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Appointing a Sales Agent.


Introduction

Selling a product through an overseas agent is a very successful strategy. Sales agents are available on commission basis for any sales they make. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market. Sales agent also provides support to an exporter in the matter of transportation, reservation of accommodation, appointment with the government as and when required. It is, therefore, essential that one should very carefully select overseas agent.

Merits of Appointing a Sales Agent

There are various types of merits associated with appointed a sales agent for export purpose are as follow:
  • Sales agent avoids the recruitment, training, time and payroll costs of using own employees to enter an overseas market.

  • An agent is a better option to identify and exploit opportunities in overseas export market.

  • An agent already have solid relationships with potential buyers, hence it saves the time of the exporter to build own contacts.

  • An agent allows an exporter to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.

Demerits of Appointing a Sales Agent

There are also certain disadvantages associated with appointing a sales agent for export purpose which are as follows:

  • After-sales service can be difficult when selling through an intermediary.

  • There is a risk for exporter to lose some control over marketing and brand image.

Important Points While Appointing a Sales Agent:
Appointing right sales agent not only enhance the profit of an exporter but also avoid any of risks associated with a sales agent. So it becomes important for an exporter to take into consideration following important points before selection an appropriate sales agent for his product.

  • Size of the agent's company.

  • Date of foundation of the agent's company.

  • Company's ownership and control.

  • Company's capital, funds, available and liabilities.

  • Name, age and experience of the company's senior executives.

  • Number, age and experience of the company's salesman.

  • Oher agencies that the company holds, including those of competing products and turn-over of each.

  • Length of company's association with other principal.

  • New agencies that the company obtained or lost during the past year.

  • Company's total annual sales and the trends in its sales in recent years.

  • Company's sales coverage, overall and by area.

  • Number of sales calls per month and per salesman by company staff.

  • Any major obstacles expected in the company's sales growth.

  • Agent's capability to provide sales promotion and advertising services

  • Agent's transport facilities and warehousing capacity.

  • Agent's rate of commission; payment terms required.

  • References on the agents from banks, trade associations and major buyers.

Some source of Information on Agents is:

  • Government Departments Trade Associations.

  • Chambers of Commerce.

  • Banks.

  • Independent Consultants.

  • Export Promotion Councils.

  • Advertisement Abroad.

Agent v Distributor
There is a fundamental legal difference between agents and distributors and an exporter should not confuse between the two. An agent negotiates on the behalf of an exporter and may be entitled to create a legal relationship between exporter and the importer

A distributor buys goods on its own account from exporter and resells those products to customers. It is the distributor which has the sale contract with the customer not the exporter. In the case of distributor, an exporter is free from any kinds of risks associated with the finance.

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What is New?

Date: 14-11-2019
Notification No. 52/2019 – Central Tax
Seeks to extend the due date for furnishing FORM GSTR-1 for registered persons in Jammu and Kashmir having aggregate turnover of up to 1.5 crore rupees for the quarter July, 2019 to September, 2019

Date: 14-11-2019
Notification No. 53/2019 – Central Tax
Seeks to extend the due date for furnishing of return in FORM GSTR-1 for registered persons in Jammu and Kashmir having aggregate turnover more than 1.5 crore rupees for the months of July, 2019 to September, 2019

Date: 14-11-2019
Notification No. 54/2019 – Central Tax
Seeks to extend the due date for furnishing of return in FORM GSTR-3B for registered persons in Jammu and Kashmir for the months of July, 2019 to September, 2019

Date: 14-11-2019
Notification No. 55/2019 – Central Tax
Seeks to extend the due date for furnishing of return in FORM GSTR-7 for registered persons in Jammu and Kashmir for the months of July, 2019 to September, 2019

Date: 14-11-2019
Notification No. 56/2019 – Central Tax
Seeks to carry out Seventh amendment (2019) in the CGST Rules, 2017. [Primarily related to Simplification of the Annual Return / Reconciliation Statement]

Date: 13-11-2019
Notification No. 31/2015-2020
Notification of ITC (HS), 2017 - Schedule-1 (Import Policy)

Date: 13-11-2019
Notification No. 32/2015-2020
Amendment in import policy of Iron & Steel and incorporation of policy condition in Chapter 72, 73 and 86 of ITC (HS), 2017, Schedule-1 (Import Policy).

Date: 13-11-2019
Public Notice No. 43/2015-2020
Enlistment as designated port in Para 2.54 (d) (vi) Handbook of Procedure, (2015-20).

Date: 11-11-2019
Notification No. 44/2019-Customs (ADD)
Seeks to amend notification No. 1/2017-Customs dated 5th January, 2017 to insert S. Nos. 48 to 52 in the duty table to finalize the assessment of exports of jute products by M/s. Roman Jute Mills Ltd. (Producer/Exporter) and M/s SMP International, LLC,USA (Exporter/ Trader), M/s Aziz Fibres Limited (Producer/Exporter), M/s Natore Jute Mills (producer), Bangladesh and M/s PNP Jute trading LLC (Exporter/Trader), USA.

Date: 11-11-2019
Notification No. 43/2019-Customs (ADD)
Seeks to rescind notification Nos. 24/2018- Customs (ADD) the dated 7th May, 2018, 41/2018- Customs (ADD) and 42/2018- Customs (ADD) dated 24th August, 2018 which had prescribed provisional assessment on export of jute products from Bangladesh by specified exporters.



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