50+ SAMPLE Wholesale Agreement

What Is a Wholesale Agreement?

A wholesale agreement is a legally binding document that defines the terms and conditions, rights, and responsibilities of the involved parties. The document details instances of one party providing and supplying wholesale goods to another organization. If a company plans to sell products on a wholesale basis, creating a wholesale agreement is the best bet. Having a wholesale agreement in place guarantees that both parties are in agreement with the terms and provisions in the document. It must also minimize the chances of conflicts and misunderstandings and protect the business on the occasion that something goes wrong. There are two different types of wholesale agreements present in the business world. An exclusive wholesale agreement happens when a supplier and buyer agree that they cannot negotiate and engage in other wholesalers or distributors within an area. Meanwhile, the non-exclusive wholesale agreement allows a buyer to buy from other wholesalers, and sellers can accommodate other consumers. Each document is essential to forming harmonious relationships between wholesalers and buyers by ensuring that both parties understand and uphold their obligations.

According to the National Association of Wholesaler-Distributors regarding the state of the wholesale distribution industry, the total wholesale distribution in 2020 has an estimated revenue of over 5.824 trillion US dollars worth of goods over the year. It shows a decline of 4.3 percent from the previous year that has a value of 6.088 trillion US dollars.

Types of Wholesaler

There are various types of wholesaling methods and wholesale businesses. While some of them focus on distribution, others are more on the lines of profitability. These wholesalers fall into three main categories with their subcategories. The section below details different types of wholesale and wholesalers.

Merchant wholesaler: This type of wholesaler is the most common of wholesalers that purchase a variety of profitable products from different manufacturers, storing them and selling them to different retailers. For merchant wholesalers, there are full-service wholesalers and limited-service wholesalers. Full-service wholesalers render a full set of services to their clients. They carry a significant number of stocks, utilize the salesforce, offer credit, fulfill deliveries to consumers, and provide the necessary management assistance. Full-service wholesalers can be wholesale merchants or industrial distributors. Wholesale merchants sell to retailers with different types of services. Meanwhile, industrial distributors sell to producers and are in charge of inventory management, credit, and deliveries. Limited-service wholesalers offer fewer services than its counterpart. These include cash-and-carry, truck, and mail-order wholesalers, drop shippers, rack jobbers, and producer cooperatives. Cash-and-carry wholesalers sell products to small businesses for revenue, consisting of fast-moving goods without making deliveries. Truck wholesalers sell and deliver a limited number of goods simultaneously. Drop shippers do not handle products and focus on receiving orders from buyers, then find a producer to ship the goods directly to the customer. Rack jobbers are responsible for delivering and setting up racks in stores, mostly consisting of toys, paperback, health and beauty items, among others. Producer cooperatives specialize in the wholesale of farm products and gather farm produce to sell in local markets. Lastly, mail-order wholesalers are in-charge of delivering catalogs to consumers, including retailers, markets, and other institutions, handling smaller items like cosmetics or accessories.Brokers and agents: A broker assists a seller and a buyer in negotiations. Brokers gain commissions from the selling price that the parties agreed upon in their deal. There are various types of brokers, including insurance, security, and real estate brokers. On the other hand, agents represent buyers or sellers permanently. There are manufacturing agents, selling agents, purchasing agents, and commission merchants. Manufacturing agents work under a formal agent agreement that covers product price, territory, handling procedures, delivery, commission rates, and product warranties. These agents handle products such as clothes, furniture, and electronics. Selling agents work with producer companies under an agreement to sell entire production lines. They work similarly to a sales department with control over product prices, terms, and conditions, handling textiles, machinery, and chemicals. Purchasing agents make purchases in place of buyers, including inspecting and shipping items to the buyers. These agents have sufficient knowledge of the industry they belong to and supply consumers with essential information. Lastly, commission merchants take possession of goods and negotiate the sales for a short period.Sale branches and offices: These institutions also offer wholesale products, and the wholesale process is between sellers and buyers without utilizing independent wholesalers. Incorporating sales branches and offices helps with inventory logs, selling, and promotion of goods.

Components of a Wholesale Agreement

There are several things to consider when writing a wholesale agreement. The effectiveness of the document relies on the contents and guarantees that a company indicates all the right statements for it to be fully functional. Below are the essential components that must be present in a wholesale agreement with their corresponding descriptions.

