What is "Distribution Rights"???
Answer: It's an agreement between the manufacturer and the distributor (dealer) on where and how the product can be sold. (Example: Online store Music123 can only ship to USA addresses and Canada for major brand like Fender, Marshall, Gibson...etc)
Why need it: To protect the market of the distributors from other countries.
Why protect: To maintain the relationship between the manufacturer and all it's distributors around the world.
Why maintain: Let's say there is no distribution rights and the online store ship all over the world, it will hurt the local distributor sale. The manufacturer don't want that, as the local distributor has higher turnover, provide frontline service (salesman & retail showcase) and support (warranty repair). Which in turns is more benifical to the manufacturer. A working "partner" will help to carry the brand name much more further too.
Example: Singapore got 20 rouge online order per month, the local distributor nromally sells 100 items of the same brand. This 20 online order will hurt the local distributor sales, and he complain to the manufacturer. The manufacturer will take action on the rouge online store. Because, he want to protect his distributor as there is more sale from the distributor and all the other working relationship too.
Disadvantage of single item online purchase: High shipping cost, not possible to check before purchase, risk shipping damage, no warranty, normally not economical to return for whatever claim.
So a distribution right is a very civilized method for maintaining the business sense of the maunfacturer. Thus most will adopt it. Hope this explaination can help fellow softies understand product marketing better. :wink:
Answer: It's an agreement between the manufacturer and the distributor (dealer) on where and how the product can be sold. (Example: Online store Music123 can only ship to USA addresses and Canada for major brand like Fender, Marshall, Gibson...etc)
Why need it: To protect the market of the distributors from other countries.
Why protect: To maintain the relationship between the manufacturer and all it's distributors around the world.
Why maintain: Let's say there is no distribution rights and the online store ship all over the world, it will hurt the local distributor sale. The manufacturer don't want that, as the local distributor has higher turnover, provide frontline service (salesman & retail showcase) and support (warranty repair). Which in turns is more benifical to the manufacturer. A working "partner" will help to carry the brand name much more further too.
Example: Singapore got 20 rouge online order per month, the local distributor nromally sells 100 items of the same brand. This 20 online order will hurt the local distributor sales, and he complain to the manufacturer. The manufacturer will take action on the rouge online store. Because, he want to protect his distributor as there is more sale from the distributor and all the other working relationship too.
Disadvantage of single item online purchase: High shipping cost, not possible to check before purchase, risk shipping damage, no warranty, normally not economical to return for whatever claim.
So a distribution right is a very civilized method for maintaining the business sense of the maunfacturer. Thus most will adopt it. Hope this explaination can help fellow softies understand product marketing better. :wink:
