Business Studies – 3.3.3 Place | e-Consult

Agents act as intermediaries who promote and sell a product on behalf of the manufacturer in a foreign market. For the exporting business, advantages include reduced costs (as the agent handles marketing, sales, and distribution), access to local market knowledge and contacts, and lower risk. Disadvantages include less control over pricing and marketing, potential conflicts of interest, and the need to carefully select reliable agents. For the overseas customer, advantages include access to a wider range of products, local support and after-sales service provided by the agent, and potentially easier purchasing processes. Disadvantages include potentially higher prices (as the agent takes a commission), and the customer's reliance on the agent's reputation. The effectiveness of using agents depends heavily on the agent's skills, experience, and the specific market conditions. A well-chosen agent can significantly enhance market penetration and sales, while a poorly chosen agent can hinder success. The agent's knowledge of local regulations and customs procedures is also crucial.