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distribution agreement

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Case Study #3: Distribution Agreement

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Raynonplus is a small, family-owned eyewear business located in Ottawa, Ontario, Canada. Started by Pierre Dupuis in 1952 under the name of Visionplus, the company has been exclusively owned and operated by the Dupuis family for over 50 years. Currently, the business—a sole proprietorship—is owned and managed by Gerald Dupuis, grandson of the original entrepreneur. The Dupuis’ changed the business name in 1957 to capitalize on a trend in polarized sunglasses that swept the neighbouring French speaking province of Quebec.

Traditionally, Raynonplus sold a wide range of generic and brand name eyewear including prescription lenses, contact lenses, frames and sunglasses; but …show more content…

What are some of the benefits that would have compelled Raynonplus to choose a distributorship agreement over an international sales agent agreement?

.. Sales agents tend to be used for more highly specialized goods that require implementation, installation or aftermarket services.
.. A distributorship agreement, or the terms governing the business relationship between the principal and the foreign distributor, often ensure an extensive portion of the financial costs are absorbed by the distributor, whereas there is no such risk to a sales agent. For example, distributors often purchase the merchandise outright and are compensated through price mark-ups and predetermined credit and payment policies as opposed to sales agents who do not purchase the merchandise and work on commission based compensation.

2. List another possible form of international business endeavor Raynonplus could have considered as a market strategy in France. Given the details of this particular business case, why would this option not have been right for Gerald?
.. Additional possibilities for international business include:
.. FDI
.. Joint venture
.. Partnership

.. For the most part these options require a sharing of both financial and operational responsibilities.
For example, in many countries, national FDI legislation requires 51 percent national ownership.
These are therefore not viable options for Gerald who wishes to

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