Sales Intermediaries in the Supply of Goods Toolkit | Practical Law

Sales Intermediaries in the Supply of Goods Toolkit | Practical Law

A collection of links to resources on agency, distribution, resale, and franchising, and the use of third-party intermediaries, such as distributors, resellers, agents, independent sales representatives, and franchisees in the supply of goods.

Sales Intermediaries in the Supply of Goods Toolkit

Practical Law Toolkit w-040-9582 (Approx. 10 pages)

Sales Intermediaries in the Supply of Goods Toolkit

by Practical Law Commercial Transactions
MaintainedUSA (National/Federal)
A collection of links to resources on agency, distribution, resale, and franchising, and the use of third-party intermediaries, such as distributors, resellers, agents, independent sales representatives, and franchisees in the supply of goods.
Product manufacturers often rely on sales intermediaries to market, sell, and deliver their products through the supply chain to other sales intermediaries, end users, or both. The primary categories of sales intermediaries are:
  • Distributors (including value-added distributors and wholesalers).
  • Resellers (including retailers and value-added resellers).
  • Agents (also known as independent sales representatives or sales agents).
  • Franchisees.
The definition and use of these and other terms (such as dealers and original equipment manufacturers) to refer to sales intermediaries can vary significantly by jurisdiction and industry. Also, legal considerations, including antitrust law concerns may apply.
This Toolkit contains links to a selection of US resources on the use of agents, distributors, resellers, and franchisees as sales intermediaries in the supply of goods, including:
  • Legal issues related to the use of sales intermediaries in the supply of goods, including related antitrust considerations.
  • Templates for agreements on agency, distribution, and resale.
For a collection of links to resources on other commercial topics relevant to the supply of goods, including drafting sale of goods agreements, logistics and transportation, environmental, social, and governance (ESG) issues in the supply chain, the parties' rights and obligations under the Uniform Commercial Code (UCC), credit support in sale of goods transactions, and allocation of liability and risk, see Supply of Goods and Services Agreements Toolkit. For a collection of links to resources on the international sale of goods, including resources on sales intermediaries used in the supply of goods in international transactions, see Supply of Goods and Services Toolkit (International).

Sales Intermediaries

For overviews on the supply chain and sales intermediaries, see Practice Notes:
For guidance on conducting due diligence of sales intermediaries and third-party risk management, see:
For information on the use of sales intermediaries and related antitrust considerations, see Practice Notes:
For guidance on antitrust considerations when engaging third-party intermediaries, see Antitrust Considerations for Agents, Contractors, and Third Parties Checklist. For guidance on reviewing a distribution agreement for potential antitrust risks, see Antitrust Considerations for Distribution and Dealer Agreements Checklist.

Distribution and Resale

The term distributor is often used to refer to third-party intermediaries that purchase goods from manufacturers, resell them to others in the supply chain, and provide valuable services, such as product marketing, warehousing, and post-sale support. Resellers, like distributors, typically buy products for their own account and resell them to other parties in the supply chain. However, distributors and resellers typically occupy different positions and serve different functions in the supply chain. For example, in some jurisdictions and industries resellers are typically intermediaries that sell primarily to end users and do not provide valuable services like warehousing and inventory management usually associated with distributors.

Agency

Agents (usually referred to as sales representatives) in the context of sales intermediaries are independent contractors that market, promote, and solicit the sale of products to potential end user customers in specified territories on behalf of a seller, usually a product manufacturer, distributor, or reseller. Agents are responsible for finding customers and soliciting orders on behalf of the seller, but do not usually purchase goods from the seller themselves or contract with customers in their own name.

Franchising

Manufacturers in certain industries, such as food and beverages, use franchisees to bring products to market. Different from agents, resellers, and distributors, a typical franchising arrangement does not focus on product resale and delivery. Instead, the focus is allowing franchisees to produce, sell, and distribute the franchisor's products using the franchisor's trademarks or trade names and other intellectual property within the franchisor's business and operational requirements in exchange for periodic payments from franchisees.

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