A- Core Rights
1. Territorial Exclusivity
- Sole Sales Rights: Within the designated territory, the supplier cannot authorize other distributors or sell directly.
- Channel Control: Freedom to develop sub-distributors or direct sales teams to build a regional network (subject to agreement terms).
2. Price and Market Protection
- Pricing Autonomy: Ability to set retail prices based on supplier’s wholesale pricing (unless restricted by the agreement).
- Cross-Border Sales Protection: Supplier assists in preventing unauthorized cross-regional sales to safeguard pricing and profit margins.
3. Priority Resource Support
- Supply Guarantee: Supplier prioritizes orders from the exclusive distributor to ensure inventory stability.
- Technical/Training Support: Free access to product training, clinical materials, and marketing tools.
4. Limited Intellectual Property Use
- Brand Authorization: Right to use the supplier’s brand/trademark for promotions (under guidelines).
- Access to Technical Documentation: Use patents, test reports, etc., for client education.
B- Commercial Advantages
1. Market Monopoly Benefits
- High Profit Margins: Ability to maintain premium pricing (no same-brand competition), yielding 1.5–2x industry-average profits.
- Long-Term Client Retention: Post-purchase consumables (e.g., CGM sensors) ensure recurring revenue.
2. Optimized Marketing Costs
- Shared Market Education Costs: Supplier often covers partial costs for high-barrier training (e.g., clinician/patient education).
- Brand Premium Leverage: Utilize supplier’s brand reputation to reduce customer acquisition efforts.
3. Channel Control Power
- Distribution System Development: Ability to appoint sub-distributors and charge management fees.
- Bidding Advantage: Exclusive status prioritizes partnerships with hospitals in tenders.
4. Strategic Collaboration Depth
- New Product Priority: First access to next-generation products.
- Policy Negotiation Privileges: Flexibility to renegotiate targets/payment terms (e.g., during market volatility).
C- Unique Advantages in Medical Devices
1. Regulatory Barrier Protection
- Registration Certificate Dependency: High re-registration costs deter suppliers from replacing distributors.
- Clinical Relationship Lock-in: Distributor-established hospital ties become irreplaceable assets.
2. Sustainable Profit Model
| Profit Segment | Description |
| Equipment Sales | One-time high margins (e.g., CGM readers) |
| Consumables Recurrence | Steady cash flow (e.g., sensors/test strips). |
| Value-Added Services | Maintenance, data analytics, etc. |
3. Policy-Driven Opportunities
- Exclusive distribution remains critical for innovative devices excluded from national volume-based procurement (NRDL).
- Jointly pursue reimbursement/price listing with suppliers.
D- Risk Mitigation Mechanisms
Exclusive agreements typically include safeguards:
1. Sales Target Flexibility:
- Renegotiate goals for force majeure (e.g., pandemics).
2. Deposit Deduction:
- Offset order costs (e.g., pay 80% upfront via deposit) to ease cash flow.
3. Termination Compensation:
- Claim market investment losses if supplier terminates without cause.
