Sole distributorship means your company is the only one in a particular territory that the *manufacturer* will sell to directly - usually in exchange for KPIs around marketing, distribution and maybe service in addition to sales.

Anyone else can buy it in an outside territory - for example from another distributor or even from the manufacturer itself (strange things are known to happen when people's incentives are tied to sales targets) and sell it in your territory. While this is often called "grey channel" or "parallel imports", this is perfectly legal if the importer pays customs duty etc and invariably seems to happen if there is significant price differentiation between territories.

The way to combat grey channel is to price right across territories in a way that it's not worth anyone's while to do parallel imports.