People often use the terms distributor and sales agents as if they were interchangeable yet they are totally different. It is vital that a potential exporter understands why so that he/she can determine which offers the right solution for them.

An agent acts on behalf of the company, known as the principal, who appoints him/her. While the agent seeks out sales opportunities for the principal, legally the sale will be concluded directly between the principal and the customer. Title to the goods never passes to the agent. If the customer is not paid, the principal bears the loss. In essence, an agent acts like a directly employed sales person although he/she is not an employee and is generally rewarded differently.

In contrast, a distributor purchases goods from a supplier and then resells the goods to their customers. Title passes from the supplier to the distributor and from the distributor to the customer. So the risk of the customer not paying is carried by the distributor. To read more of Hughs article click here