Distribution agreement, Ferndew Botanicals in New Zealand

Distribution agreement template with territory and targets

An exclusive distribution agreement is a trade: a territory in exchange for volume. This one appoints a New Zealand distributor for a skincare range at 48 per cent of recommended retail, with purchase targets rising from NZD 240,000 to NZD 420,000 across three years, and exclusivity that converts to non exclusive if a target is missed by more than 15 per cent.

Create a document with OneCraft9 A4 pages, editable, then download as a PDF

The document, page by page

Every page as it renders and as it prints, with nothing summarised. Read the wording before you reuse it.

Exclusive distribution agreement
Term starting 1 October 2027

Ferndew Botanicals in New Zealand

Between Ferndew Botanicals and Kauri Trade Supply Limited

Prepared by
Ferndew Botanicals
Date
Term starting 1 October 2027
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 2 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 3 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 4 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 5 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 6 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 7 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 8 of 9
Distribution agreement · Ferndew Botanicals and Kauri Trade Supply · DA-2027-09Page 9 of 9
Contents
Parties and appointment
1
1. Territory and exclusivity
1
2. The products and prices
2
3. Minimum purchase targets
3
4. Orders, delivery and title
3
5. Payment and credit
4
6. Marketing and the brand
4
7. Compliance, labelling and recalls
5
8. Reporting and stock
5
9. Intellectual property
6
10. Term and termination
6
11. What happens at the end
7
12. Liability and general
7
Parties and appointment

Made on 6 September 2027 between Ferndew Botanicals of 14 Alder Way, Brantwood, called the Supplier, and Kauri Trade Supply Limited of 32 Pilkington Road, Auckland 1072, New Zealand, called the Distributor. The Supplier makes a range of botanical skincare and wants it sold in New Zealand without opening its own office there.

