Sell through a commercial agent
Introduction
Commercial agents are intermediaries that sell your goods or services on your behalf in return for commission.
Businesses usually appoint agents because they need their specialist help in reaching markets in a particular sector or geographical location.
Agents can be particularly useful for new businesses that have yet to build up a substantial number of contacts or can’t yet afford to employ a dedicated salesperson.
Many businesses use agents to access domestic markets – but they can be particularly useful in overseas markets where different customs, ways of doing business or language barriers come into play.
This guide will help you decide whether a commercial agent can help your business and explains how to find and choose a commercial agent and ensure the relationship works.
Advantages and disadvantages of using commercial agents
Whether using commercial agents can help you develop your business often depends on the nature of your product or service and where you want to sell it. If you are producing an easily recognisable product or service for a local market then there may be little point in appointing an agent. In some cases, using an agent can be a cost effective way to test a new market.
Advantages of using commercial agents
The main benefits of using a commercial agents to sell your goods are:
Lower overheads – you don’t have to pay for the salary, the car or the office of sales agents.
Easy to find – agents are easier to recruit than experienced sales executives with specialist knowledge.
Cost – using a network of agents can be a cost-effective way of reaching a wide variety of markets.
Local experience – some markets, including overseas markets, are difficult to break into without existing contacts, local knowledge and experience.
Disadvantages of using commercial agents
Some of the downside of using commercial agents are:
Control – it can be difficult to control the agent’s activities and to make sure they continually work hard on your behalf.
Sales methods – an agent might not sell your product or service in the way that you would like.
Customers – they might sell to unsuitable customers who might undermine the integrity of your product.
Understanding – an agent might not fully understand your product or service and you may be better off with hands-on control.
Contract – they can be entitled to compensation on termination of the contract even if they breached the agreement.