Agent wholesalers

Agents are wholesalers who actively assist in the sale of products (or services) without taking title to them. They bring buyers and sellers together. Generally agents perform fewer services than limited-function wholesalers. The most important types of agent wholesalers are (1) brokers, (2) selling agents, and (3) manufacturers’ agents.

Brokers. In a typical transaction, a broker negotiates the sale of a product and then allows the seller to accept or reject the prospective buyer’s offer. When such transactions are completed, brokers are paid by whoever hired them. They are paid a commission ‑ a percentage of the dollar amount of products sold. Most brokers work for sellers, although a small number do represent buyers. They furnish valuable information about products, prices, and general market conditions. Brokers do not physically handle products.

Brokers often deal in products that are seasonal which means that sellers cannot offer them year-round. Examples of seasonal products are fruits, vegetables, and seafood. A broker is hired for a single transaction or to sell a specific lot of goods. The seller may not have dealt with the prospective buyers previously and may not know how to contact them. A broker fills the gap. For instance, a vegetable canner may hire a broker to contact buyers and negotiate the sale of a season’s stock. When the entire supply of canned vegetables has been sold, the broker’s services are no longer needed.

Selling Agents. Selling agents are independent middlemen who perform the entire marketing task for firms. A producer will hire one selling agent to market the entire output of a company; however, a selling agent will usually perform marketing functions for more than one noncompeting producer. They are frequently hired by producers who cannot afford complete marketing staffs. Selling agents are given the authority to set prices and to decide how products will be promoted. They handle goods such as coal, metal products, timber, food items, and textiles.

Manufacturers’ Agents. Producers employ only one selling agent, but they often hire a number of manufacturers’ agents. Manufacturers’ agents are independent middlemen who sell similar products for several noncompeting manufacturers. They sell these products according to the instructions of the companies they represent. Manufacturers’ agents are usually not involved in setting prices or in negotiating the terms of sales. They are restricted to specific sales areas or territories.

The services provided by manufacturers’ agents are useful when a company’s sales volume is too small to support a sales force. Because these agents already call on a group of customers, they can add another manufacturer’s product to their sales lines at a relatively low cost. Manufacturers’ agents are used to sell a wide range of items including electrical products, machinery and equipment, and some types of clothing.

The marketing of services

Services are tasks that we pay others to do or provide for us. Some familiar enterprises that provide services are laundries, dry cleaners, day-care centers, automobile repair shops, movie theaters, airlines, and motels.

Unlike a product that is manufactured in one city and then transported to another to be sold, a service cannot readily be separated from its producer or provider. For example, a hairstylist or barber provides a service for customers while they sit in a chair. Consequently, since services are provided as they are wanted, there is usually no need for transportation or storage.

The channel of distribution for services is often direct from producer or provider to customer. The difference, then, between the marketing of services and the marketing of products is that services are produced and consumed at the same time. Thus, no middlemen are required. But not using middlemen limits the geographic area of the markets that service sellers can reach; however, these sellers are able to personalize their services and get quick and detailed feedback from their customers.