New Zealand
Territory
3 years
Term
48% of RRP
Distributor price
NZD 240k
Year 1 target
1. Territory and exclusivity
1.1
The appointment
The Supplier appoints the Distributor as its exclusive distributor of the products in New Zealand. The Distributor buys the products from the Supplier and resells them in its own name, on its own account and at its own risk, and is not the Supplier’s agent.
1.2
What exclusive means here
During the term the Supplier will not appoint another distributor for New Zealand and will refer enquiries from the territory to the Distributor. The Supplier keeps the right to sell directly from its own website to consumers in New Zealand, and pays the Distributor 10 per cent of the value of those sales each quarter.
1.3
Outside the territory
The Distributor does not actively solicit customers outside New Zealand and does not appoint sub distributors without written consent. It may fill an unsolicited order from outside the territory, and tells the Supplier when it does.
2. The products and prices
2.1
The price list
The distributor price is 48 per cent of the recommended retail price for every product. The Supplier may change the list once in any 12 months on 90 days written notice, and any order already accepted is filled at the old price.
Code
Product
RRP
Distributor
FD-01
Marula cleansing oil, 150 ml
62.00
29.76
FD-02
Rosehip serum, 30 ml
89.00
42.72
FD-03
Ceramide moisturiser, 50 ml
74.00
35.52
FD-04
Mineral sunscreen, 100 ml
45.00
21.60
FD-05
Body balm, 200 ml
52.00
24.96
2.2
Volume discounts
A quarter in which the Distributor purchases more than NZD 60,000 attracts a further 2 per cent off the distributor price, and more than NZD 100,000 a further 4 per cent, credited against the following quarter rather than refunded.
3. Minimum purchase targets
3.1
The targets
Exclusivity is earned by volume. The Distributor purchases at least the amounts below in each contract year, measured on products shipped and invoiced, not on orders placed.
Contract year
Minimum, NZD
Quarterly pattern, NZD thousands
Year 1, 2027 to 2028
240,000
45, 55, 65, 75
Year 2, 2028 to 2029
320,000
70, 75, 85, 90
Year 3, 2029 to 2030
420,000
95, 100, 110, 115
Across the term
980,000
3.2
Missing a target
A shortfall of up to 15 per cent in any year is discussed and carried forward. A shortfall of more than 15 per cent lets the Supplier convert the appointment to non exclusive on 60 days written notice, or end the agreement under clause 10.2. Nothing is payable for a shortfall itself.
Targets are the price of exclusivity, not a debt
The Distributor never owes money for a target it misses. What it risks is exclusivity, which is the right balance when a distributor is investing in a market: the Supplier gets coverage or it gets its market back, and the Distributor is not exposed to a bill for stock it could not sell.
4. Orders, delivery and title
4.1
Placing an order
Orders are placed through the Supplier’s trade portal with a minimum order value of NZD 6,000. The Supplier confirms or declines within three business days and ships confirmed orders within 21 days. A shipment short by more than 5 per cent of line items is notified before it leaves.
4.2
Delivery, risk and title
Products are supplied free carrier at the Supplier’s warehouse. Risk passes when the goods are loaded onto the Distributor’s nominated carrier, and title passes when the invoice for them is paid in full. The Distributor arranges freight, import clearance and duties, and is the importer of record.
4.3
Short shipments and damage
A claim for shortage or damage in transit is made within seven days of delivery with photographs. The Supplier replaces goods that left its warehouse damaged or short at no charge, and does not carry the cost of damage in the Distributor’s own handling.
4.4
Rolling forecasts
With each monthly report the Distributor gives a rolling three month forecast by product. The first month of the forecast is firm and the Supplier may hold that stock against it. The other two months are indicative, and a change of more than 30 per cent between forecasts is explained.
5. Payment and credit
5.1
Terms
The first three orders are paid before shipment. After that the Distributor has 30 days from the invoice date, up to a credit limit of NZD 80,000. The limit is reviewed each year and the Supplier may reduce it on 30 days notice if payments run late.
5.2
Late payment
An overdue invoice carries interest at 1.5 per cent a month. While an invoice is more than 14 days overdue the Supplier may hold new shipments, and tells the Distributor before it does so rather than letting an order go quiet.
5.3
Retention of title and set off
Until an invoice is paid the products remain the Supplier’s property, the Distributor holds them as bailee, stores them so they can be identified, and the Supplier may recover them after written notice. Neither party sets off a disputed amount against an undisputed invoice.
6. Marketing and the brand
6.1
What each side spends
The Distributor spends at least 4 per cent of its net purchases on marketing the products in the territory, against a plan agreed each September. The Supplier contributes 2 per cent of net purchases, capped at NZD 8,000 a year, paid as a credit note on evidence of the spend.
6.2
Claims and approvals
All artwork, product claims and campaign copy are approved by the Supplier before use, within 10 business days. The Distributor does not make a therapeutic claim, does not describe a product as natural or organic beyond the Supplier’s approved wording, and does not run the brand in a discount campaign below 20 per cent off without approval.
6.3
Trade shows and samples
