When a buyer in Hamburg or Sydney expresses interest in carrying your product line, the temptation is to move quickly. Speed matters in export, but signing a distributor agreement before your internal team has verified territory scope, exclusivity terms, and performance minimums can create problems that take years to unwind.
Start with territory definition. A clause that reads "exclusive rights in Europe" sounds clear until a second distributor in Poland claims the same arrangement. Map the exact countries, and specify whether online sales into adjacent markets are permitted.
Performance and inventory obligations
Many Taiwan suppliers accept vague language about "reasonable commercial efforts." Replace this with measurable targets: minimum annual purchase volumes, reporting frequency, and consequences for sustained underperformance. Without these, you may find your brand listed on a foreign website with no local stock and no recourse.
Also review who holds responsibility for product registration, recall communication, and warranty handling. In several markets, the local distributor is legally visible to consumers even when manufacturing occurred in Taichung.
Exit provisions matter early
Termination clauses deserve attention at the start, not when the relationship sours. Define notice periods, treatment of remaining inventory, and whether the distributor may continue selling under your trademark during a wind-down period. Taiwan companies sometimes discover that local law gives distributors stronger protections than anticipated.
Before you sign, have your operations lead confirm that production capacity, labeling, and certification timelines align with the distributor's launch schedule. A contract signed in March means little if your CE documentation will not be ready until September.