Skip to content
Finding buyers and distributors

Choosing a distributor abroad: questions to ask before you sign

By [Name]Last updated

Choose a distributor by evidence, not by enthusiasm. Check that they sell to the buyers you want, that they have the people, stock and service to do it, and that they agree to targets, a clear territory and a way to end the agreement. Ask the same questions of every candidate, call references, and have a lawyer who knows the target country read the contract.

This guide is general information, not legal advice.

What to look at

Compare candidates on six points:

CriterionWhat to find out
FitDo they sell to your type of buyer? Do their other products complement yours or compete with them?
ReachWhich regions and customers do they cover? Do they sell online, to dealers, to projects?
CapacityHow many people sell and support? Do they hold stock, offer service, training, demonstrations?
ReputationWhat do customers and other suppliers say? How long have they been trading?
Financial healthCan they pay on time and fund stock?
CommitmentWhat do they plan to do in the first twelve months, and what do they ask from you?

Questions to ask the distributor

Use these in the first calls and again before you sign.

Business and fit

  1. Which brands and products do you sell now? Which ones compete with ours?
  2. Which customers buy from you, by type and region?
  3. Why do you want our products, and what gap do they fill?

Capacity
4. Who will be responsible for our products? How many people sell and support?
5. How much stock do you plan to hold, and how will you finance it?
6. What service, repair, spare parts or training can you provide?

Plan
7. How do you plan to introduce our products in the first twelve months?
8. What sales do you expect, and what do you need from us to reach them?
9. Which marketing and trade fairs will you use?

References and checks
10. Can we speak to two customers and to a supplier whose products you distribute?
11. Can you share company registration details and recent financial information?

Write down the answers. Consistent, specific answers are a good sign. Vague answers and changing stories are not.

Checks you can do yourself

  • Look up the company in the national business register: legal name, registration number, date of founding, directors, status.
  • Review the website and social profiles: are they current? Do they show real products, customers and people?
  • Search for the company and the people with words such as "complaint" or "problem", in the local language.
  • Speak to references and ask about payment, service and honesty.
  • Ask your bank or a credit agency for a credit report if the commitment is large.
  • Meet them if you can, at their site or at a fair.

Red flags

  • They ask for exclusivity for a large territory before they have shown any plan.
  • They do not want to give company details or references.
  • They offer to order a large quantity immediately with unusual payment terms.
  • They carry many competing brands and give no reason why you would be a priority.
  • They want ownership of your trademarks, product data or customer lists.
  • They push you to sign quickly.
  • Answers change between conversations.
  • Their website and company records do not match what they told you.

Exclusivity and territory

Two points need to be clear in the agreement.

Territory. Name the countries, regions or customer groups. Say what happens with customers that sit across borders and with online sales.

Exclusivity. If you grant it, attach conditions: minimum purchase or sales targets per year, a review date, and a right to end exclusivity or the agreement if targets are not met. Think about whether exclusivity applies to all your products or to a range.

Competition rules can limit what you may agree. In the European Union, rules on vertical agreements, including the Commission's block exemption regulation (Regulation (EU) 2022/720), restrict some clauses, such as limits on passive sales. Rules differ in other countries. Do not copy a contract from another market without checking.

Agent or distributor

A distributor buys and resells in its own name. A commercial agent acts for you and earns a commission. The legal position is different. In the European Union, a directive (Council Directive 86/653/EEC) protects self-employed commercial agents, for example with rules on commission, notice and payment at the end of the relationship. Distributors are not covered in the same way, but national law and court practice can give them protection in some countries. The label in the contract is not always decisive. Ask a local lawyer how the relationship would be treated.

Points to put in the agreement

This list is a starting point for your discussion with a lawyer.

  • Parties, products and price list, and how prices change.
  • Territory and exclusivity, with targets and review.
  • Term, renewal and notice.
  • Ordering, delivery, payment terms and retention of title.
  • Minimum purchase or sales commitments.
  • Marketing, trademarks and use of your material.
  • Service, warranty and product liability responsibilities.
  • Stock and customer data when the agreement ends.
  • Applicable law and how disputes are settled.
  • Compliance topics: export controls, sanctions, anti-corruption.

After you choose

Do not stop at the signature. Agree a first-90-day plan, send training and material, introduce your key contacts and set a regular call. Review sales against targets every quarter.

Your website helps the new partner sell. Product information, certificates and downloads in the partner's language are what their customers will ask for first.

Checklist before you sign

  • Candidate chosen from a shortlist, with the same questions asked of all.
  • Company details, references and financial information checked.
  • Territory, targets and review date written in the agreement.
  • Exclusivity only against commitments.
  • Trademarks and data stay with you.
  • A clear exit: notice, stock, customers.
  • A lawyer with local knowledge has read the contract.
  • First-90-day plan agreed.

Sources

This guide is general information. Laws change and differ by country. Check the current text and ask a qualified lawyer.

FAQ

Questions about choosing a distributor

Should we give a distributor exclusivity?

Only in return for something: minimum purchase targets, a clear territory and a right to end the agreement if targets are missed. Exclusivity without targets means you cannot sell in that territory even if the distributor does little.

How long should the first agreement run?

Many manufacturers start with a short initial term, for example one to two years, with a review and a clear way to extend. A longer term can follow once results are visible. Agree what happens to stock and customers at the end.

What if the distributor wants all the rights to our brand?

Keep ownership of your trademarks, product data and marketing material. Allow the distributor to use them to sell your products, and nothing more. Have the point written in the agreement.

Can we check a distributor ourselves?

Yes, a lot. Check the company register, the website, references, news and social profiles, and ask for financial or credit information. For larger commitments, use a credit agency or your bank. A market study can also show whether the candidate fits the market. See Know Your Market.

See how distributors in your target market find you