with this product.

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Exclusive distribution involves an agreement between a supplier and a distributor or a distributor’s network. The distributor is authorized to be the only holder and seller of the supplier’s goods and/ or services within a specified geographical location.

An example of an exclusive distributorship agreement was between Apple and AT&T. Apple approached the network provider with the exclusive distributor offer in order to distribute the first iPhone. The reason behind Apple’s plans was that they needed a strong distributor with the ability to support the iPhone with data and voice access.

An exclusive distributor deal between Marc Jacobs and FJ Benjamin is another exclusive distributorship agreement that sought to offer exclusive rights to FJ Benjamin to carry Marc Jacobs in Singapore, Malaysia, and Indonesia. FJ Benjamin was upbeat about the deal because it presented exclusive rights with a high-end fashion label and it also offered them an opportunity to replace Raoul, their folding homegrown fashion brand.

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