Brokerage Agreement

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Brokerage Agreement

Brokerage Agreement in International Trade

Meaning of Brokerage Agreement, according to the Dictionary of International Trade (Global Negotiator): A type or contract, whereby a person or company acts as a sales agent on behalf of the exporting company (principal), introducing its products to potential buyers in the external market, in exchange for a commission based on the value of the business deals arranged and paid to the principal. As with the distributor, this relationship does not imply a formal interdependence between the principal and the agent intermediary, unless the laws of the country of destination state otherwise. The mechanism of commission agent or intermediary is therefore very useful to companies that are launching their export operations. This type of contract is ideal for small companies with little or no experience in international trade, as it allows them to access international markets without having to make large investments. Everything is left in the hands of the agent. This type of contract is usually called Commission Sales Agreement.

See agent; sales representative.

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