Upstream and Downstream Sales Law and Legal Definition

Upstream and Downstream sales are normally associated with inter-company sales. Upstream is a subsidiary selling into the parent entity; while downstream sales are from parent to subsidiary. Financially, it usually refers to loans, since dividends and interest generally flow upstream. Term is also used by securities analysts, particularly oil analysts, meaning earnings or operations at or near the end-product stage. In an integrated oil company, for example, downstream would refer to the retail gas pump, upstream to exploration.