Exclusive & Non-Exclusive Distributor

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asked on Dec 2, 2004 at 02:12
I need some help from this boardroom and hopefully someone here could assist me. My company a Sdn Bhd company with myself and one of my friend are the 2 director and share holder of the company. Recently we are managed to secure an exclusive Distributorship from one USA 's facial cream producing company in which the Distributor Agreement is mentioning we are the EXCLUSIVE DISTRIBUTOR in Malaysia.

My question is :
1) If someone or any company from Malaysia also getting the same EXCLUSIVE DISTRIBUTORSH from the USA's company. What can I do to protect my company interests ? Can we sue the local company ? or Can we sue the USA's company ? If yes, under what law ?
2) If someone or any company from Malaysia import the said products from USA without ours ( we and the USA's company ) consent ( someone can purchase the products from USA ex-factory and export it from USA to Malaysia ), can we sue the local company ? If yes, under what law ?
3) What necessary action or steps should we follow so as to protect our interests ?
4) What is the different between DISTRIBUTOR and AGENT in terms of LAW ?

Once again hoping somebody here could really assist and guide me for the above. Any help would be much appreciated.
Thanking in advance.
Best Regards,
Ray Lei
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5 Answers

answered on Dec 2, 2004 at 12:35
Many Business people are confused, mislead and misguided by the Modern Marketing Terminology, Trade Jargon and ABUSED WORDS like:

Proprietary or Exclusive Distributor, Wholesaler, Dealer and Agent.

Before we discuss further about your problems, firstly we need to understand the meaning of those terminology used.

Exclusive or Proprietary MERELY means only one who, that, where no other to be found.

Distributor: A firm that handles most key aspects of selling products for a Manufacturer, including warehousing, direct sales, shipping, billing, legal transfer of goods, and promotional activities.

Wholesaler: An intermediary that actually takes ownership of goods, buying and reselling them for a profit, sometimes directly to consumers and other times to retailers, who in turn sell them to consumers.

Agent: An agent acts on behalf of the product or service provider to negotiate purchase, sales, or both for a client, receiving a preset fee when the sale is complete, but rarely take possesion of goods and never take official title to goods. A good example is: The Real Estate Agent.

Dealer is a Retailer like most Cash & Carry Sundry shops.

1. Although your company is given the so-called Exclusive Distributorship, in PRACTICE and REAL MARKET ENVIRONMENT there is no guarantee of Exclusivity in law.

I presume the word "Wholesaler" for your company should be more appropriate and more relevantly entrusted.

You can't sue the local co. Not even the USA Manufacturer. All you can do is to BEAT them using your Marketing Strategies to make them realise your company's strength until they totally give up the Market Challenge with you.

2. Answer same as above mentioned. Free Enterprise.

3. Same as mentioned using Marketing Strategies to make it very difficult for them to move ahead and they will kill themselves.

4. As defination given. The word "Exclusive" also does not help in anywhere to gain advantage and whatsoever. It is just an ABUSED Word in this Cunning Business Environment.

Should someone tells you that you can sue any party, then he/she is just a dreamer.

Should you trust him or her, you may go ahead and sue the other party and wait for the RESULTS.....

Good Luck.
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answered on Dec 2, 2004 at 18:31
Hi Vince,
It's been my great pleasure to have your response to my queries above and I would really want to say Thank You Su Much to your advise and information given. It is really informative and helpful. Thanks.

It means in actual reality I have no way to protect my interests by interpreting law against any party, the only way is like what you mentioned as to capture the market by our STRENGTH base on marketing and sales tactics that we have.

Once again, thanks for the assistance and your kind valuable time of reply my query.

Thanks & Best Regards,
Ray Lei
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answered on Dec 3, 2004 at 03:03

I hope those definations have been helpful and useful to all Business Sectors in Malaysia.
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answered on Dec 3, 2004 at 20:21
It absolutely helpful and useful.
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answered on Nov 12, 2015 at 16:04
Hi Sir,

My company is facing the same problem. Can somebody help me to confirm the above answered in year 2004 still valid?

Appreciate your reply.

Thank you
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