Guide

Agent, trader or distributor: who actually sets the price.

These three get used interchangeably and they are not the same thing. The difference decides who owns the goods, who sets the price, who carries the credit risk and who you are really dealing with. Worth ten minutes before you sign with any of them.

This describes how we work and how the common alternatives work. It is a general explanation, not advice on your particular arrangement.

The three models

  • A disclosed agent never owns the goods. They introduce a buyer to a producer, the two contract directly with each other, and the agent is paid a commission by one named side. The buyer pays the producer, not the agent. This is what we are.
  • A trader, or merchant, buys the goods and resells them. They take title, they set the resale price, and their margin is the difference between what they paid and what you pay. That margin is theirs to know and not usually yours.
  • A distributor buys and resells too, but usually holds stock, covers a defined territory, and takes on marketing and often after sales service. Frequently exclusive for that territory.

None of these is dishonest. A trader carrying stock and payment risk is providing a real service and is entitled to be paid for it. The problem is only ever a party presenting as one while operating as another, which is why disclosure matters more than the label.

The questions that tell you which one you are dealing with

  • Who will the invoice come from? If the invoice comes from the intermediary, they own the goods and they are a trader, whatever the website says.
  • Who sets the price? An agent passes on the producer's price. A trader sets their own.
  • Who pays you, and when? The single most revealing question. Ask it directly and expect a direct answer.
  • Are you paid by anybody else on this transaction? A freight forwarder rebate or a certifier referral fee is a second income stream that can quietly shape the advice you are being given.
  • What happens if the buyer does not pay? Whoever answers "that is my problem" is carrying the credit risk. If nobody says it, the producer is carrying it.

What the agent model means for a buyer

You contract with the producer, at the producer's own price, and buying through a disclosed agent costs you no more than approaching that producer directly. There is no margin added on your side. It is reasonable to ask an agent to confirm that in writing, and to be suspicious of one who will not.

What you get in exchange is that somebody has already checked the supplier, knows what documentation they actually hold, and has an interest in the relationship continuing rather than in one transaction closing. An agent paid on repeat business has no reason to put you in front of a supplier who cannot deliver twice.

What it means for a producer

You stay the seller and the exporter of record, you set every price, and you keep the customer relationship. The commission is paid by you, which is the honest part of the arrangement: it is clear whose side the agent is on, because it is written down who pays them.

The terms worth pinning down before you sign anything, with anybody: whether the appointment is exclusive, whether your existing customers are carved out in writing, how long a commission survives after the arrangement ends, and whether the agent is paid when the order ships or when you have actually been paid in cleared funds. Those last two are where most of the disagreements live.

Our own answers to all of that are set out on commission and terms, and if you would rather act than read, you can apply to be represented.

Where we stand on our own answers

We are a disclosed commission agent. We never take title, buyer money never reaches us, the producer sets the price and we add nothing to it, and we are paid by the producer only after an order has shipped and they have been paid in cleared funds. If we were ever offered a fee or rebate by a third party on a transaction, we would have to disclose it and get written consent first.

Related reading: the documents to ask an Australian supplier for, how counter seasonal supply actually works, and a plain guide to Australian honey varieties. All four sit under our guides for importers.

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  • Read by Andrew personally, answered either way, usually within a working day.
  • No cost, and we are never paid by a buyer, so nothing is being sold to you.
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