An American machine builder signs a distribution agreement with a German firm. Three years later the relationship is not working, so they terminate it properly, with notice, for good commercial reasons, and receive a claim for a statutory payment they had never heard of.
The termination was clean. The problem started three years earlier, with a word. “Distributor” in American usage covers several European arrangements that carry different legal consequences for the manufacturer, and in some circumstances the label on the agreement does not decide which set of rules applies to the relationship underneath.
That single misunderstanding is worth more than everything else on this page, and it gets its own section further down. Finding distributors in Europe starts with getting the vocabulary right, because the vocabulary is what decides which rules apply. The wider entry decision, including conformity and when an EU entity actually becomes necessary, is in our guide to EU market entry for US companies.
Distributor, agent, or rep: the European words don’t map to the American ones
Four roles, and each one carries a different legal position.
Distributor (Vertragshändler). Buys your product, takes title, holds stock, carries credit risk, resells at a margin. Commercially they own the customer relationship. The German term literally means contract dealer, and there is no dedicated statute governing the relationship in the way there is for agents.
Commercial agent (Handelsvertreter). Sells in your name for commission, never takes title. Protected by statute across the entire EU under Council Directive 86/653/EEC, implemented in Germany at sections 84 to 92c of the Commercial Code (HGB). Those protections are mandatory and they are the reason this role needs careful handling.
Manufacturers’ rep. An American category with no exact European equivalent. The nearest thing is the Handelsvertreter, and a US company that ports its rep model across without changing the paperwork has created a commercial agency relationship with statutory consequences attached.
Importer. A defined role under EU product law, frequently filled by the same company as your distributor. The importer verifies that you carried out the conformity assessment, puts its own name and address on the product or packaging, and keeps your declaration of conformity for 10 years. Worth separating in your head because these obligations come from product legislation and survive whatever your contract says.
| Distributor (Vertragshändler) | Commercial agent (Handelsvertreter) | Importer | |
|---|---|---|---|
| Takes title to goods | Yes | No | Yes, when it buys |
| Who owns the customer | They do, commercially | You do | Not a commercial role |
| How they are paid | Resale margin | Commission on orders | Not applicable |
| Governed by dedicated EU statute | No dedicated regime | Yes, Directive 86/653/EEC | Yes, EU product legislation |
| Claim on termination | Possible by analogy in Germany, see the termination section | Statutory indemnity or compensation | Not applicable |
| Typical fit by deal size | Consumables and catalogue products | Capital equipment, technical sale | Any imported product |
The practical consequence, stated once and then demonstrated later on this page. Which word appears in your contract changes what you owe when the relationship ends, and the substance of how you run the relationship can matter more than the label you chose.
The mirror of this decision from the European side is covered in our guide to finding a US distributor, which walks the same choice for a company moving in the opposite direction.
What a good European distributor actually looks like
Settle one thing before the scorecards. The profile below and the qualification call after it are built for the Vertragshändler route, where the partner buys, stocks and services. If you took the commercial agent route from the previous article, those three jobs do not disappear. They move to you. You hold the stock or ship direct, you commission and train, and you carry the warranty.
So the agent gets scored on different things: the territory they genuinely cover, the customers they can open on your behalf, whether they can hold their own in a technical conversation with an engineer, how many principals they already carry and how much attention is left for you, and whether they will work a trade show stand with you. Where a gate below asks about stock or service technicians, read it on the agent route as a question about who is doing that job instead, and whether you have budgeted for it.
Teal = Non-negotiable
Two of those deserve elaboration.
Territory honesty is the item most often waved through. Most US companies grant far more geography than the partner can work, because the partner asks for it and refusing feels like starting the relationship badly. The refusal is the right move. Exclusive territory should be earned by performance in the first country and extended afterwards.
The German documentation question is the cheapest qualification signal available. It costs you nothing to notice whether it comes up.
Where European distributors actually are
Six sources, in order of how reliably they produce a partner worth signing for industrial and technical products.
