Published on · Moova Intelligence team
In many markets, the distributor is the one who actually puts the product in front of the end customer. It buys, imports, stores, sells and often handles after-sales service. That is why choosing the wrong distributor is costly: the product sits on shelves, the brand wears out and exiting the contract can be difficult.
A distributor is not a sales representative
It helps to separate the roles first. A distributor buys the goods and resells them on its own account, taking on inventory and credit risk. A commercial representative brokers sales on behalf of the represented company, earns a commission and does not buy the goods. The two models call for different contracts and precautions.
Selection criteria
Coverage. In which regions and channels does the distributor really sell? Ask for the customer list by channel type, not just a coverage map.
Portfolio. Which other brands does it carry? Complementary products help; direct competitors may mean your product will not be a priority.
Operational capacity. Warehousing, fleet or logistics partners, sales and technical staff, and the ability to support customers in the local language.
Registrations and licenses. In several sectors, such as health, food and other regulated products, the product must be registered with the destination country’s authority. Decide who will hold that registration. If it is the distributor, changing partners later may mean registering the product again.
Financial health and reputation. Trade references, payment history, time in the market and company standing.
Integrity is not a detail
The Good Integrity Practices Guide for Brazilian Exporters, launched by Brazil’s Office of the Comptroller General (CGU) with ApexBrasil in February 2026, points to frequent risks with intermediaries abroad: hiring without prior due diligence, commissions out of proportion to the service, cash payments or payments made by third parties, and irregular bookkeeping. Before signing, run checks proportionate to the size of the deal: who the shareholders and beneficial owners are, whether there are links to public officials, and whether the partner accepts anti-corruption clauses.
What the contract should cover
An international distribution agreement should cover at least:
- territory, channels and exclusivity (and what happens if targets are not met);
- price, currency, payment terms and guarantees;
- the Incoterm® with both the rule and the place, for example “FCA Santos, Incoterms® 2020”. The Incoterm defines delivery, costs and transport risks, but does not settle ownership, payment, quality or disputes;
- use of the brand and sales materials;
- who holds the regulatory registrations;
- confidentiality, compliance and data protection;
- term, termination, return of inventory, governing law and jurisdiction or arbitration.
The final text should be reviewed by a lawyer experienced in international contracts.
In short
The best distributor is not the biggest one, but the one with real coverage in the right channel, capacity to serve, clearly defined registrations and sound practices, all set out in a balanced contract.