Nature and types of distributorship
Nature and types of distributorship

The following Commercial guidance note provides comprehensive and up to date legal information covering:

  • Nature and types of distributorship
  • The nature of distribution
  • Distributor and manufacturer
  • Types of distribution arrangement

Brexit: As of exit day (11pm on 31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see Brexit Bulletin—key updates, research tips and resources and Brexit toolkit.

This Practice Note considers distribution arrangements in general and the different types of arrangements that are commonly used. It considers the difference between sole, exclusive, non-exclusive and selective distribution agreements and the relationship between the distributor and the manufacturer.

The nature of distribution

Distribution is an arrangement under which the distributor buys goods from a manufacturer and resells them on its own behalf. By contrast, in an agency agreement the agent does not buy the goods but arranges sales for the manufacturer. For a summary of the differences between agency and distribution see: Agency and distribution compared.

Distribution is commonly used where a manufacturer needs help in bringing products to a particular market; for example, in an overseas territory with which the manufacturer is not sufficiently familiar or connected, or where the nature of the products does not require direct contact with the customer. Distribution arrangements may be entered into by wholesalers of products, who are