1. Trade show exhibitor directories. In German-speaking Europe this is how channels get found. Most of the value sits in the exhibitor directory, which is published online weeks before anyone books a flight. Those lists name every firm in your category. Mining them is standard practice in German industrial sales and there are paid products that do it for you, so treat this as table stakes rather than an edge. Pull the list, filter for distribution and system-integration firms, book 20-minute meetings before you fly, and walk your competitors’ stands to see who is standing at them.
The shows that matter for machinery, robotics and welding. Hannover Messe runs annually, next on 5 to 8 April 2027. automatica in Munich is biennial, next on 22 to 25 June 2027. AMB Stuttgart is biennial in even-numbered years, so the 2026 edition has already closed and the next runs in September 2028. EMO is biennial but hosted in Hannover twice for every once in Milan, and the next edition is EMO Milano, 4 to 8 October 2027. SCHWEISSEN & SCHNEIDEN in Essen, for joining and cutting, returned to its four-year cycle with the 2025 edition and runs next from 17 to 21 September 2029. Check current dates before planning around any of them. And do not wait for the next edition, because the directories stay online between them. The 2026 AMB list and the 2025 Schweissen & Schneiden list are both readable today, which means a show three years out is still a usable database this week, arguably the most usable one, since nobody is working those names.
2. Industry association member lists. The VDMA, Germany’s mechanical and plant engineering association, organises around 3,500 member companies across 35 specialist associations and publishes a member list. The specialist association structure is the useful part, because it tells you which firms work in your specific category rather than in machinery generally. Membership is a real filter.
For welding, the DVS (Deutscher Verband für Schweißen und verwandte Verfahren) is the technical association, and states roughly 17,000 members. DVS itself publishes no searchable member directory, so use it to understand the standards and certifications your buyers expect, and its regional branches as an enquiry route. Its media arm runs Home of Welding, a searchable company and product directory for the sector, and that is the one to mine for names.
3. The commercial agent networks. This is where a US company never thinks to look. The CDH, full name Centralvereinigung Deutscher Wirtschaftsverbände für Handelsvermittlung und Vertrieb, is the German association for commercial agents and sales intermediaries, and represents almost 40,000 sales and distribution companies by its own count. It runs a representation-matching service (Vertretungsvermittlung) connecting manufacturers with agents, and handelsvertreter.de is the associated platform, operated by CDH eService GmbH. Principals post a vacancy there and matching registered agents are notified, so it is a posting board rather than a directory you browse. For capital equipment sold on commission, this is a more direct route to the right person than any distributor directory.
4. The AHK chamber network. The German Chambers of Commerce Abroad run address research and partner search services at published, subsidised rates. Real, institutional, and covered in the cost section below.
5. Competitor teardown. Find who distributes competing or adjacent products and work backwards. Competitor “find a dealer” pages are the obvious entry. The less obvious one is the imprint page. Every EU member state implements Article 5 of the e-Commerce Directive (2000/31/EC), so a commercial website has to make the operating company name, its geographic address, contact details and trade register entry easily and permanently accessible. Germany goes further under section 5 DDG and requires the managing directors too. Germans call it the Impressum, and it means tracing a European distributor’s real corporate identity, registered office and company number takes about a minute.
Then take the two next steps Americans never take, because both are free and neither has a US equivalent this open. The Handelsregister, the German commercial register, has been free to search since August 2022 and gives you the registered office, the company number and the people authorised to sign. The Unternehmensregister and Bundesanzeiger carry filed annual accounts for German companies above the disclosure thresholds, also free since August 2022. So for a German GmbH you can read the filed accounts before you ever ask a question about financial stability. That is the carryable version of “run a credit check”, and it costs nothing.
6. Directories. Europages is a general business directory and eu-distributors.com is a matchmaking platform. Both are last on this list, and both are useful only to confirm that a company exists and get its details. They tell you who has listed themselves. Whether a listed firm can commission your machine is a question you answer on a call.
- 1-2 weeksDefine the territory and the profile Decide which countries are in scope for the first partner and write down the non-negotiables from the profile above. Searching without this produces a list nobody can act on.
