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A Warning to U.S. Scrapbook Vendors
Investigate before signing an exclusive
distributorship with an overseas company.
By Margaret Benson (November 1, 2004)
(Note: Margaret owns Artbase, a retail store in Hornchurch,
Essex. She writes about the practice of U.S. manufacturers
unwittingly naming an overseas company as the sole distributor for a
Here are some of our thoughts on the exclusive distribution
agreements that several scrapbooking retailers over here are
We are hearing rumblings from established UK-based scrapbooking
retailers expressing concern about the appointment of distributors
and, in particular, exclusive distribution agreements, which are
affecting their ability to order direct from U.S. manufacturers with
whom they often had existing accounts. Some of these agreements are
being made with retailer competitors or with companies with
un-established credentials, and it is these agreements that are
causing the most concern. They feel that U.S. companies, when
considering appointing UK distributors, should consider the
1. Remember existing retail customers in the UK have to be
treated fairly; please consult with them before reaching agreements.
2. Existing UK retailers should still be able to continue trading
direct at the same terms as before, bearing in mind that it is these
customers that have established the market in the UK in the first
3. Any agreement with UK distributors can be a sole
distributorship but NOT exclusive, thereby keeping trading with
existing UK retailers.
4. If a UK appointed distributor does a good job and can offer
goods at an equivalent (or better) landed cost than the UK retailer
already achieves, then orders will naturally drift their way.
5. It is important that U.S. suppliers protect themselves when
dealing with any customer. The proposed UK company must, therefore,
be a reputable, financially sound, experienced distributor who,
preferably, has a proven and established track record of other
successful distribution agreements.
6. Many UK retailers prefer to deal with reputable distributors
who do not sell direct to consumers. This means that appointing a
retailer as distributor is bound to limit the number of other
retailers who would deal with them. Furthermore, it is possible that
UK retailers would not have the necessary experience, financial
backing, or the warehouse space to grow successfully as a
7. Any increase in price to UK retailers as a result of
appointing UK distributors is very unwelcome. Many UK consumers buy
direct from the US online and the landed cost to them is often well
below the existing UK retailer selling price. Often the reason for
this is that many sales seem to bypass import taxes and duties such
as 17.5% VAT (the UK equivalent of sales tax); added to this, some
U.S.-based stores shipping the goods illegally mark down the value
of the goods or indicate ‘gift’ on the export documentation.
To summarize, the U.S. suppliers should be careful to consider
all the points mentioned above and think twice about greeting anyone
with open arms who says they can act as a UK distributor. Your
existing customers are precious; do not jeopardize any good
(Note: Artbase has a website at www.artbasehornchurch.com.
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