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Too little info. Depends on the product and situation. If someone wants rights to resell in a different or undeveloped market area, sounds good. Couple it with a non-compete clause and it sounds great.
Be aware that a company can be taken over by a major customer that can afford to pull strings. Never let sales to any one customer or reseller exceed 40% of total sales if you want to avoid this.
Harry - Thanks for the input. We make a product that is used in construction projects and for a very specific niche. We're being approached by businesses that sell products into the same niche. Could they bring us substantial revenue? Possibly - especially with a formal reseller program. Would they get sensitive material as a reseller? Definitely. Could they use it to compete against us? Possibly - especially the larger businesses.
Resale seems tricky. Depending on how it's done, it could really hurt or help a business. But you seem to confirm that allowing anyone to resell our product without conditions is naive.
Last edited by aaauger; 11-14-2008 at 11:12 AM..
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