Exclusive distributors are increasingly affected by webshops that offer lower prices in their exclusive area. Just think of the online sales platforms, such as Marktplaats, Ebay, Bol, Amazon, Alibaba and AliExpress. It is often difficult or impossible to take action against this, especially once the products have entered the EU market with the consent of the trademark owner. It is also often difficult to find out where the products come from if the batch code has been removed from the packaging. A selective distribution system can offer a solution to this.
So what is a selective distribution system?
1. selective distributors are appointed based on predefined selection criteria. The requirements must be the same for all distributors. For example, requirements regarding the quality of the premises, the location of the store and the quality of the staff.
Distributors belonging to the selective distribution system may only sell to the consumer (end user) or to other distributors – also admitted to the selective distribution system. Thus, a selective distributor may not sell to distributors not belonging to the selective distribution system (unauthorized resellers). Thus, a closed system of resellers is created. Quality is then guaranteed.
On the basis of a selective distribution system internet sales can be limited. A total ban on internet sales is prohibited, but it is permitted to allow internet sales by resellers only if the entrepreneur in question also owns an actual brick-and-mortar store. Furthermore it is allowed to insist on the same price for offline and online sales. A ban on selling via large third-party internet platforms is also permitted in principle. This can be used to counteract pricedumping on the internet by mere webshops.
All in all, a selective distribution system therefore offers significant advantages over an exclusive distribution system. I will be happy to assist you in setting up a selective distribution system.
