Article

Frequently the terms "agent", "distributor", "rep", and "partner" are used interchangeably. However, the difference between agents and distributors are distinct.

An independent or manufacturer′s agent is either a sole proprietor or incorporated entity working in an exclusive geographically designated territory or a particular market/customer segment. An agent may represent one or more principals (The term principal is used to describe the manufacturer or supplier of goods or services sold by the sales agent).

An agent may represent one or several non-competitive lines. The agent is compensated on a commission-only basis for goods shipped or billed from the principal represented. Agents control their own time and level of sales effort. The responsibilities and obligations between the agent and principal or company are usually outlined in a written contract between the parties.

A "distributor" tends to be an entity with brick and mortar assets, which purchases (imports) products, takes title, stocks, maintains inventory, and re-sells the product to end-users. Distributors or “dealers” usually work on a sliding scale discount basis and provide installation, repairs, customs and port clearances, delivery, and after-sales service such as warranty work.

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