ThreatLevel: Midnight said:
Have been approached with an opportunity by a product manufacturer to become the exclusive regional distributor for a new product they are bringing to the market we work in. Don't have a ton of specifics yet but the top down: we would function as the distributor and also (potentially) the installer.
Curious if anyone here has prior experience with a similar situation or insight that may prove useful.
Thanks crew
I worked for a synthetic shingle manufacturer who did an exclusive distribution agreement through ABC. Part of the exclusivity agreement included an initial purchase of a LOT of inventory by ABC. I bet 95% of the inventory just sat and sat and sat on their yard until ultimately, we found issues in mechanical properties of the 1st gen shingle and had to do a product recall. It was real hard to get ABC to even consider taking on inventory of gen2.
They dropped the exclusivity agreement as far as I know. I haven't been at that company in a while.
Since you're on the other side of where I was, I'd be cautious about how much inventory y'all take on your balance sheet initially if the product turns out to be a dud. Depending on the underlying financial strength of the manufacturer...it may be hard to get your money back if the product flops.
