A sole distributor is appointed by the supplier company for a particular territory. The sole distributor is the only distributor with whom the supplier deals with for that defined territory.
The supplier can not sell their products to other distributors for that same territory for which sole distributor is already appointed, but the supplier is at liberty to sell their products directly to customers on their own viz. through their own outlets.
Whereas in case of an exclusive distributor - the distributor is given with exclusive rights to sell the products of the supplier company for a particular territory as defined in the agreement between them. Here, the supplier is restricted to sell their products through any other distributors or agents or even on their own for that particular territory.
Generally, there is a "Distribution Agreement" executed between the Supplier and the Distributor for defining the scope and period of the agreement, mainly covering the terms and description on the type of goods or services, area of the territory or region, rights given to distributor, restrictions on supplier, duration of the agreement, etc.
Mostly, before the signing of the agreement, a letter of appointment is issued to the distributor, to inform the distributor about the approval from the supplier and giving a brief about the products and rights.
Example of such an appointment letter for a sole distributor is given hereunder. Same format can be used for exclusive distributor's appointment with minor modifications on agreed terms.