- 2-4 weeksBuild the long list Association member lists, exhibitor directories, commercial agent networks and competitor dealer pages, in that order. Directories last. Record the source against every name so you can tell later which channel worked.
- 4-6 weeksFirst-pass filter on public information Cut on line card size, stated service capability and territory claims before you contact anyone. Most of a long list fails here, which is the point of having one.
- 5-9 weeksOutreach and first conversations Lead with what you make, which customers it is for, and what you are offering. Vague introductions get ignored. Check the outreach rules before you send anything: Germany has no B2B carve-out for unsolicited commercial email, and section 7 of the UWG is enforced by competitors through the courts, not only by a regulator. Phone and post are treated differently from email, and a named referral is treated differently again.
- 9-14 weeksQualification calls The structured conversation covered below. This is the stage that separates a search from a list, and the stage most often skipped.
- 14-18 weeksReferences, credit checks, site visit Call their existing principals rather than their customers. Read the filed accounts. Visit the premises and meet the service technicians before you negotiate.
How European partners get paid, and why US norms mislead
Agent commission and distributor margin work structurally the same way on both sides of the Atlantic. The anchors differ by country and product category, and a US company arriving with its domestic commission table will get a puzzled reception. Published benchmarks for European industrial channel compensation are thin, so treat any number you are quoted, including by a prospective partner, as a negotiating position. Nobody publishes a defensible market rate for this.
The percentage matters less than three structural points, each of which changes behaviour.
A commercial agent’s commission can continue to accrue on repeat orders from customers they introduced, and ending the agency does not automatically end that entitlement. This is a feature of the European agency regime, and it changes how you model the cost of an agent over a five-year horizon.
European distributors more often expect the principal to fund launch activity: a share of the trade show stand, demo equipment on site, training for their technicians. A US distributor is more likely to absorb some of that themselves. Budget for it or the partnership starts with a disagreement.
Payment terms run longer in several European markets than US norms, and asking for US terms reads as inexperience.
| Dimension | US channel norms | European channel norms | What it changes for you |
|---|---|---|---|
| Post-termination commission | Contract decides | Agent entitlement can survive termination by statute | Model agent cost over years, not per deal |
| Launch funding | Distributor often self-funds | Principal contribution more often expected | Put stand share, demos and training in the first budget |
| Payment terms | Shorter | Longer in several markets | Check terms per country before quoting |
| Published compensation benchmarks | Widely available | Thin and unreliable | Negotiate on scope and deliverables |
| Termination exposure | Governed by the contract | Governed by statute for agents, and by case law for some distributors | Get the agreement reviewed in-country before signing |
The termination trap: statutory compensation for commercial agents
This is the section that changes what you sign.
Under Council Directive 86/653/EEC, member states must ensure that a commercial agent is either indemnified or compensated for damage after the agency contract ends. Article 17(1) leaves the choice of system to each member state. Where the indemnity system applies, Article 17(2)(b) caps it: the indemnity may not exceed one year’s remuneration calculated from the agent’s average annual remuneration over the preceding five years, or over the actual period if the contract ran for less than five years. Article 17(5) gives the agent one year from termination to notify the principal that they intend to pursue the claim, after which the entitlement is lost.
Article 19 is the clause that surprises American companies. The parties may not derogate from Articles 17 and 18 to the detriment of the commercial agent before the agency contract expires. You cannot write the claim out of the contract at signature. Nor can you escape it by choosing US law. In Ingmar (C-381/98) the Court of Justice held that Articles 17 and 18 apply where the agent carries on business in a member state even though the principal is established in a non-member country and the contract stipulates that country’s law. The defendant in that case was a US company. The Court of Justice has treated the regime as mandatory, and has characterised the payment as indemnifying the agent for past services from which the principal keeps benefiting, rather than as a penalty for terminating.
