Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.
When the firm distributes its brand through just one or two major outlets in the market, who exclusively deal in it and not all competing brands, it is said that the firm is using an exclusive distribution strategy. This is a common form of distribution in products and brands that seek a high prestigious image.
Typical examples are of designer ware, major domestic appliances and even automobiles. By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediaries price, promotion, credit inventory and service policies. The firm also hopes to get the benefit of aggressive selling by such outlets.
Most exclusive dealing contracts are beneficial because they encourage marketing support for the manufacturer's brand. By becoming an expert in one manufacturer's products, the dealer is encouraged to specialize in promoting that manufacturer's brand. This may include offering special services or amenities that cost money, such as an attractive store, trained salespeople, long business hours, an inventory of products on hand, or fast warranty service.
When a product has yet to become known on the market, the distributor must invest an important amount of time and financial resources to develop the product’s reputation and market positioning. Thus, exclusive rights are a major motivator for a distributor who must market a product that he does not own and that has little notoriety yet. Indeed, every product requires some time between its introduction to the market and commercial success. The commercialization efforts accomplished before a product becomes profitable constitute a major investment. In consequence, a distributor who invests his resources in such an endeavor wishes to insure he will share its future benefits. Without the guaranty of exclusive rights over a given territory, the risks related to a product’s marketing might become too important for a distributor to invest himself in that undertaking. Many companies have exhausted their market potential and are considering other markets to increase profits. But given the lack of awareness of the market structure, laws, lack of knowledge of the language, lacking sales channels and basic skills for development in foreign markets, these companies cooperate with us. In our turn, when we receive an exclusive representation in the region, we contact the largest distributors, networks and promote the goods for some %. Our company can act as an intermediary between the manufacturer and the distributor. It may itself buy and resell with a higher margin, or it may simply establish distribution channels. In any case, our company will make every effort to achieve the maximum result.