Opening a business agent is considered one of the business forms that bring a relatively large profit as well as quite safe for business people. So what is this business model in fact and what are the things you need to keep in mind before becoming an agent of a brand? Let's find out with Sapo right in the sharing below.
1. What kind of business is opening an agent?
Agency business is understood as a commercial relationship between two parties when performing tasks as entrusted by the other party to enjoy the discount policy for agents or incentives as agreed upon by the two parties. This form of business is often popular with consumer products and famous brands in the market.
2. Types of agency business
Known as a commercial intermediary, opening a commercial agency will be an activity between the agent and the principal. There are 3 types of agency business as follows:
- Undertaking agency: This is a form of opening an agent where the agent buys and sells a whole volume of goods or provides a full service to the principal.
- Exclusive agent: Commonly known as a level 1 agency, with this form, the principal will only assign an agent to buy, sell or a certain number of goods and services in an area authorized dealer.
- General agent buying and selling goods and providing services: This is the form in which the agent will become the general agent, representing the affiliated agent system to carry out the purchase and sale of goods and provision of services.
3. How is agent remuneration calculated?
Normally, doing business in the form of an agent, the agent will make the purchase and sale on his own behalf and receive a remuneration. Remuneration will be paid in the form of commissions or price differences.
Remuneration paid in the form of commission: This is a form of remuneration calculated as a percentage when the principal sets the price of buying and selling goods or providing services.
Remuneration based on price difference: In case the principal does not fix the price of buying or selling goods or providing services, but only sets the price for agency delivery, the remuneration will be calculated on the price difference.
In the event that the agency's remuneration cannot be agreed upon, the remuneration will be calculated according to the actual remuneration previously paid by the parties, or based on the average remuneration applied to the same type of goods or services. services paid by the principal to other agents.
4. What are the ownership rights for goods and services?
The principal will be the owner of the goods and the money will be handed over to the agent. However, the agent can completely evaluate and consider the quality of goods and services of the principal.
If there are problems of violation, if there is a fault of the agent, they must be jointly responsible for the quality of those goods and services. On the other hand, the principal is also responsible if the act of violation is caused by the principal.
5. Agent term
The agency term will end after a reasonable time but not earlier than 60 days from the date on which either party gives written notice of termination of the agency opening contract.
If the principal gives notice of termination of the contract, the agent has the right to claim compensation for the time spent as an agent.
However, if the agent is the one requesting the termination of the contract, the agent has no right to claim compensation from the principal for the time spent as an agent.
6. Conditions to become an agent
To become an agent, you need to meet the following conditions:
- Being a trader, can be an enterprise or an individual business household (which has been granted an enterprise registration certificate or a business household registration certificate by a competent authority).
- Your business or individual business household must be registered as a wholesaler or retailer.
These are considered mandatory conditions as prescribed by law, however, each business will have its own criteria for selecting agents as well as certain binding regulations for sales agents.
Therefore, if you want to become an agent of a brand or business, make sure you discuss all the terms in detail before signing the contract to avoid risks and disputes later.
7. What is a agent level 1 and a agent level 2?
Level 1 agent is understood as a system of business stores that import goods directly from the manufacturer without going through any other distributors. Brand companies often look for tier 1 agents to distribute products widely to consumers.
Level 1 agents will usually be registered exclusively in an area, locality or province to ensure monthly sales and product quality targets.
As soon as you open a direct agent, you will have the opportunity to import goods at the original price, in addition to enjoy high discounts as well as percentage bonuses, quarterly and annual bonuses, ... if you can ensure the instructions. title stated.
Level 2 agents will usually import goods from tier 1 agents and be managed by tier 1 agent systems. Level 2 agents will not have to bear too much pressure on quotas, products or conditions. conditions like level 1 agents, but will not receive as many high discount policies for agents as level 1 agents.
To open a genuine dealer, you need to have a large investment capital or have a space to display goods, a warehouse to store goods, the ability to consume goods stably as well as a warehouse to store goods. Depending on your business ability and direction, you can choose the most suitable and least risky retail forms.
See more: 5 experiences you must remember to open a profitable sales agency