In Germany the claim is the Ausgleichsanspruch under section 89b HGB. It arises where the principal continues to derive substantial benefit from customers the agent acquired and payment is equitable in view of the commission the agent loses. The cap is one year’s commission calculated on the average of the agent’s last five years of activity. Section 89b(3) excludes it in defined situations, including where the agent resigned without cause or the principal terminated for cause attributable to the agent. Section 89b(4) states that the claim cannot be excluded in advance, and it must be asserted within one year of termination.
Now the part that reaches distributors. German courts apply section 89b to a Vertragshändler by analogy, and the two conditions are specific. First, the distributor must be integrated into the supplier’s sales organisation to a degree that goes beyond an ordinary buy-and-resell relationship, performing tasks economically comparable to those of a commercial agent. Allocation of a defined sales territory is one of the circumstances courts weigh here. Second, the distributor must be obliged to transfer its customer base to the supplier in a way that lets the supplier use it immediately and without further effort once the contract ends.
Both conditions have to be met. That is also where the practical lever sits. Case law has declined the analogy where the supplier, although receiving customer data during the contract, is obliged to block that data on termination, refrain from using it further, and delete it on request. A customer-data clause drafted around that point does different work from one drafted without it.
So a US manufacturer can create this exposure without ever using the word “agent”, by running a distributor tightly, assigning a defined territory, and writing a customer-data handover into the agreement because it seemed prudent.
Contract clauses that create exposure you did not intend
- A blanket obligation on the distributor to hand over customer data at termination, with no restriction on how you may use it afterwards
- Tight integration into your sales organisation: your reporting formats, your CRM, your pricing control, your targets, framed as ordinary partner management
- A defined exclusive territory combined with detailed activity obligations, which together look like agency rather than resale
- Assuming a US governing-law clause resolves it, when the agent is operating inside the EU
- Treating the arrangement as a commercial agency in substance while calling it distribution in the paperwork
- Budgeting nothing for termination at signature, then discovering the number when you want to exit quickly
Three practical responses. Budget for the exposure at signature rather than at termination. Decide deliberately whether you want the customer-data obligation, because you may be buying a liability in exchange for it. And have the agreement reviewed by someone who practises in the country whose law governs it.
None of this is legal advice, and the position varies by member state. The Directive sets a floor that every EU country has implemented in its own way, so a German answer is not automatically a French or Italian one. What is reliable across the EU is that a commercial agent has a termination claim you cannot sign away in advance.
How to qualify, not collect
Anybody can produce 200 names. Europages does it for free, and eu-distributors.com does it as a business. The scarce thing is a judgement about whether a specific firm can commission, train and service your machine in front of a demanding customer.
That judgement comes out of a structured conversation with the owner.
Teal = Ask every time
Be honest with yourself about the arithmetic. A serious search starts from a long list in the low hundreds, produces perhaps 20 to 30 firms worth contacting, perhaps 10 worth a qualification call, and a shortlist of two or three you would actually sign. If a search hands you 50 qualified partners, it did not qualify them.
The output that matters is a scored shortlist with written reasons, because you will need the reasons again in six months when the first choice goes quiet and you have to decide whether to wait or move to the second.
Inmotion is building a DACH partner search service
The qualification work above is what we’re turning into a service for the DACH direction, after years of running the same search into the US for European manufacturers. It isn’t live yet and we’re not putting a date on it. If you want to hear when it is, leave your email below.
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What to put in the agreement
The termination exposure above is the term US companies miss. It is not the only one, and a European partner agreement that carries only a termination clause is thinner than the US equivalent most readers already know.
Five terms worth settling before signature.
Territory, named. List the countries. “Europe” in a territory clause is the single most expensive phrase in this process. Germany, Austria and Switzerland is a reasonable first grant.
Exclusivity earned, not given. Offer 12 months of exclusivity in the named territory conditional on defined performance, then extend or widen it. Exclusivity granted at signature with no conditions attached is the thing you will pay a lawyer to undo.
Leading indicators, written as obligations. Annual revenue minimums fail quietly, because you find out 11 months late. Write the early signals in instead and review them quarterly: technicians trained by a named date, number of customer conversations opened, quotations issued, demo days held. Those are the numbers that tell you at month 9 whether the partner is working, and they have to be in the agreement to be reviewable.
