Differentiate between mercantile agents and merchant middlemen.
Mercantile agents: Such agents are also called functional middlemen. Their work is to operate on behalf of the owners. The functions performed by them are related to purchase and sale and these functions could be of specific nature or general nature. Mercantile agents are the middlemen who perform various functions relating to marketing in the distribution (of goods) process without having the ownership heights.
Such middlemen are divided into five types:—
- One whose duty is to keep the goods of others and sell them further by taking prior permission of the owner,
- Commission agent who acts as an agent on behalf of the owners & sell the goods,
- Del credere agent who sell the goods on credit and assumes the risk of bad debts,
- Auctioneers who sell goods by auction.
- Brokers who bring buyers and sellers under one roof and make negotiations relating to terms and conditions of sale on behalf of either the buyer or the seller.
Merchant Middlemen: Such middlemen enjoy the right of buying and selling goods on their own at a profit. They are the owners of the product and bear the risks of trade relating to functions such as grading, storing, packing etc.
They are of two types:—
- Wholesalers are the merchants who purchase the goods from producers or their agents and sell those goods to the retailers or industrial consumers,
- Retailers are those middlemen who purchase the goods from producers or wholesalers and sell them to the ultimate consumers.
They act as the final link in the distribution channel.