Orders and deliveries: The wholesale agreement must have a clear outline of the process of ordering goods. The acquisition of these orders can be through different channels, including phone calls, email letters, or through an order purchase form from the wholesaler. More importantly, the orders must state the types of goods to be purchased, the volume of goods, purchase price, and the delivery date. Minimum order quantity and minimum order value: The minimum order quantity (MOQ) and minimum order value (MOV) are essential elements of a wholesale agreement. The MOQ indicates the minimum number of orders that a buyer can order, while the MOV mentions the minimum price required to make orders. Indicating the two attract consumers to buy in bulks and enter into a more exclusive or extended agreement with a supplier. As a result of setting the MOQ or MOV, the buyer acquires cheaper pricing for the placed orders.Exclusivity clause: The wholesale agreement needs to indicate an exclusivity clause, whether the wholesaler intends to give the buyer exclusive rights or not. If a wholesaler and buyer possess no exclusive arrangement, the agreement must inherently indicate it to avoid any legal implications. If there is exclusivity, the document must include a clear outline of the terms, enforcement, and termination. Term and termination: A wholesale agreement is a long-term relationship between a wholesaler and a buyer. If both parties plan to invest resources into the arrangement, it must indicate the terms and conditions that guarantee the parties stay committed. There must be a clear understanding of the length of the contract to prevent a buyer from terminating the contract too early. Pricing: The wholesale agreement must demonstrate the process of pricing goods, including its calculations and how the wholesaler plans to communicate the price to consumers. In terms of wholesale agreements, both parties agree to a price list. The price list sets the price for the goods for the duration of the agreement. If prices are locked in, consider the length of the arrangement. If there are situations wherein the goods cost more over time due to inflation and other factors, the buyer must know any changes to the listing through an annual pricing review. Payment terms: Finally, the wholesale agreement must indicate payment terms to guarantee that the wholesaler gets their revenue. If the wholesaler is receiving initial payment and the buyer fails to pay, the wholesaler has the right not to ship the goods until the delivery of fees. Late payments can result in cash flow problems for the wholesaler that can cause complications in daily activities and operations. There must be an arrangement if the buyer pays in full, installments, or post-delivery. However, if a wholesaler allows for a longer period for payment, there must be a set duration of when the buyer must settle their fees. It must also indicate conditions about chargeable interests for delayed payments.

How To Write a Wholesale Agreement

Wholesaling is a great way to generate revenue for the business, whether it is through selling to retailers or selling products in bulk at a discounted price. Before sealing a wholesale deal with a buyer, consider various factors that can influence the manufacturing and production price of products you are offering. Below are the necessary steps in writing a wholesale agreement for your business.

  • 1. Research Your Target Market

    For a company to price its goods effectively and competitively, the first step is to conduct a market and industry competitor analysis to guarantee that the products you offer are within pricing parameters for the target demographic. It gives the company the advantage and position to sell wholesale products to retailers. It is also essential to collect all sales reports and figures, utilizing them during client negotiations and product presentations to guarantee the viability and value of products and demonstrate consumer demand and needs.

  • 2. Set a Price Structure for Wholesale Products

    When selling to retailers and resellers, they are already expecting that the prices are half the standard retail price. They do it so they can adjust markup prices for the products to make a profit. For the wholesaler to also gain revenue, the manufacturing and production expenses must be below the wholesale price you offer. It is also advisable to write overhead costs, staffing expenses, and all other investments for each item for a comprehensive price structure.

  • 3. Determine the Minimum Number of Orders

    Wholesale becomes profitable when companies sell in bulks. You must set a minimum amount of products that retailers and suppliers buy from the company before securing the deal. Identifying these figures before negotiations will keep you on the budget plan, financial projections, and business plans.

  • 4. Draw up the Contractual Arrangement

    It is advantageous to have a draft agreement already in place before proceeding with the wholesale deal. Ensure that the contract covers necessary costs, terms, and specifications. The key elements of the wholesale agreement include delivery terms, order amount, pricing, and payment terms. When writing the agreement, ensure that you have a contract attorney to help you to review and write up the document to guarantee that the agreement covers all the necessary items, including legal protections and provisions.


What is a retailer agreement?

A retailer agreement details the information, terms, and condition between the relationship of a wholesaler and retailer. It contains essential details of a transaction between the two parties.

What is a distributor contract?

A distribution contract or distribution agreement is an arrangement between a supplier that sells its products to another company that promotes and markets the products for purchase.

Do you need a wholesale agreement?

Engaging in a wholesale agreement is a long-term investment for the business. With the help of competent lawyers, a company can get the best deals out of transactions.

Creating the wholesale agreement gives the best deals for a wholesaler and buyer while providing a sense of security when it comes to payments. The wholesale agreement also limits the liability and protects the company from risks, especially with bulk orders from clients. It is better to have a proper document to list down all the terms and conditions of an arrangement. Download an example of a wholesale agreement you can use for your negotiations with buyers or suppliers. The article contains 50+ SAMPLE Wholesale Agreements in PDF.