The customer-data clause, decided deliberately. Read the termination section above first. Requiring the distributor to hand over the customer base is exactly what can trigger the statutory analogy, and a block-and-delete commitment on termination is what defeats it. Decide which you want rather than inheriting a template.
Termination for cause, defined. Tie it to the leading indicators rather than to revenue, and agree the notice period explicitly, because national law supplies one if you do not.
How long it takes
One clock, and it is the same one the companion article uses. Every figure below counts from the week you start research, not from first contact.
- 1-4 monthsSearch and shortlist The sequence in the previous timeline, from defining the territory through qualification calls, reference calls with their existing principals, the filed accounts and a site visit.
- 5-7 monthsNegotiation, legal review and signature Territory, targets, customer-data clauses and the termination position, reviewed under the law that will govern the agreement. Plan for this to run longer than an equivalent US negotiation, because the review is substantive rather than a formality.
- 7-9 monthsOnboarding at their premises Training on site, time with the service technicians, first joint customer visits. Do the onboarding where the machine will be commissioned, with the people who will commission it.
- 12-18 monthsFirst meaningful revenue Set by your product's own sales cycle in the target country rather than by the partner's effort. Ask three firms in your category what their quote-to-order cycle looks like in that market and plan against their answer.
The gap between a signed agreement and real revenue is the single most misunderstood part of this process. A partner who has closed nothing by month 4 is behaving normally. A partner who has opened no customer conversations by month 9 is a problem. Knowing which of those you are looking at requires the leading indicators to be in the agreement: training completed, customer conversations opened, quotations issued.
What this costs
Start with the programmes your own taxes fund. The US Commercial Service runs partner finding out of its overseas posts, including the International Partner Search and the Gold Key Service, which identifies prescreened candidates, arranges meetings with potential agents and distributors and sends staff to attend them. Published user fees put the Gold Key standard package at $950 for a small company, or $800 to identify contacts and arrange meetings without attendance. Your first call is your local US Export Assistance Center. The Enterprise Europe Network also runs a free partnering database carrying cooperation profiles from more than 60 countries.
The German Chambers of Commerce Abroad publish their rates too, which makes them the price anchor for this entire market.
The German-British Chamber publishes the most complete card of the network, so its figures are the ones quoted here, and the AHK in your own country prices comparable services on the same model. It lists Address Research at £120.00 including up to 10 addresses (£102.00 for members), with additional addresses at £2.40 each (£2.04 for members), delivered within two to three working days of payment. A Partner Mailing is £4,800, paid £2,400 up front and £2,400 on completion, taking approximately two months with a research phase of four to six weeks. An Agent Search is £1,200 plus advertising costs, run over the course of a year. Subsidiaries databases are £1,200.00 (£1,020.00 for members). All prices include VAT and orders are prepaid. The Chamber states that it is supported by the Federal Ministry of Economic Affairs and Energy under a resolution of the German Parliament, which is why the rates sit where they do.
Now read the deliverable, not just the price. Address Research produces a filtered list of addresses. Partner Mailing runs a mailing campaign and reports what came back. Neither includes a technical judgement about whether a firm can commission your machine, neither includes the qualification call, and neither includes the follow-through when a good candidate goes silent for three weeks. That is an accurate description of the product. At £120 for ten addresses, nobody should expect otherwise.
Which tells you what to buy and what not to. Names are close to free, between the government programmes, the association lists and the exhibitor directories, so anyone selling you a longer list is selling the cheap half. The part worth paying for is the judgement: which of those ten addresses can actually commission and service a welding cell, and finding that out before you sign rather than after. Price any provider against that question.
- Address research, 10 addresses £120.00 incl. VAT, published chamber rate
- Subsidiaries database £1,200.00 incl. VAT, published chamber rate
- Partner mailing, approx. 2 months £4,800 incl. VAT, published chamber rate
- Commercial agent search over one year £1,200 plus advertising, published chamber rate
- Qualification calls and reference checks Not a published product anywhere. This is the work that decides the outcome.
