Other Lines

Other Lines

Other Lines

Consideration must be given to the other lines which an agent is carrying. Generally speaking, it is desirable that he should not represent manufacturers of competing products. However, there may be advantage to be gained if he has an established agency for certain related types of merchandise, because this will indicate that he has the product knowledge and selling skill needed for a particular class of goods and will possess active contacts for the sale of one's own product. The agency Agreement can specify that competing lines shall not be carried by the agent. One can also stipulate the percentage of time to be devoted to one's product by the agent's sales force. However, the danger of too much effort going to the promotion of other lines to the detriment of one's own can be avoided if the business potential for one's product on the assigned territory is sufficiently attractive, if the product itself has a good selling proposition and adequate support is given to the agent's efforts.

In drafting an agency Agreement, there are certain important factors to be considered. The product, or group of products, involved, should be exactly specified. Similarly, there should be a precise definition of the territory which is being assigned. The method by which the agent's remuneration is to be calculated and paid must also be stated clearly, together with some definite procedure for the payment of any additional costs which the agent may incur on behalf of the company, such as those of promotion, research and the investigation and settlement of claims resulting from faulty merchandise or other causes. It is most advisable to limit the period of an initial Agreement with an agency to six months or, at the most, one year.

All agency Agreements should, of course, be vetted by the Company Secretary or some other qualified legal adviser.


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