An agent is a wholesaler (intermediary) who represents buyers or sellers on a relatively permanent basis but does not take ownership of the goods. He is a key player in the distribution chain who performs only certain functions (usually sourcing, negotiating, and brokering) by facilitating transactions between manufacturers and consumers.
Functionally, agents are specialists in negotiation and market information. They work on a commission basis, which is a percentage of sales. Since they do not take ownership of the goods, they do not take on the risks associated with inventory. Agents are especially important in industries where a high level of market expertise is required or when a manufacturer wants to expand its market reach without investing in its own sales teams.
