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Whether using commercial agents can help you develop your business often depends on the nature of your product or service and where you want to sell. If you are producing an easily recognisable product or service for a local market then there may be little point in appointing an agent. In some cases, using an agent can be a cost-effective way to test a new market. 

Advantages of using commercial agents

Using sales agents and distributors for your business can offer many benefits. They can help reach your target market and provide a convenient and effective way to expand your business's reach and boost sales.

Immediate market access

Using sales agents and distributors can provide immediate access to your target market. This is especially helpful for small to medium-sized businesses, which may not have the resources to establish their sales presence.

Marketing expansion

Breaking into new markets can be challenging, especially unfamiliar or international ones. Sales agents and distributors have local market knowledge, established relationships, and expertise. This is especially valuable for expanding into overseas markets, where cultural differences, rules, and language barriers can be major obstacles.

Cost effective sales strategy

Using sales agents and distributors can be a low-cost alternative to having your own sales force. You can avoid the costs of recruiting, training, and keeping a dedicated sales team. Instead, you can use sales agents or distributors' existing resources and infrastructure. This will cut costs and allow you to allocate resources better.

Risk mitigation

Entering new markets or expanding your product line involves risk. You can mitigate some of these risks by using sales agents and distributors. They are usually paid based on performance, like commissions or purchase agreements. So, your financial risk is lower than for an in-house sales team. This model is based on performance, aligning their interests with your success and encourages them to sell your products.

Focus on core business activities

Outsourcing sales to agents or distributors lets you focus on your core business. These include product development, customer service, and overall strategy. This can lead to better products and services. It can also lead to a stronger position in the market.

Flexibility and scalability

Sales agents and distributors offer flexibility. This can be crucial for growing businesses. They also offer scalability. You can adjust the scale of your sales operations based on market demand and business needs. It avoids the complexities of scaling an in-house team.

Disadvantages of using commercial agents

Some of the downsides of using commercial agents are:

• Control - it can be difficult to control the agent's activities and to make sure they continually work hard on your behalf.
• Sales methods - an agent might not sell your product or service in the way that you would like.
• Customers - they might sell to unsuitable customers who might undermine the integrity of your product.
• Understanding - an agent might not fully understand your product or service and you may be better off with hands-on control.
• Contract - they can be entitled to compensation on termination of the contract even if they breached the agreement.