Direct answer
Once counterparty checks are complete, a distributor is evaluated on four things: whether the brand confirms their authorisation, how stock is allocated when supply is short, what the goods actually cost delivered, and whether your intended sales channel is permitted under their own agreement. The last one is the most commonly skipped and the most expensive to discover late.
Key takeaways
- Authorisation is confirmed by the brand, not by the distributor claiming it.
- Ask what happened during the last shortage; the answer places you in the allocation queue.
- Channel permission is separate from willingness to sell, and the distributor may not volunteer the difference.
- Compare distributors on landed cost, because trade terms differ more than unit prices do.
- A distributor with no brand relationship to lose has no reason to prioritise your order.
Evaluating a distributor starts after the counterparty checks pass, not instead of them. Legal registration, bank account name and trading history apply here exactly as they do to any supplier — that sequence is in how to verify a wholesale supplier.
What follows is what is specific to distribution, where the thing you are really buying is access rather than goods.
1. Will the brand confirm them?
This is the only question that cannot be answered by the distributor. Brands maintain their networks and will normally confirm who covers a territory.
One email settles it, and nothing else settles it as reliably — not a certificate, not a letterhead, not a long relationship claimed in a sales call. If the brand does not recognise them, you are buying parallel-imported stock, whatever the invoice says. The consequences of that are set out in wholesale distributors.
2. How is stock allocated when supply is short?
Shortages are when distribution relationships are actually tested, and every established distributor has been through one.
Ask directly: what happened during the last shortage, and how were customers prioritised?
The answer tells you three things — whether they have been operating long enough to have been through one, how they rank accounts, and roughly where a new account of your size would sit. Vagueness here is itself an answer.
This matters more than price. A slightly cheaper distributor who cannot supply you in the quarter that a product sells is more expensive than an accurate one.
3. What is the real delivered cost?
Distributors quote on different trade terms, and unit prices are not comparable across them. A lower ex-works price frequently lands higher than a higher duty-paid price once freight, clearance and inland delivery are added.
Convert every quote to landed cost before ranking anything: how to calculate landed cost. Fix the trade term first — EXW vs FOB vs CIF.
Also establish who is importer of record on cross-border supply, because compliance obligations sit there and do not move by agreement.
4. Is your sales channel permitted?
The question sellers skip, and the one that costs most when skipped.
Willingness to sell to you and permission for you to list are different things. A distributor may happily take your order while the brand’s agreement forbids the marketplace you intend to sell on. When a complaint lands, the exposure is yours.
Ask explicitly, in writing, before the first order:
- Is marketplace resale permitted for these goods?
- Is there a minimum advertised price policy, and what is it?
- Are there territory restrictions on where I may sell?
- Are there listing content or imagery requirements?
A distributor who answers all four in writing is telling you they have a real agreement to answer from.
Secondary questions worth asking
- What are the volume break points? Not to negotiate now, but to know where the next economics sit.
- What is the returns and defect policy? Wholesale terms rarely mirror the consumer protections you must offer your own customers, and the gap is a cost you carry.
- How long has the brand relationship existed? Recent appointments are more fragile.
- Who else do they supply in my territory? Not always answerable, but the reaction is informative.
A note on second sources
Where the distribution structure permits it, a second supplier for the same product is worth the administrative overhead. It protects you during allocation, gives you a genuine price reference rather than a claimed one, and removes the leverage a sole source otherwise holds.
Under exclusive distribution this is not available, and knowing which structure applies before you invest in the relationship saves considerable time.
Where to go next
For finding candidates in the first place, see how to find wholesale distributors. For how distribution compares with buying from a manufacturer or wholesaler, see manufacturer vs wholesaler vs distributor.
Frequently asked questions
How do I confirm a distributor is really authorised?
Ask the manufacturer directly. Brands maintain distributor networks and will normally confirm who covers a territory. It is a single email and it settles a question no document from the distributor can settle as reliably.
What if a distributor will sell to me but the brand forbids my marketplace?
Then the sale is possible and the listing is not. Willingness to sell and channel permission are different things, and the risk of a brand complaint sits with you rather than with the distributor. Ask about channel permission explicitly and in writing.
Should I use more than one distributor for the same product?
Where the structure allows it, yes. Under exclusive distribution there is only one territory holder, but in selective or open structures a second source protects you during allocation and gives you a real price reference.
Sources
- Business guidance — U.S. Federal Trade Commission
- Basics of importing and exporting — U.S. Customs and Border Protection
