SDA - Selective Distribution Agreement

 An SDA is commonly used by premium, luxury, or regulated brands that wish to maintain control over how and where their products are sold.
On Amazon, SDA frameworks are particularly relevant for brands that want to restrict unauthorised sellers or enforce brand presentation standards within the marketplace.

Purpose of an SDA:

• To protect brand image by ensuring that only qualified resellers represent the brand.
• To maintain consistent pricing, quality, and customer service standards.
• To prevent product diversion and unauthorised marketplace listings.

Key Elements of a Selective Distribution Agreement:

1. Eligibility Criteria:
   • Resellers must meet specific requirements (e.g., physical store standards, online presentation quality, technical expertise, customer support).
2. Territorial Restrictions:
   • Defines where authorised resellers may operate (by country or region).
3. Sales Conditions:
   • Outlines rules for product presentation, packaging integrity, and use of trademarks.
4. Compliance and Auditing:
   • The manufacturer retains the right to audit resellers or revoke authorisation if standards are breached.
5. E-commerce Clauses:
   • Specifies whether authorised resellers can sell on third-party marketplaces like Amazon, and under what conditions.

Example in Amazon Context:
A luxury skincare brand signs an SDA allowing only approved partners with certified e-commerce websites and premium packaging compliance to sell online.
Under the agreement, unauthorised sellers listing its ASINs on Amazon may be removed under intellectual property (IP) or Brand Registry enforcement.

Benefits for Brands:

• Control: Maintains brand reputation and customer experience.
• Protection: Reduces grey-market activity and counterfeit risk.
• Consistency: Ensures standardised pricing and authorised listings.
• Regulatory alignment: Meets selective distribution laws under EU competition regulations.

Benefits for Amazon:

• Higher-quality catalogue: Reduces unauthorised or misleading product listings.
• Compliance: Aligns with EU and national laws regarding selective distribution.
• Customer trust: Ensures that listings represent authentic, well-presented products.

Challenges:

• Legal complexity: Must comply with EU competition law (Article 101 TFEU) and similar frameworks elsewhere.
• Marketplace enforcement: Hard to fully prevent unauthorised sellers from listing on Amazon.
• Transparency: Distributors must clearly communicate authorisation terms.

Why It Matters:
Selective Distribution Agreements are increasingly important for brand protection and channel control in e-commerce.
They allow legitimate brands to maintain premium positioning while meeting Amazon’s SBSAS (Standards for Brands Selling in the Amazon Store) requirements for authenticity and compliance.

Example:
A luxury watch manufacturer authorises only resellers with trained staff and official boutiques.
Its SDA prohibits sales on third-party marketplaces unless explicitly approved, allowing the brand to request Amazon removal of unauthorised listings.

In short:
SDA (Selective Distribution Agreement) is a contractual system that restricts product resale to authorised distributors meeting specific quality and service standards - protecting brand reputation, ensuring compliance, and controlling how products appear on Amazon.