From an international value added distributors' perspective, they prefer investing in developing a territory for a vendor when they will be offered protection in the form of exclusivity. They don't see it in their interest to invest in developing a brand and then, once sales pick up, for the vendor to appoint another distributor.
|Expect distribution partners in Asia to|
ask for exclusive distribution rights.
What's your policy for handling exclusivity?
This is not quite the Catch 22 it might appear to be. I've found over the years working with a number of emerging companies that a straightforward, honest approach is in the interest of both vendor and distribution partner.
As a general rule, I avoid exclusive contracts and any contract language that contains the words exclusive or sole, unless the word is "non-exclusive." This is clear and straight forward. On the other hand, depending on the offering, for companies entering a new market having one partner per country may make sense in the beginning, depending on the offering and the market. (In fragmented or large markets -- China, for example -- it may be impossible for one partner to come close to providing reasonable market coverage and from the git-go multiple partners are required. Do your homework and figure out the best approach for your company.) Or, if you're offering a telecommunications product and your channels are the telcos of each country, you would naturally approach each telco as a partner.
Beware of distributors requesting exclusive distribution rights across several countries, for example, the Singapore-based distributor requesting exclusivity in Singapore, Malaysia and Indonesia, or the Swedish distributor demanding exclusivity in Scandinavia. Do your due diligence and make sure the distributor is capable of effectively selling your offering in each country.