Mercantile agent

Mercantile agent
See also
Sole distributor Local agent Trade house Sub broker Agency Broker Sales agent Placement fee Sole agent Reinsurance broker

Mercantile agent is the special agent, who in the normal course of its business has the right to sell goods, to send goods for sale, to buy goods or to collect money to secure goods on behalf of its client. To make the definition clearer – the mercantile agent is a person who has been received some goods or documents of title in the capacity of mercantile agent (not in any other private capacity). However that words do not define all the meanings of mercantille agent.

Duties of mercantile agent

Some of the main duties of a Mercantile agent include:

• Negotiating deals with buyers and sellers: A Mercantile agent will work to negotiate the best possible terms and prices for the merchant they represent. They may also assist in negotiating contracts, such as terms of payment and delivery, as well as any other conditions related to the sale.
• Identifying potential buyers and sellers: A Mercantile agent will work to identify potential buyers and sellers who may be interested in the goods or services the merchant is offering. They may also research the market to identify potential new customers and suppliers.
• Transporting goods and services: A Mercantile agent will arrange for the transport of goods and services from the seller to the buyer. This includes ensuring that the goods and services are delivered on time and to the buyer's satisfaction.

Example of Mercantile agent

Mercantile Agency Services Inc. is a Canadian-based Mercantile agency specializing in the buying and selling of commodities and services. Their team of experienced and knowledgeable agents work to negotiate deals with buyers and sellers, identify potential buyers and sellers, and arrange for the transport of goods and services. They also provide market research and financial advice to the merchants they represent. They are committed to providing the best possible service for their clients, ensuring that the goods and services are delivered on time and to the highest standards.

Mercantile agents can be used in a variety of industries, such as manufacturing, trade, transportation, and logistics. They can help merchants to find buyers and sellers, negotiate prices and terms, execute contracts, and arrange for the transport of goods and services. They can also help to provide market research, financial advice, and other services that the merchant may need. Mercantile agents can be a valuable resource for merchants that are looking to expand their business and increase their profits.

Types of mercantile agents

List below presents a different types of the mercantile agents.

• Factors

The perfect example for other meanings of mercantile agent is a factor. The factor belongs to wider definition of a general mercantile agent. He is employed to sell goods on behalf of his principal. In conditions that are adjusted for him he does not have control from anyone in selling goods. Due to that fact he has a wide authority and also freedom in selling products under such conditions as he deems appropriate. Of course he has many functions on behalf of his employer such as receiving the delivery of products or receiving the price for the goods he sold.

• Brokers

The broker is a special type of the mercantile agent. He is someone who actually acts like a middleman between the seller and the buyer. So his role is different than normal mercantille agent, because he has to create a cantractual relationship between the seller and the buyer for the purchase or for the sale of products, securities, shares, properties etc. His works ends when the transaction is completed. Broker usually acts on behalf of the buyer as well as the seller. To sum up, the broker :

• provides connection between the buyer who wants to purchase some specific goods and the seller who wants to sell the same,
• prepares the sales and the bought notes and sends those to the buyer and to the seller (when the two sides agree with each other the terms of cantract are finalised),
• gets a reward for his work (commission).

Therefore, his main duty is to check the terms of contract between principal and the third parties.

• Auctioneers

The auctioneer is a type of mercantile agent who is resposible for selling goods during the auction on behalf of the principal (seller). An auction sales is a public sales of products, the participants of that are some buyers and only one seller. The auctioneer is kind of a licitation leader. During the auction the auctioneer is primarily the seller's agent, but after the licitation he becomes the purchaser's (winner of the licitation) agent. Last, but not least - the auctioneer has no rights to sell goods of his client by private contract. For his work as well as broker he gets a reward (commission).

• Commission agents

Usually the commission agent is responsible for the sale or purchase of goods on behalf of his client. Such mercantile agent belongs to an undefined class of agents. He tries to acquire buyers for sellers of products and also sellers for the buyers of goods. As well as brokers or auctioneers he receives a commission in return for his work. Those agents are very important when products are going to be purchased from distant markets.

• Forwarding agents

The forwarding agent grants the service of collecting products from his customers and sending them to forwarding (shipping) companies. Due to the fact that the foreign trade procedures are more complicated than the domestic trade procedures, those agents services help producers as well as exporters to a large extent.

Advantages of Mercantile agent

The advantages of using a Mercantile agent include:

• Access to local market knowledge: Mercantile agents have local market knowledge, which can be invaluable in helping merchants identify potential buyers and sellers, set prices, and negotiate terms.
• Reduction of transport costs: Mercantile agents can help merchants reduce transport costs by negotiating better rates and ensuring that goods and services are delivered on time.
• Financial advice: Mercantile agents can provide merchants with financial advice and market research, which can be invaluable in helping them make informed decisions.

Limitations of Mercantile agent

Mercantile agents are subject to certain limitations that can affect their ability to successfully complete their duties. These limitations include:

• Legal restrictions: Mercantile agents must adhere to all applicable laws and regulations in the jurisdiction in which they are operating. This includes any laws or regulations related to the buying, selling, and transporting of goods and services.
• Financial constraints: Mercantile agents may be limited in the amount of money they can spend on behalf of their merchant. This can limit their ability to negotiate favorable terms, or to purchase goods or services at a competitive price.
• Time constraints: Mercantile agents may have limited time to complete their tasks. This can limit their ability to research potential buyers and sellers, negotiate terms, or arrange for the transport of goods and services.

Other approaches related to Mercantile agent

• Providing financial advice: A Mercantile agent will provide financial advice to the merchant they represent. This can include advice on how to best manage their finances and make the most of their profits.
• Developing marketing plans: A Mercantile agent will work to develop marketing plans for the merchant they represent. This can include creating promotional materials, developing advertising campaigns, and researching potential new markets.
• Performing market research: A Mercantile agent will conduct market research to identify potential buyers and sellers, and also to assess the market for potential new products or services.

References

• Clarke, M., & Hooley, R., & Munday, R., & Sealy, L., & Tettenborn, A., & Turner, P. (2017). Commercial Law: Text, Cases, and Materials. 394-404.
• Deshpande, A., & Geet, S. (2014) Legal aspects of business. 321-324.
• Noonan, C. (2010). Sales Management.

Author: Paweł Łącki