Intermediaries

Merchants

  1. These middlemen are principals who trade on their own account and therefore own the goods and earn profits from their trading activities. Exporters and importers are the merchants in foreign trade while the wholesalers are merchants who engage in home trade.

 

Forwarding agents

Forwarding agents are middlemen in international trade who specialise in moving goods from country to country. They arrange transport, documentation, customs clearance, insurance, storage so that the owner of the goods does not have to do this e.g. DHL, FED EX.

Mercantile agents

  1. These middlemen act on behalf of their principals in finding would-be sellers and would-be buyers of the goods and services of their principals. They do not own the goods and services. They earn commissions for their services. Some mercantile agents act as ‘brokers’ and some as ‘factors.

 

Broker

A broker is a middleman who:

  • Finds buyers for the seller.
  • Does not take possession of the goods.
  • Cannot sell in his own name.
  • Cannot sell at his own price.
  • Receives commission for his services.

 

Factor

A factor is a middleman who:

  • Finds buyers for the seller.
  • Takes possession of the goods.
  • Can sell in his own name.
  • Can sell at his own price.
  • Makes a profit out of sale.

Del Credere Agent

A del credere agent is a middleman(factor) who:

  • Finds buyers for the sellers.
  • Takes possession of the goods.
  • Guarantees to sell all the goods.
  • Receives higher commission for his services.

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