Agent is a person or business authorized to act on another's behalf. To understand better the dissimilarities between Agent and Principal (while these dissimilarities are considered as negligible in USA) one could use the following check-list [1].
| Comparative Factors | I am Supplyer’s Distributor if….. | I am Principal’s Agent if…..
|
| Risk Viewpoint |
- I buy products for my own risk and account.
|
- What, me take a risk? No way!
|
| Customers Viewpoint |
- I sell products to my customers.
|
- I sell products to Principal’s customers.
|
| Compensation Viewpoint |
- My compensation is the difference between my buy price and my sell price.
|
- My compensation is a flat commission.
|
| Sales Amount Viewpoint |
- I don’t brag when I make lots of sales for the Supplier. Otherwise, the Supplier will start thinking: “Gee. If it’s so easy, maybe we should be there.”
|
- When I make lots of sales for the Principal, I blow my own trumpet for a bonus or other incentive based compensation.
|
| Pricing Policy Viewpoint |
- I set the price of the products to my customer.
- My prices to the customer are none of Supplier’s business.
|
- The Principal advises me what price to sell its products for.
- The Principal and I consult closely about what price I should sell its products for.
|
| Sales Policy Viewpoint |
- I set my own sales policies.
|
- The Principal sets my sales policies.
|
| Authority Viewpoint |
- I have authority to promote, market and sell Supplier’s products pretty much as I determine.
|
- I promote, market and sell Principal’s products pretty much as the Principal determines. I must conform to Principal’s directions and only operate within my scope of authority.
|
| Customer's Perception Viewpoint |
- The customer perceives me as the supplier.
|
- The customer perceives the Principal as the supplier
|
| Contacts wits Customers Viewpoint |
- I discourage the Supplier from contacting my customers. I try to keep the Supplier in the dark.
|
- I have no problems if the Principal communicates directly with its customers provided the Principal doesn’t keep me in the dark.
|
| Checking, Packing, Marking - Inspection(s) |
- Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract.
- Provide pre-shipment inspections as required for export formalities.
- Package the goods, unless the goods are conventionally sold unpackaged.
- Package the goods as the seller deems appropriate for transport, unless the buyer has given specific requirements prior to the finalization of the sales contract.
- Provide marking appropriate to the packaging.
|
|
| Other |
- Timely provide the buyer, at the buyer’s request and cost, assistance in securing information and documents, including security information, required by the buyer for import and transport of the goods from the named port to the final destination.
- Reimburse the buyer for buyer’s costs related to securing information and documentation, including security information the seller requires for export formalities, transport, security clearance, and transshipment to the named port of destination.
|
- Timely advise the seller of any security-related data requirements.
- Reimburse the seller for seller’s costs related to securing information or documentation, including security information, that the buyer requires for import formalities, security clearance, and transport of the goods to the final destination.
- Timely provide the seller, at the seller’s request and cost, with any documents and information required for export, transport, and security clearance of the goods to the named port of destination.
|
