Many companies have started sales in the UK through distributors, and there comes a time when they wish to move on, either because the distributor is not doing a good job, or more often because the focus of the distributor’s business has changed. However, when appointing a distributor please be cautious. Take out references and make financial checks. Also really question the potential distributor on how they propose to market your products in the UK. Consider carefully any potential distributor who claims to be able to cover the whole of the UK or British market, because such organisations are very rare. Set clear targets for sales and pricing, and have a clear exit route if they are not achieved. Agree in advance who is going to pay for the marketing costs, and how much they will be.
Always have a good written agreement with any distributor and consult a lawyer in the early stages. You should also consider forming a Limited company using your own company name in order to protect it for the future, and to prevent your distributor from taking it. You may think that your Trade Mark registration will protect you from this, but it will not, as a number of our clients have found out the expensive way. It is because of these kinds of issues with distributors that most foreign owned business operate in the UK through their own subsidiary.
