What is an agent

Agents handle business on behalf of the company, rather than buying out the company's products. It is a business behavior in which the manufacturer gives the merchant a commission amount. The ownership of the goods represented belongs to the manufacturer, not the merchant. Because merchants are not selling their own products, but reselling them on behalf of enterprises. Therefore, "agent" generally refers to a commercial unit that earns corporate agency commissions.

1. Definition of agent

Agent is also called a business agent. A general agent who accepts entrustment from others to facilitate or conclude transactions for others within the scope of his or her industry practice.

2. Characteristics of agents

1. The main responsibilities are Facilitate and conclude transactions for yourself;

2. Must regularly engage in activities entrusted by others;

">3. Be an independent commercial operator;

4. The agent does not have to be a businessman, and it does not need to be for profit.

3. Differences between agents

Characteristics of dealers p>

1 Independent business organization

2 Owns the ownership of the goods (buys out the manufacturer's products/services)

3 Obtain operating profits

4 Operate in multiple varieties

5 The process of business activities is not or rarely restricted by suppliers

6 Equivalent responsibilities and rights with suppliers

Agent

1 is not necessarily an independent agency

2Do not own the ownership of the goods (agent for the manufacturer’s products/services)

3 Earn commission (commission)

4 Business activities are subject to the guidance and restrictions of suppliers

5 has greater supply power

Channel channels from manufacturers to retail terminals

1. Manufacturer → Dealer → Consumer

2. Manufacturer → General Agent → Dealer → Consumer

3. Manufacturer → general agent → first-level agent → dealer → consumer

4. Manufacturer → general agent → first-level agent First-level agent → Second-level agent →… → Dealer → Sub-dealer → Consumer

4. Types of agents

1. General agent: also known as full agent, is an agent who acts as the plenipotentiary representative of the principal in the market. This kind of agent has the right to handle his daily business or professional activities affairs that occur at any time in the company, and also has the right to engage in general activities in the name of the principal.

2. Exclusive agency: It is a narrow concept of agency, which refers to the It stipulates that agents have the exclusive right to sell certain commodities in a specific area and within a specific period. Their business is limited to commercial activities and has a monopoly nature.

3. General agency Agent: means that in the same region and within the same period, the client can select one or several agents as general agents and pay prescribed commissions and compensation fees based on sales performance.

4. Single trade name agent: refers to an agent that only engages in agency activities for a single business owner. Its operating benefits first depend on the business provided by the business owner and are highly dependent on the business owner.

5. Regional agents: refers to agency activities engaged in a certain region or a certain consumer group. This does not exclude the business owner from concluding transactions in the region or The possibility and legality of a transaction facilitated by a third party, but even if he is not involved, he still has the right to claim commissions for transactions concluded by members of the regional or consumer groups who should be represented by him as stipulated in the corporate relationship.

6. Franchised agent: refers to someone who has been grantedA businessman who has a franchise or preferential distribution rights and engages in independent business activities.

5. Authorization of the agent

The method is entrusted A person signs an agency agreement with an agent, authorizing the agent to represent him within a certain range in buying and selling goods to third parties or handling related matters (such as signing contracts and other transaction-related matters, etc.). The rights and obligations arising from the acts performed by the agent within the scope of authorization of the principal are directly effective on the principal, that is, the agent acts in the name of the principal within the scope of authorization. The two agents belong to a consignment relationship between entrustment and entrustment, rather than a sales relationship. In the agency business, the agent only solicits customers, solicits orders, signs contracts, handles the client's goods, collects payment, etc. on behalf of the client and earns commissions from it. The agent does not need to use its own funds to purchase goods and is not responsible for profits or losses. After both parties establish an agency relationship by signing an agency agreement, the agent has the obligation to actively promote products and enjoys the right to collect commissions. At the same time, the agency agreement generally stipulates a non-competition clause, that is, during the validity period of the agreement, the agent cannot purchase or provide Products that compete with the principal's products or organize advertising for the products; the agent also has no right to represent other competing companies in the agreed area.

6. Functions of agents

The establishment of agents, It can share the risks of manufacturers, allowing manufacturers and agents to jointly stimulate the market and reduce the operating risks of manufacturers. At the agent level, in addition to setting up general agents, agents can also set up first-level agents or regional agents according to the manufacturer's channel model and cooperate with terminal sellers at the same time. In this way, agents transform from simple distribution to channel maintainers with management functions. In addition to business management, agents also have various functions such as brand management, promotion management, service docking, and financial management.