Sell through a commercial agent

Advantages and disadvantages of using commercial agents

Guide

Whether using commercial agents can help you develop your business often depends on the nature of your product or service and where you want to sell it. If you are producing an easily recognisable product or service for a local market then there may be little point in appointing an agent. In some cases, using an agent can be a cost effective way to test a new market. 

Advantages of using commercial agents

The main benefits of using a commercial agents to sell your goods are:

  • Lower overheads - you don't have to pay for the salary, the car or the office of sales agents.
  • Easy to find - agents are easier to recruit than experienced sales executives with specialist knowledge.
  • Cost - using a network of agents can be a cost-effective way of reaching a wide variety of markets.
  • Local experience - some markets, including overseas markets, are difficult to break into without existing contacts, local knowledge and experience.

Disadvantages of using commercial agents

Some of the downside of using commercial agents are:

  • Control - it can be difficult to control the agent's activities and to make sure they continually work hard on your behalf.
  • Sales methods - an agent might not sell your product or service in the way that you would like.
  • Customers - they might sell to unsuitable customers who might undermine the integrity of your product.
  • Understanding - an agent might not fully understand your product or service and you may be better off with hands-on control.
  • Contract - they can be entitled to compensation on termination of the contract even if they breached the agreement.