The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
Members have learned through experience that distribution contracts need specific commercial and performance clauses to work effectively. Here's what the community recommends including: **Core commercial terms:** - **Volume by channel** — clarify expected sales volume across different retail/hospitality channels - **KPIs** — define measurable key performance indicators for the distributor - **Support matrix** — specify cash support (per bottle) for each volume bracket to incentivise performance - **Payment terms** — members recommend 45 days from invoice as standard **Contract duration and exit clauses:** - **3-year deal structure** with early termination rights if targets are missed - **Acquisition clause** — if the distributor is acquired, they either let you see out the contract or pay 6–9 months of gross margin as compensation **Performance protections:** - **Minimum sales obligations** — one member successfully negotiated a mid-term renegotiation including minimum performance/sales targets. When the distributor fell ~5,500 9L cases behind forecast, they exercised this clause to secure overdue POs. This is hard to get in initially but valuable if you can. **Contract complexity varies:** Members report ranges from very short informal agreements (used for some export markets with no formal contract) through mid-length documents, to 50-page contracts that took 6 months to negotiate. The detail needed depends on market importance and distributor track record. **Warning:** Members have experienced significant disputes with underperforming distributors. Building in performance clauses and clear KPIs from the start—rather than trying to renegotiate mid-term—helps avoid costly legal conflict. One member described a "very heated legal dialogue" with a key-market distributor; proactive contract design can prevent this.