Text-based exercises. According to world-wide statistics over half of the world’s foreign trade is handled by agents

Agents

According to world-wide statistics over half of the world’s foreign trade is handled by agents. Selling firms turn to commercial agents for their services mostly when they try to develop a new market for their goods in a foreign territory. The agents are instrument in distributing the principals’ product as they know the commercial conditions and changes in the market of their country. They have their own storehouses, showrooms, repair workshops, service stations, etc, for providing after-sales services.

However, sales through agents have certain disadvantages as the Sellers cannot be in direct contact with the market. They also completely depend on the agents’ diligence, efficiency and experience in handling business. Therefore the Sellers always treat the matter of signing up an agent very seriously.

The main provisions included in an agency agreement should clearly define the territory in which the agents are entitled to act, the time of the validity of the agreement, the quantities the agents undertake to sell annually and the agents’ remuneration.

There are basically two types of agency agreements. They are agreements for:

1) merchant firm agents;

2) sales agents.

An agreement for merchant firms stipulates that they become the owners of the goods and can dispose of them at their option. Payment to the Selling (exporting) firms by the merchant firms may be effected by a Letter of Credit, for collection or by other methods.

The agreement states the amount of remuneration to which the merchant firm will be entitled. It may be a certain percentage of the value of the transaction or a sum equivalent to the difference in the prices at which they have purchased the goods from the Sellers and sold to the customers.

A sales agent comes as an intermediary between the principal who sells and the customer who buys. Sales agents may conclude agency agreements on a consignment basis which means that the goods sent on consignment remain the absolute property of the principals until delivered to the Buyers. In many cases the consignment transactions are concluded on a sale or return basis in which case the agents are to dispose of the goods within an agreed and limited period of time. If the agents fail to sell the goods within the stipulated time they are to return the unsold goods to the principals. The liability of either party for return of the goods should be stipulated in the agreement.

Exercise III. Answer the following questions to check your understanding of the text:

1. What goods are often sold through agents?

2. Why are agents’ services so often used in foreign trade?

3. Why do sales through agents have certain disadvantages?

4. What are the main provisions included in an agency agreement?

5. What types of agency agreements do you know?

6. How is the payment to the selling firms effected?

7. Why is it necessary to carry out an extensive advertising campaign when entering a new market?

Exercise IV. Give English equivalents of the following words and word combinations.

Комерційний агент, відкривати новий ринок, станція технічного обслуговування, ремонтна майстерня, бути у прямому контакті з ринком, ефективність, підписувати контракт з агентом, брати зoбов’язання, оговорювати, власник товару, абсолютна власність, лімітований період часу, бути не в змозі продати товар

Exercise V. Study more synonyms to the verbs from the text.

Distribute – administer, allocate, assign, deal, dispose, dispense, divide, give, share.

Handle – manage, supervise, treat, deal with, conduct, control, direct, guide, manipulate.

Exercise VI. Choose and use the verb in the sentences. Translate into Ukrainian:

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