A commission agent develops commercial commissions.
The individual who develops commercial commissions is called a commission agent . A commission , meanwhile, is an instruction or permission given to someone to carry out a commercial operation or perform a certain task . Furthermore, the percentage that the commission agent obtains for each business or sale that is made is called commission.
Commission performance
The commission agent is a person whose job is to carry out commissions. Generally, they charge per completed operation, although sometimes they also have a basic and fixed salary .
Typically, the commission agent receives merchandise on consignment . The consignor or principal is the one who delivers the goods to the consignee (the commission agent), who must sell them on his behalf and accepting the established conditions.
The client , in this framework, has the obligation to pay the corresponding expenses and commission, while having the right to cancel the commission (that is, the order) whenever he wishes. The commission agent, for his part, has to safeguard the merchandise he receives, be accountable and respond to any possible damages and losses generated by non-compliance with his work.
Commission agents, in short, make sales on behalf of someone else and charge a percentage for that action . Suppose that a commission agent is dedicated to selling the clothing produced by a company at home, obtaining a 20% commission for each operation. If this commission agent adds sales of 20,000 pesos in a month , he will receive a commission of 4,000 pesos , paid by the company that acts as consignor or client since it delivers the merchandise.
Commission contract
The commercial commission contract is a legal agreement between two parties, known as the principal and the commission agent, in which the commission agent undertakes to carry out certain commercial procedures in the name and representation of the principal in exchange for a previously agreed commission or remuneration.
The activities carried out by the commission agent may vary according to what is agreed in the contract, but generally may include sales, purchases, distribution of products, promotion and representation at trade fairs, among others. In some countries, legislation may require it to be registered with a competent authority or established in writing to be legally valid.
Some important characteristics of the commercial commission contract , focusing on the commission agent, are the following:
- representation : acts on behalf of the principal, as his agent;
- independence : maintains its independence and does not establish an employment relationship with the client;
- Remuneration : Receives a commission or agreed remuneration for commercial efforts carried out on behalf of the client. For example, it can be a percentage of the value of the completed operations;
- Risk : assumes the risk in the development of the commercial operations in charge. This means that if a sale is not closed or the operation does not come to fruition, you do not receive remuneration.
Agency contract: differences
The commission contract and the agency contract are two types of commercial contracts that involve the representation of one party (principal or principal) by another (commissioner or agent ). Although they share certain similarities, they also present important differences in the nature of the relationship and the responsibilities of the parties involved.
Given the characteristics of the commission contract, explained in the previous section, let's look at the main differences with the agency contract:
The commercial commission contract does not link the commission agent with the principal at the labor level.
- legal representation – The agent legally represents the principal (principal) and has the authority to act on his or her behalf. Has the ability to enter into contracts and commercial operations on behalf of the principal, assuming direct legal responsibility towards third parties;
- Risks and responsibilities : The agent may assume financial risks as it acts on behalf of the principal and may be bound by contracts and agreements entered into with third parties. Therefore, you may face legal liability for your actions and omissions in the performance of your duties as an agent;
- Independence – The agent may be more integrated into the principal's business structure and, in some cases, may act as a permanent or exclusive representative of the principal in a certain geographic area or market.