Businesses have different opportunities when it comes to selling their products to consumers. They can either promote the items themselves or look for other individuals to be sole distributors. Companies embark on various dealership agreements with smaller enterprises to ensure the sale of their goods. These distributors also tap other resellers interested in managing the selling process. Hence, reseller agreements come in to focus. Learn more about this basic agreement with this article, and read now.
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What Is a Reseller Agreement?
When formalizing the business partnership with other entrepreneurs, individuals have to produce legal and professional documents to complete the arrangement. A reseller agreement serves as the bridge between the distributor or wholesaler and the reselling party. The material provides an outline for the benefits, restrictions, and conditions aligned for the two parties. Additionally, it acts as a guide in assisting the resellers when it comes to the payment agreement received from the collaboration.
Many small firms resort to reselling rather than producing goods because of many factors. Sometimes, the capital is not enough to launch products or be service providers for the community. According to Forbes, the resale fashion industry had a revenue of over $24 billion in 2019. In a small city, several tiny boutiques sell fashion clothes, accessories, and items as a resale from bigger brands. No matter how insignificant these stores look, it brings economic relief for any state or country.
How To Write a Professional Reseller Agreement
A resale agreement or a product reseller agreement is an essential tool in finalizing the collaborative efforts of two parties. This service agreement ensures that the distributor and reseller have the same objectives. So, what are the steps in making the authorized reseller agreement?
1. Enumerate the Products to Sell
When making the document, you have to begin with the list of items to sell. Apart from the type of product, you should include the specifications such as color, brand, quantity, and even weight. In this process, you can avoid miscalculations and misplaced units. Use a reseller agreement checklist to organize every detail of the contract’s contents.
2. Specify the Terms and Conditions
After that, the terms and conditions of the agreement should follow. Here, you will discuss the restrictions and provisions between the two parties. Will it be an exclusive reseller agreement or a non-exclusive reseller agreement? Moreover, it also covers the extent of the agreement.
3. Discuss Prices and Compensation
Next, the focus will be on the pricing rates, compensations, and benefits. Resellers have discounts and freebies from the wholesalers. Besides having firsthand knowledge of the goods, the resellers may also receive bonuses from distributors. Most resellers have distribution plans when they obtain the products. With that, they can smoothly sell the materials to different folks.
4. Include a Non-disclosure Clause
And lastly, the contract has a non-disclosure agreement to secure the business procedures and trade secrets of the distributor or wholesaler. If the reseller breaches the deal, there could be penalties. In a way, the non-disclosure clauses preserve the working relationship between the two entities.
How can I differentiate the distribution agreement versus the reseller agreement?
These two terms may seem interchangeable, but they have different connotations. For distribution agreements, the distributor directly receives the products from the company and can either sell the goods or look for resellers. On the other hand, reseller agreements usually get their deals from wholesalers and distributors rather than the manufacturer. While distributors have inventory reports, it is the discretion of resellers to have one or not.
What are some of the things I can’t resell?
You can sell different items to other people. However, there are some exceptions to the business. For instance, you can’t resell animals, recalled products, prescription medication, and event tickets. If caught trading these things without permission and permits, you can get in a lot of trouble.
What are some advantages of being a reseller?
Most sellers undergo authorized reseller programs before they take part in the exchange of goods. As a channel partner, resellers can acquire samples of products before reaching the market. Additionally, they also get information about incoming goods or proposed products. In many cases, the person can have independent reseller agreements and commission agreements with distributors.
The end-user needs to receive the product in pristine condition, whether through the manufacturer, distributor, or reseller. After all, the top priority of businesses are consumers and target market. Through the various channels, these goods are delivered to the right people. And in return, these emerging companies and entrepreneurs will receive the result of their investment agreement—sufficient profit and happy audiences.
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