Dealer agreements: what to read before you sign
Most dealer agreements are boilerplate, and the few clauses that are not are the ones that decide whether the line is worth building on. Here is what to look for.
Most dealer agreements are boilerplate and you will sign them without much thought. That is usually fine. The problem is that the handful of clauses that are not boilerplate are precisely the ones that decide whether the line is worth building a store around, and they are rarely flagged. Here is what is worth slowing down for.
Territory and exclusivity
Find out how many other dealers sell this product into the same market, and whether the brand intends to add more. Non-exclusive is normal and not a problem by itself. What matters is whether the brand has any stated limit at all. A brand that will sign anyone with a pulse is telling you your margin is going to be competed away, whatever the agreement says about pricing.
MAP, and whether it has teeth
A MAP clause that says prices "should" be maintained is decoration. What you want is the enforcement mechanism: what actually happens to a dealer who advertises below the floor. Written warnings then termination is a real policy. Nothing specified is not. The clause is only as good as the consequence attached to it, which is why how MAP is enforced is worth more attention than whether a policy exists on paper.
Who owns the customer
Some agreements let the brand sell direct to a customer you introduced, including on warranty replacements and repeat orders. Others quietly restrict you from collecting customer email addresses at all. Both are workable if you know about them, and both are unpleasant surprises if you do not.
Minimums, and what happens if you miss them
Annual or quarterly purchase minimums are common. The question is the consequence: does missing one cost you the account, downgrade your pricing tier, or nothing at all? A minimum with no stated penalty is a target. A minimum tied to your dealer price is a real commitment, and you should be confident you can hit it before signing.
Where you are allowed to sell
Marketplace restrictions are increasingly common and increasingly strict. Many brands now prohibit listing on Amazon, eBay or Walmart outright, because those channels are where MAP discipline breaks down. If any part of your plan depends on a marketplace, confirm it is permitted in writing before you sign, not after.
Freight, returns, and damage
On heavy goods this is where the money actually is. Who pays outbound freight, who pays return freight, what the restocking fee is, and critically, who eats the cost when a product arrives damaged. Freight damage on a large item can wipe out the profit on several sales. Brands vary enormously here and the answer is almost never in the marketing material.
Termination
Look for the notice period and whether termination can be immediate and without cause. Thirty days without cause is common. If you are going to build significant traffic around a brand, understand that the account can end and plan the range so no single supplier leaving takes the store down with it.
How to use this
You do not need a lawyer for a standard dealer agreement, but you should read those seven things specifically and ask about anything left vague. A rep who answers clearly is usually a rep worth working with. One who deflects on freight and returns is telling you something.
Check the fit before you get this far. Confirm the price band and product types match your store by browsing suppliers by niche, and run the numbers with the margin calculator so you know what the line needs to earn before you negotiate the terms it will earn under.
This is general commercial guidance, not legal advice. For a large or unusual commitment, have a lawyer read it.