Sales Partners – Agents, Distributors, Licensing and Franchises

When I’m speaking with clients who are looking for ways to expand their business the conversation often comes around to the possibilities of using agents, distributors, licensing arrangements or a franchise.

These sales partners have a lot to offer. But it’s important to understand what each type of partner means for your business (equally so for online enterprises).

The term ‘franchise’ has become a common way of describing a business relationship where the franchisor allows other people to sell their products or operate the same type of business under the same name, usually within a designated area. But there is more to it than that. Much more. Legal obligations, management control, customer service and pricing are involved. And often ‘franchise’ is not the correct term for the relationship being offered.

Let’s Have Some Definitions…
Agent: A representative for your company who will find buyers and sell your products. Paid by commission on sales achieved. Stock is not usually held by an agent.

Distributor: An enterprise whose business is to buy merchandise for resale, usually to retailers or other industrial and commercial users.