- Credit checks on shortlisted firms Often free in Germany via the Unternehmensregister filed accounts. Paid reports exist for firms below the disclosure thresholds.
- Travel: site visits and one trade show Planning line. Two to three trips in year one for a serious search.
- In-country legal review of the agreement Planning line. See the termination section. The least sensible place to economise.
- Buying a longer list instead of a qualified one 200 unqualified names cost the same time to work as 200 qualified ones, and produce nothing
What the published rates buy
Addresses and a mailing. Technical qualification is separate work and nobody publishes a price for it.
Frequently Asked Questions
How long does it take to find a European distributor?
Counting from the week you start research, plan on 5 to 7 months to a signed agreement and 12 to 18 months to meaningful revenue. The first four months are the long list, outreach and qualification calls, then references, the filed accounts and a site visit. Negotiation and in-country legal review run months 5 to 7. What US manufacturers underestimate is the part after signature: revenue arrives on your product's own sales cycle in the target country, on top of the partner's ramp, so ask three firms in your category what their quote-to-order cycle looks like there before you set a first-year target.
What is the difference between a Vertragshändler and a Handelsvertreter?
A Vertragshändler is a distributor: they buy your product, take title, carry stock and credit risk, and resell at a margin. A Handelsvertreter is a commercial agent: they sell in your name for commission and never take title. The commercial agent is protected by statute across the EU under Directive 86/653/EEC, including a claim to an indemnity or compensation when the relationship ends. The label on the contract does not by itself decide which set of rules applies.
Do I have to pay compensation when I terminate a European distributor?
For a commercial agent in the EU, yes, in most circumstances, under Directive 86/653/EEC as implemented locally. For a distributor it depends. German courts apply the commercial agent indemnity to distributors by analogy where the distributor was integrated into the supplier's sales organisation and was obliged to transfer its customer base on termination. Whether your agreement creates that exposure is a question for a lawyer in the relevant country, and the position varies across member states.
Should I give a European distributor exclusive rights to all of Europe?
No. Europe is roughly 30 markets with different languages, buying norms and service expectations, and no single-office distributor covers them. Germany, Austria and Switzerland work as one territory. France, Italy, Iberia, the Nordics, Benelux and Central and Eastern Europe each need their own partner. Continent-wide exclusivity granted to a partner who can work one country is the most expensive signature in European channel development.
Can I find a European distributor without attending a trade show?
Yes, though you give up the highest-yield channel. Association member lists, commercial agent networks such as the CDH, and competitor dealer pages all produce candidates without travel. What the show gives you that the others do not is 20 minutes face to face with 15 firms in three days, plus the chance to see who is standing at your competitors' stands. Most exhibitor directories are published online before the show, so you can mine the list even if you do not attend.
Do I need a European entity to appoint a distributor?
No. For machinery, EU law requires an economic operator established in the Union under Article 4 of Regulation (EU) 2019/1020, and an EU-established distributor acting as importer fills that role. You can also appoint an authorised representative under written mandate. Forming your own company becomes necessary when you hire staff, hold your own stock in-country, or bid for work that requires EU establishment. The wider decision is covered in EU market entry for US companies.
Are distributor directories like Europages worth using?
Only to confirm a company exists. Europages is a business directory and eu-distributors.com is a matchmaking platform, and both tell you who has listed themselves rather than who is any good. Neither can tell you whether a firm can commission and service your machine, which is the question that decides the partnership. Use them last, after association lists and exhibitor directories, and treat everything they return as unqualified.
The wider decision, covering conformity, country choice and when an EU entity genuinely becomes necessary, is in our guide to EU market entry for US companies.
Inmotion has run this process from the other side for years, as the overseas vendor trying to build a channel in a market where nobody knew the name: the same qualification problem, the same documentation gaps, the same wait between signature and revenue. The US market entry guides set out that method for companies travelling the other way.
Nothing on this page is legal advice. Agency and distribution law varies by member state, and any partner agreement should be reviewed by someone who practises in the country whose law governs it.