The Distributor exhibits the products at two trade events each year, with the Supplier contributing NZD 2,000 toward each from its marketing contribution. Samples and testers are supplied at 25 per cent of the distributor price, capped at 3 per cent of the previous year’s purchases.
7. Compliance, labelling and recalls
7.1
Who is responsible for what
The Supplier is responsible for the formulation, its safety assessment and the accuracy of the ingredient list. The Distributor is responsible for local labelling, any product notification the territory requires, and for keeping the records an importer must keep.
7.2
Recalls
A recall is decided by the Supplier, or by the Distributor where the law of the territory requires it to act. The Distributor runs the recall in the territory and the Supplier pays the cost where the cause is the product, while the Distributor pays where the cause is its own storage, labelling or handling.
7.3
Complaints and adverse reactions
The Distributor forwards any complaint of an adverse reaction to the Supplier within two business days with the batch code, and keeps a register of them. Neither party settles such a complaint in a way that admits a defect in the product without telling the other first.
8. Reporting and stock
8.1
The monthly report
By the 10th of each month the Distributor reports units sold by product, sales value, stock on hand by batch, and the retailers it supplied. The report is what the Supplier plans production from, so a late report is treated as a breach rather than an administrative slip.
8.2
Holding stock properly
The Distributor holds at least six weeks of forecast sales in stock, stores the products below 25 degrees and out of direct sun, and rotates by batch so that nothing is sold with less than nine months of shelf life remaining.
8.3
Checking the numbers
The Supplier may ask an independent accountant to verify the reports once in any 12 months, on 15 business days notice, at its own cost. If the verification shows purchases or sales understated by more than 5 per cent, the Distributor pays the cost of the review.
9. Intellectual property
9.1
Use of the brand
The Supplier licenses the Distributor to use its trademarks and product images to sell the products in the territory during the term, and for no other purpose. The Distributor does not register the marks or a similar name or domain in the territory, and assigns any such registration to the Supplier at the Supplier’s cost.
9.2
No repackaging or reformulation
Products are sold in the Supplier’s own packaging, unopened and unaltered, apart from a compliant local label applied over or beside the original. The Distributor does not decant, bundle into a new pack, or relabel with its own brand.
10. Term and termination
10.1
Term
Three years from 1 October 2027 to 30 September 2030. Either party may propose a renewal by 31 March 2030, and if nothing is agreed the agreement ends on its last day without either side being at fault.
10.2
Ending early
Either party may end this agreement for a material breach not fixed within 30 days of written notice, or immediately on the other’s insolvency. The Supplier may also end it after 30 September 2029 on six months notice if a target is missed by more than 15 per cent.
11. What happens at the end
11.1
Stock and customers
The Supplier may buy back unsold stock in saleable condition at the invoice price less 10 per cent, within 60 days of the end. Stock the Supplier does not buy back may be sold for a further 120 days on these terms. The Distributor hands over the list of retail customers it supplied.
11.2
No compensation for goodwill
Neither party owes the other compensation, an indemnity or a payment for goodwill merely because the agreement has ended at its natural end or under clause 10.2. Each party keeps what it earned during the term.
12. Liability and general
12.1
Liability and indemnity
The Supplier indemnifies the Distributor against a claim that a product as supplied was unsafe or did not match its ingredient list. The Distributor indemnifies the Supplier against a claim arising from its own storage, labelling, marketing claims or advice. Neither party is liable for indirect loss, and each party’s liability is capped at the value of products purchased in the previous 12 months.
12.2
General
Neither party may assign this agreement without written consent, except to a buyer of its whole business. Notices go to the addresses beside the signatures. This is the whole agreement between the parties about distribution in the territory and may be changed only in writing signed by both.
12.3
Events outside either party’s control
Neither party is in breach because of an event outside its reasonable control, including a shipping failure, a border closure or an ingredient shortage, provided it tells the other within five business days and works to limit the effect. If such an event lasts more than 120 days, either party may end this agreement on 30 days notice, and clause 11 then applies as if the term had ended.
12.4
Disputes and governing law
A dispute is first raised in writing and discussed by a senior person from each party within 15 business days. If it is not resolved, the parties mediate before starting proceedings, sharing the mediator’s fee. This agreement is governed by the law of the Supplier’s country, and either party may still apply to a court in New Zealand for an urgent order about stock, trademarks or a recall.
Execution
12.5
Counterparts and commencement
This agreement may be signed in counterparts, including by electronic signature, and the counterparts together form one agreement. It takes effect on 1 October 2027 whether or not both parties have signed by then, provided the Distributor has placed its first order and the Supplier has accepted it.
For Ferndew Botanicals
Name
:
Position
:
Date
:
For Kauri Trade Supply Limited
Name
:
Position
:
Date
:

Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Cover and contents
An executive cover naming the brand and market, then a contents list to the twelve parts.
1. Territory and exclusivity
The appointment, what exclusive covers, the direct sales carve out and sales outside.
2. The products and prices
The 48 per cent rule, a five product price list and the quarterly volume discounts.
3. Minimum purchase targets
Three years of targets with quarterly patterns, and what a shortfall costs.
4. Orders, delivery and title
Minimum orders, lead times, risk and title, short shipments and rolling forecasts.
5. Payment and credit
Prepaid first orders, 30 day terms, the credit limit and retention of title.
6. Marketing and the brand
The 4 per cent spend, the maker's contribution, claim approvals and trade shows.
7. Compliance, labelling and recalls
Who owns the formulation, who owns the label, and who pays for a recall.
8. Reporting and stock
The monthly report, stock cover and shelf life, and verification of the numbers.
9. Intellectual property
The trademark licence for the term, and the bar on repackaging or relabelling.
10 and 11. Ending and after
The three year term, termination grounds, the buy back and the sell off period.
12. Liability and general
Mutual indemnities, the liability cap, force majeure and the dispute path.

Clauses in this document

How to adapt this agreement

For a non exclusive appointment, drop the targets or cut them sharply, because a target without exclusivity is a demand rather than a bargain. For a distributor that will hold consignment stock, replace the retention of title clause with a consignment schedule and say who insures the stock while it sits in their warehouse. For regulated goods such as therapeutic products or food, expand clause 7 into its own schedule naming the registrations, who holds them and what happens to them if the agreement ends, since a registration in the distributor's name can trap a brand in a market it wants to leave.

What makes this document work

The price list is one rule applied five times

Every product is 48 per cent of recommended retail, so the cleansing oil at NZD 62.00 is NZD 29.76 and the serum at NZD 89.00 is NZD 42.72. A distributor can price a new line without asking, and a price rise is one notice rather than five negotiations.

Targets cost exclusivity, not money

The table runs NZD 240,000, 320,000 and 420,000 across three years, with the quarterly pattern beside each. Miss by more than 15 per cent and the appointment can go non exclusive on 60 days notice. A callout says plainly that nothing is payable for a shortfall itself.

Compliance is split at the border

The maker owns the formulation, its safety assessment and the ingredient list. The distributor owns local labelling, any product notification the territory requires and the importer records. Recall costs then follow the cause rather than the party with the shallower pockets.

Questions people ask

What should a distribution agreement include?

The territory and whether it is exclusive, the products and prices, minimum purchase targets and what missing one does, how orders are placed and delivered, payment and credit terms, marketing obligations, who handles compliance and recalls, reporting, the term, and what happens to stock when it ends.

What is the difference between a distributor and an agent?

A distributor buys the goods and resells them in its own name, on its own account and at its own risk, which is what this agreement does. An agent sells on the supplier's behalf for a commission and never owns the stock. The difference changes who carries credit risk and who sets the retail price.

How do minimum purchase targets work?

They set the volume a distributor must buy to keep the deal it was given. Here they rise across three years and are measured on products shipped and invoiced rather than ordered. A shortfall of up to 15 per cent is discussed and carried forward, and anything larger puts exclusivity at risk.

Can a supplier still sell directly in an exclusive territory?

Only if the agreement says so. This one reserves the maker's own website sales to consumers in New Zealand and pays the distributor 10 per cent of their value each quarter, which is a common compromise: the brand keeps its direct channel and the distributor is not competing against its own supplier for nothing.

What happens to unsold stock when a distribution agreement ends?

The maker may buy back stock in saleable condition at the invoice price less 10 per cent within 60 days. Anything it does not buy back may be sold for a further 120 days on the same terms. The distributor also hands over the list of retail customers it supplied during the term.

Is compensation payable when a distribution agreement ends?

Not under this agreement. Clause 11.2 says neither party owes the other compensation, an indemnity or a payment for goodwill simply because the term has ended or the agreement was terminated under clause 10.2. Some countries impose their own rules, so this is one clause to check locally.

Build your own in about a minute

The button below opens the generator with this use case already described. Change the wording to match your own, generate, then edit anything you like.

Make my distribution agreement template with territory and targets

Other document examples

Trademark licence agreement with quality control and royalties

A trademark licence lets someone else put your mark on their goods, and the clause that keeps it worth doing is quality control. This one licenses three registered marks from a football club to an apparel maker for three years, at 8 per cent of net wholesale sales with a rising minimum, and approval of every pre production sample in ten business days.

IP assignment agreement template with a schedule and moral rights

An IP assignment transfers ownership of work that already exists, which is why the schedule matters more than the wording around it. This one moves six named works from a departing contract developer to the startup that paid for them, licenses back her own library, and lists what gets handed over in the ten days after signing.

Software licence agreement template with seats, term and support

A software licence agreement has to answer three questions before anything else: what a seat is, what happens when the software is down, and who gets the data at the end. This one licenses a hosted practice management suite to a medical practice for 25 named users at $9,600 a year, with a support table, uptime credits and a 30 day export.

Want the steps in the builder? Read Create a document with AI, then Add a cover page to your document. For everything this generator can do, see the document maker.

Sources

Written and checked by the OneCraft team. Last checked .