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In the video, Simon from The Contract Company discusses the essential clause every distributor seeks in a distribution agreement: exclusivity. He explains that a distributor, who receives goods from a supplier, wants to secure exclusive rights to distribute those products within a designated region. This exclusivity ensures that the distributor can invest time and resources in marketing the brand without competition from other distributors, including the supplier. By having exclusive rights, the distributor can effectively control the distribution and sales of the goods in their area. Simon emphasizes the importance of this clause for maximizing the distributor's marketing efforts and investment.