What sort of compensation should we ask for in an exclusivity agreement?

Discussion in 'Growing and Managing a Business' started by mikewelsh, Jun 5, 2012.

  1. mikewelsh

    mikewelsh
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    Our reseller wants to be our exclusive partner. What kinda compensation should we ask for? Should we work on minimum sales guarantee or how?

    We never done exclusivity before.
     
  2. paralin

    paralin
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    It is better thing that you mentioned in this post that we should work for minimum sales guarantee in start of our business specially. It is useful idea to be safe and risk is low in this kind of strategy. I would like to go with that.
     
  3. Fergal

    Fergal
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    Personally I'd say that's one of the most important factors that you need to consider. If a reseller has exclusivity for a certain area, you need to be confident that they are achieving a high level of sales for you in that area. If they are not making the required sales, you need to be able to start working with someone else, so that you can achieve the sales volume needed by your business.

    Are you confident that the reseller in question has the skills, resources and motivation to represent your product and achieve a strong market share for your product, in their area?
     
  4. Navida

    Navida
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    You should check the background of retailer. Check his previous record. This will inform you about his credibility and also help you in taking decision that whether you go for it or not.
     
  5. Mark T

    Mark T
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    You should set your own price that would be equal to what is expected and what will be your responsibility, What you would work for would be a major factor to know as well as it will hugely determine how much your compensation should be.


    Regards,
    Mark T
     
  6. gogreenbusiness

    gogreenbusiness
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    How good you think is your reseller? Do they have their own network to sell you product? If not, perhaps you should think twice before engaging in any exclusive contract with them. Signing exclusivity means you are limiting your market to just one particular partner. Aside from minimum guaranteed sale and mark ups, you can also demand for royalty fee, in which most of the time 10-15% of the total sale.
     

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