Agents 1 defining an agency

A vast amount of international trade is handled not by direct negotiation between buyer and seller but by agencies, usually in the country of the buyer. Agents and agencies are appointed by firms to represent them. There is a wide range of activities concerning representation (brokers, buying and selling agents etc.).

It is possible to find an agent through a number of sources: advertising; in Trade Journals; contacting government departments of trade in your own country or the country you wish to export to; consulting Chambers of Commerce, Consulates, Trade Associations, and banks.

There are two types of agency: a sole or exclusive agency, when your agent will only be supplied by you in a particular area, and when he will not sell products that compete with yours; and a non-exclusive agency where there is no such undertaking. The agency contract explains the conditions on which the agency will be operated and what the rights and obligations of the agent and principal (the firm they represent) are.

It should be established whether you are going to deal with your agent on a consignment basis, when the agent will not own the products you send, but will sell them on a commission basis; or whether you want to supply the agent for him to re-sell to customers on his own account, in which case he will decide on resale prices and take the profits from his sales.

In some cases agents are offered special terms if they are prepared to hold themselves responsible for their customers’ debts. These agents receive a ‘del credere commission’, which is a special commission to compensate them for the risk they take.

INTERAKO Ltd.

Petaling Jaja D 48 Sommersby Kuala Lumpur

Tel. Telex. Fax.

Our ref. _______ Your ref. ______

October 15, 20__

ZAO Rusexport

17-A Novoslobodskaja

Moscow

Russia

Attn: To whom it may concern

Dear Sirs,

Your company was recommended to us by the Trade Representation of Russia in Malaysia as the sole exporters of software of Russian origin to South Asia. Deputy Trade Representative Mr Smirnov A.B. informed us that you are interested in finding agents in Malaysia for promoting, retailing and servicing your goods.

Our object in writing to you is to inquire whether you would consider appointing us as your Agents for the sale of your products in this country.

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We are an established company dealing in hardware and software products in South Asia. For some years past we have been acting on behalf of software producers of Taiwan, Hong Kong and South Korea. We have considerable experience in the sale and after-sale maintenance of all types of software programs. We can also assure you of excellent sales prospects as the sophisticated software market is rapidly expanding. We have a wide range of retail outlets and show rooms where your products can be shown to advantage.

If we meet your requirements and if you entrust us with the sale of your goods as your Agents, we would like to handle an exclusive agency charging a 10% commission on the net amount of all invoices for the goods sold through us. We operate on additional 3% del credere commission if required.

For references you may apply to the Petrobank of Kuala Lumpur, which would provide you with all the information you might desire concerning our status.

If our proposal is acceptable to you we should be glad to obtain any information from you as well as prospectuses and illustrated catalogues with prices and any other printed matter.

Looking forward to your early reply

Yours faithfully,

M.Wang

M.S.Wang

Director