Exclusive Distribution - Definition, Importance & Example
What is Exclusive Distribution?
Exclusive distribution is a mechanism of distributing goods wherein the manufacturer gives sole & special rights to one distributor to sell the goods. Exclusive distribution gives the single distributor authority to sell the goods in a particular region. In this, the role of wholesalers are minimized.
Importance of Exclusive Distribution
Basically any product can be distributed to consumers through three types of distribution:
1. Intensive
2. Selective
3. Exclusive
As a part of exclusion distribution, the goods manufacturer gives authority to one single distributor partner in a region.
This enables a smooth supply chain management between the two parties, and a smooth business operation.
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Characteristics of Exclusive Distribution
Some key elements are:
1. Single branding by the distributor
2. Exclusive territory rights to sell goods
3. No role of wholesalers
4. Exclusivity of high quality goods
Thus a single distributor only has the right to market that product in its specific territory.
Advantages
The rationale behind granting exclusive rights to the distributor are as follows:
1. To incentivize better promotion of the product.
2. Provide better customer service.
3. Maintain exclusivity of high quality products.
4. Helps in higher customer service & hence good brand loyalty.
Examples of Exclusive Distribution
High quality premium products usually utilize the exclusive distribution channel. Some key products like cars, furniture brands, exclusive clothing line, premium watches etc use this distribution channel. This maintains exclusivity as well as brand loyalty.
Hence, this concludes the definition of Exclusive Distribution along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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