In the supply business, is it a violation of a manufacturer/distributor agreement?

Question

...to order materials for another location which does not have an agreement with the manufacturer? I used to work for a pipe fittings supply business and was required to order material for our other branches of the company because the manufacturer would not sell to those locations. We would order in material and ship it directly out again to those branches requesting the materials for customers who required this product line in accordance with city and county specs. Isn't this usually a violation of a manufacturer/distributor agreement?

The manufacturer already has distributors in these other locations. It is usually a matter of exclusivity in some of these other locations. The other distributor in those locations may complain, you see, as they are often promised exclusivity or exclusivity amongs a few distributors. It is a kind of oligopoly often.

Agreed. however, the pricing is different per market. Many businesses will order from a cheaper market and have it transported to the more expensive market, making that business more competitive. That pisses off the locals who pay more because it makes it difficult for them to compete.

Answer 1

It is according to the contract. If the contract clearly defined, you would have problems. However, this can be resolved by proper negotiation before shipment release.

If no restriction in contract, you are free to use your own suppliers.

Business is business which is governed by revenue.

Answer 2

Once you 'own' the material, it is monopolistic violation for any supplier to dictate your disposition of that material as long as it is within all existing local, county, state, national and inter-country trade laws.