Exclusive representation allows an entrepreneur to acquire the exclusive right to sell goods. Here is how it works.
Exclusive representation is a model similar to franchising. The exclusive representative negotiates an exclusive license on goods in a specific sales sector under an exclusive representation contract.
The producer or trader then delivers the goods to the exclusive representative in compliance with the date and quality defined.
The advantage for the producer is outsourced distribution of its product. For the exclusive representative, the aim is to have a competitive advantage, i.e. exclusive rights to distribute the product within a given territory or period of time.
This formula entails risks for the representative, however. Depending on the contract, he or she may be subject to performance requirements and investment obligations in terms of PR and marketing. These factors should be carefully considered, particularly when it comes to distributing an unknown product on the market, which may mean a delay before achieving success.