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Definition

Exclusive distribution arrangement

Exclusive distribution arrangement is an agreement that gives a retailer or other intermediary the exclusive rights to sell a company’s products in a specific area for a specific period of time. The advantage to giving out an exclusive distribution agreement is to motivate a retailer or other intermediary to make a concerted effort to sell a firm’s products without having to worry about direct competitors. For example, if Nokia granted AT&T the exclusive rights to sell a new type of cell phone, AT&T would be more motivated to advertise and push the phone that if many or all cell phone companies had access to the same phone.

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