What to check when negotiating exclusive distribution rights
Hello from MAKENOV. Getting exclusivity is easier than keeping it. What is written in the contract decides your outcome years later.
How far does exclusivity reach?
The single word "exclusive" contains at least three layers. Territory: all of Vietnam, the south only, or specific provinces. Channel: offline only, or online included — especially important. Product range: one item or the whole brand — the value differs enormously. Thinking you got the whole brand when the contract covered one SKU is a common story; write the item numbers into the contract.
How much must you sell to keep it?
Most exclusivity contracts carry a minimum volume. Miss it and exclusivity lapses or converts to a normal contract. Check two things: whether the first-year target is realistic given the market-opening period, and whether missing it triggers immediate termination or a grace period.
Term and renewal
| Clause | What to check | Common trap |
|---|---|---|
| Term | Initial years | A 1-year term ends before you recover the investment |
| Renewal | Automatic or renegotiated | Renegotiation is how terms deteriorate |
| Termination | Trigger conditions | Watch for unilateral termination clauses |
| Supply price | Increase rules and cap | No cap erodes your margin |
| Leftover stock | Handling at contract end | No return clause means a loss |
Is the price fixed?
If the supply price can rise at any time, exclusivity loses meaning: you grow the market and the added volume becomes the supplier\u2019s profit. Put increase rules, a cap and an advance-notice period into the contract — at minimum the notice period, so you can plan next quarter\u2019s pricing.
When does exclusivity break?
Two common leaks: parallel imports, where a third party buys elsewhere and ships into Vietnam — make the supplier contractually obliged to act against it; and the supplier\u2019s own cross-border online sales — include online in your scope, or at least obtain a no-direct-sales clause.
FAQ
Can I ask for exclusivity from the start?
Yes, but suppliers want proof of sales ability; a short initial term extended on performance is easiest for both sides.
Does exclusivity mean cheaper supply?
Not necessarily — exclusivity is a market right, not a price term. Negotiate them separately.
Do verbal agreements count?
Hard to prove in a dispute. Scope, term and minimum volume must be in writing.
Closing
MAKENOV shows per product whether exclusivity and master-distributor talks are open, and supports early discussions on scope, MOQ, licensing and marketing support. Final terms are decided directly between you and the supplier. See the products open for exclusivity talks.
