Exclusive Distribution

Knowledge Center

What is Exclusive Distribution?

Exclusive Distribution takes place when suppliers enter into agreements with one (or very few) retailer(s) which will be the only company in the specified geographic areas to carry certain brands and/or product lines. Often this strategy is chosen for branding reasons.

Benefits of Exclusive Distribution. Advantages.

1. CONTROL: Since the exclusive distributor is dependent on the firm, the firm has a lot of control over it.
2. FOCUS: Exclusive distribution helps to keepthings simple for the firm. It need not worry of losing its distributor to the competitor, because it has a strong alliance. Hence it can focus on winning over the competition rather than on its distributors.
3. AVAILABILITY: Exclusive distributors are able to stock a lot of inventory. As a result, products are quickly available to retailers and wholesalers.
4. FINANCIAL: The exclusive distributor is expected to have good cash in hand and to carry substantial inventory. As a result, the inventory risk is mainly on the distributor and the firmss finances are safe.
5. MARKET PENETRATION: This becomes easier for the firm, because it does not need to cover its own back and does not need to spend resources on finding, convincing and maintaining the distribution channel. It is able to focus on building the brand and doing promotional activities so that its penetration in the market becomes much better.
6. LOCALIZATION: If the firm is new in a foreign market, is it unfamiliar with local customs, consumer preferences, laws, etc. An agreement with a local exclusive distributor can be very helpful in this situation.

Drawbacks of Exclusive Distribution. Disdvantages.

1. DEPENDENCE: Obviously a dependency is created on the exclusive distributor. But that dependence is often two-way.
2. TRUST: Due to mentioned dependency, the exclusive distributor better be trustworthy. Otherwise, he might use the provided marketing budgets for other uses.
3. STRATEGIC RISK: Due to mentioned dependency, if there is a severe conflict with an exclusive distributor, the firm might lose the entire market and due to the excellent relations of the exclusive distibutor in the market it could be difficult to switch to another distributor.

Distribution ("Placement") is one of the 4 Ps of the Marketing Mix.

Forum Forum about Exclusive Distribution. 🔥 Exclusive distribution increases Market Penetration Exclusive distribution increases the market penetration as the company is able to focus strongly on its customers.... 0   1 comments Start a new topic about Exclusive Distribution Sign up for free

Courses about Exclusive Distribution. Beginners Course Advanced Course Course for Experts

Expert Tips Advanced insights about Exclusive Distribution. Here you will find professional advices by experts. Consultancy Tips Teaching Tips Practical Implementation Tips

Information Sources Various sources of information regarding Exclusive Distribution. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Tools Useful tools regarding Exclusive Distribution. News Videos Presentations   Books Academic More

Compare with: Selective Distribution  |  Marketing Mix

Return to Management Hub: Marketing & Sales  |  Supply Chain & Quality

More on Management  |  Return to Management Dictionary

This ends our Exclusive Distribution summary and forum.