Agency

In inernational trade, a lot of business work is handled not only by direct negotiation between buyers and sellers, but also by agencies and intermediaries.So it often resorts to the help of agents,who will be employed to represent the company and sell its products in an area too distant to be effectively covered by the company itself.
Befor entering into this business, should make searching inquiries into the qualitifications,experience and personal qualities of prospective agents.
1.their reliability and financial soundness
2.their market connection and the effectiveness of their sales orginization
3.their technical alility to handle goods to be marketed
4.the nature and extent of other agencies they may hold,and in particular whether these are concerned with the sale of competing products

The above-mentioned matters should be paid attention to,since they will be working without local supervision or control.
According to the different rights and responsibilities, can be classified into several kinds
1.General Agent--A firm or person who acts under some degree of instruction from his principals to sell or buy goods on the best terms obtainable.Charges a commission for his service under some kinds of agreement or contract
2.Sole Agent (Exclusive Agent)--A firm or a person who acts exclusively for one foreign principal with sole agency right to sell or serve under some kinds of agreement.
3.Broker--a firm or a person who negotiates sale and purchase contracts for buyer or and sellers with rights of their own in the googs.
4.Factor --one who transacts business for another as agent who handles goods for resale.
5.Del credere Agent agency merely for transmitting consignments or carrying stock and so on.
When the terms of agency are set out in correspondence between two parties, a formal agreement may be drafted by one of the parties in consultation with the other. A agency agreement should include all or some of the following:
1.the nature and enduration of the agency
2.the territory to be covered
3.the duties of agent and principal
4.the method of purchase and sale (e.g. whether the agent is to buy for his own account or "on consignment")
Sample Letters for Agency

1.Appointing an Agent
The agents are paid either by receiving commissions on the prices of the goods that are sold through their effors or by receiving fixed fees. Finding a successful one may have great advantage to a business company,and may be much more effective and economical than sending a representative to another country,who may be a complete straiger.The agent on spot will have detailed knowledge of his own area and if he works on commission, he only get paid if he is successful.
There are some kind of agents who usually specialize in one particular kind of trade,e.g. Selling Agents,Buying Agents,Forwarding Agents,The Del Credere Agents
Looking for an Agent (example)
Dear Sirs

We are keen to extend our exports to Africa of top-class office furniture and are looking for suitable agents to represent us.

If you are interested in having the Kenya agency for a twelve-moth trial period, we should be pleased to send you the draft agreement stating the terms and condition of the agency.We enclose for your informaiton a copy of our latest catalogue and price list.

We look forward to hearing from you and receiving your reference.

Yours faithfully,

Reply:

Dear Mr. Frank,

We thank you for your letter of 23th of August,in which you offered us the Kenya agency for your office furniture.

We should be pleased to represent you here, and have pleasure in enclosing a short account of our activities together with the names of three companies with whom we have had dealings for a number of years.

We look forward to receving the draft agreement setting out the terms and conditions of the above agency.

Yours faithfully

Offering a Agent (example)
Dear Sirs,

Our sales to Greec and the Near East increased so mush in the last six months that we feel we should appoint an agent in this area. We feel that there is a very large potential market for the hand-made shoes,both men's and ladies', that we make.

We are writing to offer you the Sole Agency for our shoes in Greece and the Near East.

We would be prepared to pay $850 toward the cost of an initial advertising campaign and would pay you 15%of the invoice of orders taken by you,payable quarterly by Banker's draft.

We hope you agree about the sale potential of our product and shall look forward to look foward to hearing from you.An early reply would be appreciated,as we are anxious to get these shoes into the shops in this area and would like to approach another agent if you are not interested.

Your faithfully,

Applying for Agency

If you are quite sure that you can offer some special advantages by using your knowledge fo certain products and the market as well as your long-established relations in your area, you can try to write directly to a firm you get to know by chance or answer an ad so as to get a satisfactory pay.
However,failure to take the following into account will only lead your application to nowhere.
1.Tell the truth.Do not boast or overstate what you really can offer,for no principal is such a fool as to believe reaily what you say without through investigation.
2.Mention the rate of commission reasonably.Do not ask for more than you should be paied.An unreasonable and greedy requests will merely result in the principal's disgust and a slim chance of your getting what you should win.
Example:

Dear Sir,

We write to offer our services as your agent in South Africa. If,however,you are already satisfactorily represented here,please ignore this letter.

There is a growing demand here for Spanish textiles,especially fancy worsted suiting and printed cotton fabrics.The prospects are really excellent for good quality fabrics at competitive prices.As soon as we are in possession of details and samples of your range,we shall be in a posion to advise you on their suitability for this particular market,to choose qualities that are likely to sell well,and then to visit our customers with your collections.

With regard to reference,you may write to any of the major London confirming houses,to our bank, the Union State Bank Ltd. or to any of our customers. We are known throughout the trade as agents of the highest integrity.

We look forward to hearing from you and to the possibility of representing you in South Africa.

Your faithfully,