A: Apparently you have indeed been lucky in not having to deal with this type of modified "slotting fee" up until now. Our international business experts say that such fee demands are fairly common for international distributors. "It may not be too unusual for a supplier to request an advance payment from the distributor, so as to ensure that the distributor can achieve a minimum sales target for the coming year," says Priscilla Choy, with the Hong Kong law firm of F. Zimmern & Co. "However, if the supplier is unknown, and the product is a completely unproven product, you may have to reconsider whether to agree to such proposal."
SAMPLE DOCUMENTS. As to negotiating such an agreement, there aren't any hard and fast rules. "It is a commercial negotiation, depending on who has the most leverage," notes Yvette Fung of Synergis Holdings, a Hong Kong-based management firm. Choy agrees: "At the end of the day, as you may well appreciate, it's all a matter of bargaining power between the parties concerned."
There is a California-based business research outfit, Consus Group, that specializes in providing intelligence about contracts, deals, industries and companies. They have several international distributorship agreements as well as related contract agreements on their Web site that are available to purchase and download for a small fee. It would not be a bad idea for you to look at some of them and get an idea for how such deals are typically structured. Good luck!
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