Many SMEs thinking of exporting for the first time or entering a new export market are faced with the decision of appointing either an Agent or a Distributor to represent them in their target markets. This short presentation explains the difference between an Agent and a Distributor and their respective roles.

1. International Marketing
&
Export Promotion
Agents
V
Distributors
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

2. Channel Definition
A marketing channel is a set of
interdependent organisations involved
in the process of making a product or
service available for use or
consumption.
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

3. Route to Market
Although there a number of different
“Routes to Market” Deciding
between an Agent or a Distributor is
the most common decision facing
most SMEs in export markets……so
what’s the difference between an
Agent and a Distributor………….
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

4. Agents
• An Agent generates sales between a principal (supplier)
and its customers and is rewarded by earning commission
– usually tied to the value or volume of goods/services
sold.
• Title, possession or risk in goods does not ordinarily pass
to the agent at any stage. One reason why an agent
receives less remuneration than a distributor.
• In an agency agreement the supplier has control over key
areas such as marketing strategies, product price lists, and
the customer base.
• The contract for sale of goods/services is between the
supplier and its customer, with the agent acting only as a
facilitator.
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

5. Distributors
• Under a distributorship agreement, the supplier
or manufacturer sells its goods/services to the
distributor who then sells onto its own customers
adding a margin to cover its own costs and profit.
• In purchasing and reselling the goods, the
distributor contracts both with the supplier and
with its own customer and title to the goods in
question normally passes to the distributor.
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

6. Common Forms of Distributorships
• Exclusive Distributorship – supplier agrees to sell his
goods/service only to the distributor within a certain
defined territory.
• Sole Distributorship – supplier appoints a distributor
as his sole or only distributor within a territory, but
reserves the right to supply the goods directly to
customers in that territory.
• Non-Exclusive Distributorship – supplier has
complete freedom both to sell directly and to appoint
another distributor in that territory.
• Selective Distributorship – supplier agrees to appoint
a distributor only if they meet certain criteria.
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833

7. Agent v Distributor
Factors for Consideration Agent Distributor
Control over price and other terms of sale Yes No
Ability to dictate choice of customer Yes No
Direct contact with customer Yes No
Close control over Marketing Yes No
Ability to offload risk of stock No Yes
Commission payable Yes No
Compensation payable for termination/expiry of
agreement
Yes No
High risk of Competition law issues No Yes
Simpler tax position No Yes
Comparative characteristics of Agents and Distributors
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833
Source: Euroman Consulting

8. Critical Factors Agent v Distributor
Financial Factors Marketing (Customer Related) Factors
Facilitation of imports Channel Relationship
Purchases Customer Relationship
Payment After Sales Service
Pricing Distribution
Risk Burden Promotion
Bellevue Creative Solutions Ltd. , 5 Banta Na Bearu, Athy, Co.Kildare. Tel: 0872499833
Source: Euroman Consulting