Read and translate the following text.

Big companies in Great Britain have their own network of distributive organisations to sell their goods at home and abroad. But smaller companies prefer doing their business abroad through intermediaries: agents and distributors.

The relations between the Agents and their Principals are determined by agency agreements on a commission or consignment basis, the difference being that the consignment agent sells the goods in his name and for his principal’s account like a commission agent and in addition he pays duties and taxes as well as for obtaining the import licence if necessary and often for advertising and for keeping the goods in a consignment warehouse and gets a higher commission accordingly. Also, a consignment agent may have to provide technical advice and after-sales service.

The main purpose of an Agent is seeking out customers and contracting with them on the Principal’s behalf for the sale of the Principal’s products in his country.

The essential difference between the Agent and the Distributor is that the Distributor operates on his own account as an independent purchaser for sale of the Supplier’s products, getting his remuneration from whatever profit he may make out of these sales.

The relations between the Distributor and the Supplier are determined by a distributorship agreement, stating that the Supplier grants to the Distributor the sole and exclusive right to purchase certain specified goods for sale in a given territory. Distributorship agreements are signed for the periods of up to 7 years, after which the matter can be reviewed with the intention of prolonging its effect.

Agency agreements are usually concluded for the terms of 3 or 5 years. Any overseas agency agreement should include in detail all the duties and obligations to be undertaken by both parties.

It is essential to insert into agency and distributorship agreements a statement that whatever the cause of the termination, no compensation will be paid by the Principal to the Agent or by the Supplier to the Distributor.

Answer the questions:

1. How do big and small companies in Britain distribute their goods?

2. What is the difference between a consignment and a commission agent?

3. What is the main purpose of an agent?

4. What is the difference between the Agent and the Distributor?

5. What is the difference between agency and distributorship agreements?

6. What is essential in both agreements?

Role plays.

1.You are going to draw up an agency contract. Go over the terms of the contract with your partner.

2.A is a producer, B works for an import agency. They signed an agency contract some time ago.

A: You are not satisfied with your agent's sales performance and you have had dozens of complaints from customers. Discuss the problem with you agent and try to terminate the contract if necessary.

B: You realise that the sales were below the target, but it is not only your fault. Explain it to your partner and try your best in order not to terminate the contract.

Problem-solving

Your business has been going through a bad period but recently you have been negotiating for a long-term and valuable contract. At the last meeting you were taken on one side and told that the contract would be signed if you were prepared to make a payment into a numbered Swiss bank account operated by the chief negotiator on the other side. What would you do?

Answer the questions on the topic:

1.What is an agency contract?

2.What kinds of agents do you know?

3.What contract terms should be discussed before signing it?

4.Why can the contract be terminated?

5.How is it usually done?

6.Give as much information as possible on the topic: An agency contract.

GLOSSARY

U N I T 1. Choosing an Overseas Market.

PART I BUSINESS TERMS /1.1/

business strategy - the general plan or approach used by a company to sell its products

export field - areas to which goods are exported

to break into a market - to enter a market, get into it, penetrate a market

to expand - to become bigger, increase one's business activities

market –1.overseas, external, foreign; 2. home, domestic, internal saturated market - a market in which it is very difficult for a firm to increase sales because demand is fully met

market share - the proportion of the market supplied by one manufacturer

competitive market - a market in which many firms are trying to increase their sales by competing against each other

sales promotion - the methods used to increase sales of a product by advertising, exhibitions, demonstrations, free samples, etc.

turnover - total sales for a particular period

costs - the expenses of the company such as: wages and salaries, payments for raw materials, rent of a factory, heating and lighting

to market products - to offer them for sale

restrictions on trading (trading restrictions) - these are limits on free trade, e.g. a government may not allow the import and export of certain types of goods

import duties - taxes on goods coming into the country

quota - a limit placed by a government on the amount of imports or exports of a product or commodity

to meet delivery dates - to deliver goods to a customer by, or on the date promised

trade fair - a large commercial or industrial exhibition where buyers and sellers of a particular industry or product meet to do business

item on the agenda - a single subject which will be discussed at a meeting