Pure International Commercial Middlemen
From Supply Chain Management Encyclopedia
There are many types of commercial or trade middlemen in practices of international logistics. Their main role is to facilitate creating integrated global supply chains between an original seller (manufacturer) and a final buyer (consumer, user). These middlemen – in accordance with national business traditions – are known under different names. However, they have often the same operational, financial, economical, and juridical features. Under any names (e.g., Distributor could have such names in English as “reseller”, “jobber”, “dealer”, “merchant”) main features of all these middlemen could be reduced to three “pure” types (See. the table below): agent, consignee, and distributor. And their main functions (rights and obligations) are strongly overlapped that could be extracted as a result of analyzing relevant contracts and agreements.
- AGENT [MANUFACTURER’S REPRESENTATIVE] – A person or business unit that negotiates purchases or sales or both but does not take title to the goods in which it deals. Agents commonly receive remuneration in the form of a commission and/or fee. They – in contrast with a Broker – do not usually represent both buyer and seller in the same transaction. However, agents are similar to brokers, except than agents tend to have long-term relationships with their principals whereas brokers, in general, do not. A manufacturer’s agent is the agent (middleman, intermediary) who takes neither title nor possession of the merchandise he or she helps to sell. Nonexclusive agent could represent several noncompeting producers of goods that are purchased by one type of trade (e.g. agents in women’s apparel might sell dresses, blouses, belts, coats, stockings, and so on, for different manufacturers).
- CONSIGNEE - the individual or company to whom a CONSIGNOR sends merchandise to sell this one on terms and conditions stipulated in a consignment agreement in which one party (the “CONSIGNOR”) provides goods to another party (the “CONSIGNEE”) for sale by that CONSIGNEE. The CONSIGNOR gets paid only after the CONSIGNEE has sold the goods to an end-consumer purchaser.
- DISTRIBUTOR [DEALER] [RESELLER] [JOBBER] [MERCHANT] – A firm (or an individual) selling manufactured products either to retail outlets or direct to consumers. In common parlance, DISTRIBUTORS are often thought of as having closer and more long-term relationships with the MANUFACTURERS [VENDORS] from which they buy than wholesalers.
In spite of activities of International Chamber of Commerce to standardize contract documents of international business, в реальном бизнесе царит «контрактное творчество». The real international business is full of “contract creativities”. Negative outputs of such creativities are in contradictions arisen between parties. These ones are a problem zone for both contract parities and arbitration court (if any takes place). Therefore, the corresponding ICC documents concerning international commercial intermediary, having indicative, but not directive nature, have to be studied thoroughly while preparing relevant contracts (agreements). This behavior is not only a feature of high contract culture but an element of international logistics management, mitigating so-called information risks of human factor.
Main features of so-called “pure” international commercial middlemen are systemized in the present article. This is due to the fact that industrial/national peculiarities of a relevant law as well as practices of international intermediary are too extensive material not only for one article but for many textbooks. Nevertheless, main data concerning three types of “pure” international commercial middlemen is given herein. It is sufficient to understand their role and essence of relationships in the frame of both direct and indirect exportation (See the scheme above).
- ↑ Model Contracts and Clauses - http://www.iccwbo.org/products-and-services/trade-facilitation/model-contracts-and-clauses/
- ↑ e.g., ICC Model Commercial Agency Contract - ICC Publication No. 644E, 2002 Edition; ICC Model Distributorship Contract - ICC Publication No. 646E, 2002 Edition