Export-Import Management (520135)

Chapter – 03
(Agents and Distributors)
Lecture- 09

Conducted By :
Lata Akter
Lecturer
Department Of Business Administration
Dhaka City College
 Topics to be discussed……..

 Foreign Market Operations

 Import / Export Agent

 Import / Export Distributor

 Difference between agent and distributor

 Sales Agent

 Role of Sales Agent

 Rights of Sales Agent

 Foreign Market Operation
Foreign Market plays an important role in economic development of a country. The economic
development of a country comprises of both domestic production and foreign market. It also
plays a vital role in the balance of payment. Foreign Market Operations are 2 types.

1. Import Operation: 2. Export Operation:

 An agreed Products or Services
 A sale contract
 Shipping & Delivery details
 Terms of payment
 Required documentation
 Insurance Coverage
 Booking of shipping space
 Packing of goods
 Booking of space for storage of export cargo
at the port of loading
 Arrangement of transportation of goods to
the port
 Import / Export Agent
 An import export agent is a middleman or intermediary between a product’s
manufacturer and resellers or even consumers in the international market scene. He bridges
the gap between these two parties and effectively makes smooth business transactions
between countries. Most of them work on commission basis, bringing the two interested
parties together and facilitating their transaction.
 However, an agent does not take title to the goods and provides fewer services than a
distributor does. The agent’s role is to get orders and (usually) earn a commission for his
services.
 Types of Agents
1. General or Traditional Agents: They carry out transactions on behalf of their principals. They
usually hold all the cards that connect the principal to a third party. In international trade, such
agents might represent the interests of a supplier or even a reseller in a foreign market.
2. Brokers: Brokers are independent agents who normally work on one-off deals instead of
representing a company. International trade brokers locate business opportunities for exporters
and make their commission based on the volume of trade. There are two kinds of import
export brokers:
a. Merchandise Broker: This kind of broker negotiates suitable terms between a buyer and seller
and facilitates product purchase. Unlike agents, these brokers have no control over the product in
question as it is sent directly to the buyer.
b. Customs Broker: This is an individual or company that holds a customs broker license for
purposes of entering and clearing goods from overseas markets. An import customs broker is also
referred to as a customs agent or customs clearance agent.
 Import / Export Distributor

 A distributor is an independently owned business that is primarily involved in wholesaling

and takes title to the goods that it’s distributing. A distributor is a middleman who handles
consumer or business goods that may be manufactured or not manufactured (such as
agricultural products), imported or exported, and then sold.
 Distributors typically purchase goods on their own account and resell them at a higher price,
accepting the risks and the rights that come with ownership of the goods.
 Differences between Distributor & Agent
1. Ownership of goods :
Agents do not take ownership of goods. Distributors purchase goods and resells them to consumers.
They also provide support and after-sales services.
2. Revenue model:
Agents are paid by supplier through commission on sales. The supplier sets the selling price.
Distributors add margins on top of prices, which can be higher than an agent’s fees. Subsequently,
the price becomes higher for consumers.
3. In-market operations :
Agents orders go through suppliers but the agents will deliver, invoice, and collect payments from
customers. Agents will focus on sales and sales development. Distributors take care of inventory,
they extend credit to customers and provide more services than agents.
4. Product sales and risk :
Agents have smaller product ranges than distributors. An agent provides more focus on products.
Distributors sell multiple products. Their focus is more divided.
 Sales Agent

 A person or a company that acts as a sales agent on behalf of the exporting company
(principal), introducing its products to potential buyers in the external market, in
exchange for a commission based on the value of the business deals arranged and paid
to the principal.
 A sales agent is a person who is appointed by those in the business to act on their behalf
to represent them in dealing with other persons. The person on whose behalf he acts as
an agent is known as principal.
 Role of Sales Agent

1. Performance of duties
2. Maintenance of skills, care and diligence
3. Render Proper accounts
4. Return money received
5. Delegation of authority
 Rights of Sales Agent

1. Right to receive remuneration

2. Right to meet necessary expenditures and get it
reimbursed from the principals
3. Right to hold agency or property
4. Right to get losses indemnified by the principals
5. Right to detain goods in transit.
Thank You