Cancellation of distribution contract

[abigail69]

Hello,

We have been the exclusive UK distributor for a US company for the past 3 years and have built up an extensive UK and European customer base. Our supplier has just given us 4 months notice of termination as they going to be working with a new UK distributor. As a result of this we will loose all the accounts (with associated profits), we have built up over the past 3 years and these accounts (again with associated profits), will pass immediately to the new distributor.
What rights if any do we have with regards to compensation from our supplier for loss of business as a result of their decision?
Thanks for your help

 

[forumsme]

That's a tough one. I've worked in international IT distribution for the last years and generally the contracts are not very sympathic to your point- nominally because the "account ownership" is based upon the relationsh which should be you.

Are you driving a fulfillment or value model? B2B or B2C? Direct or channel?

Best logical option is move very quickly to find a a new supplier and aggressively target those existing customers before the relationship migrates. I can imagine any competitor of your current supplier would be very interested in a ready made channel or customer database.

 

[forumsme]

record stuck ;-)

Welcome anyway.

 

[mark dee]

If you dont have a contract with them then I dont think you have much come back on them. I cant understand why you should give them the customers you have been supplying to as they are yours not their customers.

The relationship and risk is with you not them.

I guess they have some hold over you otherwise you wouldnt pass them on.

Do you not have a competing product you can supply to these customers to mitigate your loss ?

 

[gregs2769]

That's a tough one. I've worked in international IT distribution for the last years and generally the contracts are not very sympathic to your point- nominally because the "account ownership" is based upon the relationsh which should be you.

Are you driving a fulfillment or value model? B2B or B2C? Direct or channel?

Best logical option is move very quickly to find a a new supplier and aggressively target those existing customers before the relationship migrates. I can imagine any competitor of your current supplier would be very interested in a ready made channel or customer database.

I would agree with this - get a competitor on board and change all your accounts over.

I know you can't name name but what type of product is it?

 

[Little UpStarts]

Have the US supplier done anything to breach terms agreed? Do you have an agreement with them? Compensation - I doubt it unless specified in your agreement & they are in breach.

Not teaching you how to suck eggs but in my experience the role of the distributor is usually limited until the partner has the right opportunity to either go direct or move to an alternative distributor where they can either improve their terms, pricing, service or all three.

Most distributors I work with are continually looking at new business development to fill these types of gaps.

forumsme hit the nail on the head, find a new supplier & get to your accounts before your competitor does.

 

[GraemeL]

Old old thread.