Does anybody know if I should have distribution agreement before the first deal with the supplier?

Question

I am starting a business and I am about to make my first order. I will be importing a brand from Latin America. This is a line of swimsuits that is very popular in latin america, have been feature in sport illustrated and is not yet in Australia. The supplier is looking forward to work with me to bring their products to Australia. So I am not sure if it is to soon for a distribution agreement or should I wait to do it later on. I am just worry that if I don't get the exclusive distribution rights before working with them, I will just be working for free for them and somebody later on can just call them and make orders directly to them. In other words I will be advertising and doing the marketing for them for free.

But is it to soon to make that step(Distribution agreement)?

Please can anybody help me?

Answer 1

You should try to get a distribution agreement but whether you can is another matter. You would need to convince the company it is in their interests- either paying a premium on the product or demonstrating that the product will sell more (Because of your advertising activities) with such a deal.

The fact that you have already agreed in principle to order from them puts you in a weaker position than if you dealt with this on your first conversation with them.