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DISTRIBUTION Why distribution agreements ? Distribution v. direct sales (cross-border or with representative office/establishment) Practical reasons Commercial reasons (eg efficient marketing) Financial reasons (eg less capital) Legal reasons (advantage of a separate entity, etc …) I.a. division of risks and profits, management of stocks, …. But: conflict agency costs … NB. for ‘direct investment’, see Ch. 8 Vice-versa: why do business buyers buy foreign goods or services domestically (from importers, distributors) rather than import them (or buy them directly cross-border)? 精品文档 FORMS OF DISTRIBUTION Forms of distribution (general): Sales representative = employee with an employment contract (receives wage plus commission) Distributorship (??concessionaire??) or dealership*: distributor itself buys and resells; chooses in principle its price for selling; difference of price is his income Franchising: basically a specific form of distributorship, see infra. * the term dealer is normally used for distributors that are retailers (selling to the public), whereas distributors are rather wholesalers. Commercial agency: agent sells or buys in the name of and on behalf of the principal (see infra forms of agency); principal determines the price; income of the agent = commission on sales; manufacturer has more control over agents than over distributors, and is also more liable. Alternative: ?commission agent?? (acts in his own name for the principal) Alternative: platform operator organising P2P contracts (‘sharing economy’) Occasional intermediary 精品文档 FORMS OF DISTRIBUTION National law contains protective rules for distributors (dealers) agents. But sometimes the weaker party is the (small) supplier dealing with big distributors (esp. when the distributor has stipulated exclusivity). As to the protection, there are big differences, e.g. agents are protected in all EU MS, distributors only in some (such as Belgium) Form is relevant also vica
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