Asking for an agency

Here is a guide to the kind of letter you should write if you want to offer your services as an agent to a manufacturer.

10.4.1

Opening

Explain who you are and how you saw or heard of the manufacturer's product.

You were recommended to us by our associates Lindus Products Ltd., of Lagos, who told us that you were looking for an agent to represent you in oil-drilling equipment in Nigeria.

We are contacting suppliers of medical equipment in your country with a view to acting as their representatives here in Saudi Arabia. Your name was given to us by the British Consul in Jeddah. We already import medical supplies from a number of different countries, but are particularly interested in the E. E. G. machines and scanners you manufacture.

10.4.2

Convincing the manufacturer

You have to convince the supplier first that there is a market for his product in your country or area, and second that you are the best person to develop the market and sell his goods.

As you know, Germany is extending its farming areas with the aid of government grants to farmers and this expansion is creating a demand for all forms of agricultural machinery, particularly with regard to your products. We have many contacts in the government who will direct us to large-scale farms and enterprises which are in the market for your products.

We have an established reputation in Nigeria for supplying oil companies here with excavation and drilling equipment and are quite willing to offer you references. We can also assure you of excellent sales prospects as the oil industry is rapidly expanding.

Because we have a/ready established business relationships with hospitals and clinics here in Saudi Arabia we are sure that we would be the best company to represent you here. And as you are probably aware, the development of the health service here means that generous grants to clinics and hospitals have increased the demand for the more sophisticated equipment that you manufacture.

10.4.3

Suggesting terms

You may want to leave discussion of terms until after you know that the supplier is interested in your request. But there is no harm, even at this stage, in describing the terms on which you normally operate and asking if they would be acceptable in the present case.

May we suggest the terms we usually operate on to give you an idea of the sort of agency contract we are considering? We generally represent our principals as sole agents for Germany, buying products on our own account, with an initial contract to run for one year, renewable by mutual agreement. We expect manufacturers to offer advertising support in the form of brochures - in German and English -and catalogues, and in return we promise our customers a full after-sales service and two-year guarantees on all products. Therefore we would expect a first class spare-parts service with delivery for both manufactures and spare parts within six weeks of receipt of order. We would pay you direct by 40-day bill of exchange, documents against acceptance. If this type of agency interests you, please contact us so that we can draw up a draft agreement.

10.5

Specimen letters and forms

10.5.1

Offer of an agency

In this set of three specimen letters, the manufacturer offers an agency, the prospective agent discusses terms, and the manufacturer replies by adding more details and sending a copy of an agency agreement.

Questions

1. Who recommended the agency to British Crystal?

2. Where does British Crystal export to at present?

3. What type of agency are they offering?

4. What commissions could the prospective agent earn?

5. Are they offering the prospective agent any additional help?

6. What does Mr Jay mean by a unique opportunity' and 'resources to handle a sole agency'?

7. What is the condition for the agent offering his customers credit terms?

8. Which words are used to mean: a wide range and unusual damage?