exclusive distribution

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Exclusive distribution is the process of limiting the number of intermediaries to keep control over the service level and outputs offered by re-sellers.

Further discussion on exclusive distribution:

Channel intermediaries are known as the “middleman” and help move and sell products between producers and consumers. Intermediaries may include:

  • wholesalers
  • retailers
  • brokers
  • distributors
  • salespeople
  • agents

Producers who want to keep control over service levels and outputs by retailers will opt for exclusive distribution. This type of distribution requires a closer relationship between the seller and reseller.

Examples of exclusive distribution:

Industries engaged in exclusive distribution often include:

  • Automakers
  • Some high-end electronics (Like Apple Computers)
  • Major appliance manufacturers
  • Some clothing companies, especially woman’s apparel

As an example, the top woman’s apparel brand, Gucci, had licensed its products to many retailers, some of which discounted Gucci’s products. The licensing to several retailers tarnished the brand’s image. As a result, Gucci canceled contracts with its resellers and controlled distribution of its products as well as opening their stores that sold their products.

 

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