Online reseller agreements are a way of preventing unauthorized sellers from selling your products on marketplaces like Amazon, eBay, and Walmart. These agreements are between the original manufacturers of a product and third-party sellers.
It’s vital that you have one of these in place, and here are basic 7 tips to help you write the perfect online reseller agreement policy:
1. Clearly Specify Which Products Are Included in The Agreement
It’s essential that you write which products the resellers are allowed to sell on as part of this agreement. This is particularly important for manufacturers with multiple product lines. Be specific so no confusion can take place.
2. Outline the Sales Territory
Following this, you must consider the territory as well. This means where the 3P sellers can advertise and sell your goods. Some manufacturers create online reseller agreement policies that allow their products to be sold in one specific territory, or all over the world.
3. Specify the Duration of the Agreement
An online reseller agreement policy should only be in place for a specific duration of time. A realistic example of this is to have a policy in place for a year. If things seem to go well, and your business is profiting from this agreement, then include options to extend/renew the contract every twelve months.
4. Set Pricing Policies
A huge part of this agreement should revolve around the pricing strategies put in place. As the manufacturer, you can enact a MAPP (Minimum Advertised Pricing Policies) to stop the third-party seller from advertising your products at too low a price. You should also consider including an MSRP (Manufacturer’s Suggested Retail Price) which tells the third-party sellers what you’d ideally like your products to be sold for.
5. Consider Orders & Payment
Of course, when you enter this agreement with a third-party seller, they need to get their hands on your products to sell them on. This means you should set some ground rules when it comes to how they order your goods. This could include information on how often the orders will go out, and how many units they can order in one go. Also, think about how much they pay you for your goods as well, and ensure the payment is in your desired currency.
6. Include Sales Targets
Ideally, when you agree to let another business sell your products, you want to ensure that they do a reasonably good job. This helps increase your brand exposure and establish your products in your market. Therefore, it’s a smart idea to include specific sales targets in your online reseller agreement too. This lets you see how well each third-party seller is doing – if you enter negotiations with multiple sellers. Plus, you can include terms in the policy that let you terminate the agreement if targets aren’t met.
7. Termination Terms
Speaking of termination, you need to have a clause in your agreement that gives you the power to end this contract in certain circumstances. For example, if the seller breaks some of the terms of the agreement, then you can legally end it at a moment’s notice. This stops companies from taking advantage of you.
Hopefully, these tips will put on in the right place to create an online resellers agreement policy that works for you. Manufacturers can expand their business and make a lot of money by entering contracts with third-party sellers, but you must have agreements in place to prevent unauthorized selling in online marketplaces!