An independent or manufacturer′s sales agent is an individual who is a sole proprietor, partner or incorporated entity working in an exclusive geographically designated territory or a particular market/customer segment, representing one or more principals. (The term principal is used to describe the manufacturer or supplier of goods or services sold by the sales agent.)
An agent may represent one or several non-competitive lines. The agent is remunerated primarily on a commission-only basis for goods shipped or billed from the principal represented. Agents control their own time and level of sales effort. The responsibilities and obligations between the agent and principal or company are usually outlined in a written contract between the parties.
It is important to note that agents must maintain an "independent" relationship with the company that has retained them. The agent should not be 'tied' to the company in any way such as a partner, shareholder or board member. Neither should he/she operate under any constraints imposed by the principal such as being directed by the principal as to how much time he should be spending with specific customers or allocating his sales efforts on call reports.
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