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Distributor Contract


Fred Linneman

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Sorry no sample contract to share - we don't have a distributer, although the mileage on our vehicles is beginning to indicate that we should consider it!

However, do be careful. I can tell you from experience with beer distributors that the contract is only half the story. Carefully research references, look at other brands the distributer carries, etc. Make sure that the distributer is a good match for your brand style/volume etc. It is a nightmare to get involved with a distributor that is all talk and no follow-through, no matter what the contract says.

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I led a panel discussion at the ADI conference in April about working with distributors - it is a critical issue for most small distillers, and can be quite challenging to manage depending on where you are and who you're working with. While it's not a sample contract, the summary we used covers most of the points you would see in contracts with distributors, brokers, dealers, etc. In my experience, many of them prefer to work without a contract, although we have contracts with some. If we don't have a written contract, I've documented in writing (and sent to the distributor) my view of what has been agreed so I'll have something to point to if an issue arrives later.

Marketing strategy & collaboration

  • Who does what, when, how
  • Who pays for what
  • Periodic meetings & reviews
  • Expectations for both sides

Education and Information

  • Everyone need information, and a sales pitch - agree on how you're going to communicate it
  • Sales tools – flyers, POS, etc

Payment Rates and Terms

  • Margin expectations vary significantly by state and role
  • More money doesn’t always buy better results

Termination

  • Where allowed, should specify timeframe, notice requirements
  • May want to specify grounds to justify termination by either party

Other Areas to Address

  • Product samples – who pays, who approves
  • Decision-making and approval processes

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  • 11 months later...
Guest Liberty Bar - Seattle

Too bad that this thread has not continued, I'd love to read more about good/bad experiences with distributors and what is reasonable/what to expect when talking/making a deal.

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Thanks for sharing your recommendations Sonja! Very timely too as we're presently in the process of establishing relationships with distributors (in advance of product) and your discussion topics will definitely come in handy during our preliminary discovery discussions.

* Just in case anyone wonders why we would talk to distributors without product, we feel that often it works best to start a relationship with someone when we are not asking them to provide us something. We have done this with our government contacts with great success, as they are more forthcoming with suggestions when they do not feel they have to regulate our actions.

I too look forward to learning more about other distiller's distributor experiences.

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