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Commercial agency in Vietnam and the UK

Commercial agency in Vietnam and the UK J3kmE

As a company or firm become well-known to the public with their products or services, they would have to extend their reach not only to the market in their origin country, but also in foreign countries as well. Most companies engaged in internal trade make use of agents to represent oversea. Now while staying in your office you can easily enter a contract with a German agent to purchase goods, which are produced by a Singaporean manufacturer, and will be delivered to you by a Swedish transportation company. Globalization has made the world seems to be a smaller place, and this is an opportunity for intermediary business to grow rapidly, affecting the development of local market. The role of commercial agent is well known, they act as independent intermediaries represent their principal in a market, usually foreign market. A commercial agent is defined as “a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the principal), or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Commercial agent is define as: ‘commercial agent’ shall mean a self-employed intermediary who has continuing authority to negotiate the sale or the purchase of goods on behalf of another person, hereinafter called the ‘principal’, or to negotiate and conclude such transactions on behalf of and in the name of that principal. ( Council Directive 86/653/EEC of 18 December 1986). They do not buy products from their principals, but arrange sales directly from their principals to the customer. (Introduction to international English, page 66). Commercial agents are usually paid a commission on sales achieved, are not a party to the sales contract and are not a distributor, the commission calculated as a percentage of the sale of the product to the customer. The number of companies offering goods and services for cross-border trade using third party relationships as a distribution mechanism is growing increasingly. Today the distribution is growing in importance, only good merchandise, are not guarantee of success. The distribution is growing in difficulty, high saturation, fierce competitive markets are restricting the margin of freedom of action. The distribution must be optimized, lighter structures, market-oriented strategies and a favorable spending situation is vital. You can get a high quality distribution with a low cost if the functions of the distribution are outsourced with experts, and that’s where the role of the commercial agent comes into play. The Commercial Agent provides a systematic control of relationship management, something that is vital in ensuring the duration of the company’s contacts. The advantages for customers of working with commercial agents come among others because when working with several companies, they usually carry a wide variety of products from the same sector, so they can handle purchases more rationally with a small number of agents. Clients always have a competent interlocutor who they can contact quickly if problems arise. There are a few differences between the United Kingdom (UK) and Vietnam in terms of definition and function of commercial agent. First, in Vietnam the commercial agent is defined as follow: Commercial agency means a commercial activity whereby the principal and the agent agree that the agent, in its own name, sells or purchases goods for the principal or provides services of the principal to customers for remuneration. (Vietnam Commercial Law 2005). In the UK, the commercial agent only allowed to buys or sells goods on behalf of its principal, this does not mean it will capture an agent who provide services. In Vietnam however, the commercial agents are allowed to provide services to the customers. Next, in the UK it is not a legal requirement to have a written agency agreement in place, although it is often the case that a written agency agreement clarifies the rights, duties and obligations of both agent and principal, which assists in determining the contractual relationship between them, while in Vietnam agency contracts must be made in writing or in other forms of equivalent legal validity. (Article 168, Commercial Law 2005). Finally, according to the UK’s regulation, the commercial agents are allowed to negotiate in the name of the principal but the Regulations are unclear as to what would be captured by the word “negotiate”. There have been suggestions that this would not capture a pure marketing or referral agent who simply promotes the principal's products and refers any orders to the principal for negotiation and conclusion of the order; however this has largely been rejected by the courts. In the case of Vietnam, the commercial agent simply only permissioned to sells or purchases goods for the principal or provides services, not mentioning negotiation on behalf of the principle. After reviewing the few differences between the commercial agent in the UK and Vietnam, now I will mention about the advantages, benefits of commercial agent and why it is so important in international trade. Agents play a vital role in commercial activity. In general, commercial agents perform for more than one business. According to “CDH statistics 2018” agencies represent 4, 9 principals on average. In addition, the importance of foreign businesses has decreased a little bit in the recent years. Currently, nearly about half of the agencies act for at least one foreign business. Many commercial transactions in the field of commerce are conducted through agents who act as intermediaries and represent the interests of their principals in the conduct of the principal business. This is particularly advantageous in the Business to Business (B2B) sector in Germany, in which commercial agents and sales agents play a major role. They broker goods between companies at all levels of the economy – for example, between industry and trade, between industrial companies (e. g. , in the supply sector), or between wholesale and retail, and in almost all sectors. The turnover of goods brokered by commercial agencies in Germany amounts to almost 200 billion euros per year. Another advantage is that commercial agents bring their existing customers along with them. These are of crucial to commercial agents: The customer base is the capital they bring to the business relationship with the companies they represent. This means you won’t likely have to spend a large amount of time and effort to build up your own customer base in a foreign market using your own employees. In sectors in which a line card with the customer is usually required, that the sales agent is known by the customer can be the deciding factor toward overcoming this hurdle and becoming listed. Sales through commercial agents in external market offer many advantages and are a clever and often the better alternative to an in-house sales force. This is particularly true for relatively small companies and for companies that are not yet present in a foreign market. These companies in particular benefit from the market knowledge, customer contacts, cost advantages, additional services, and multiple lines sold by commercial agents. Commercial agency is of importance to Vietnam during the process of international economic intergration. The agencies can help Vietnamese companies to know more about a foreign market even from a far, can help many companies build up a new base of customer with less effort, this also can help reduced many unnecessary fees like marketing, employment… Trade relations with countries around the world will be increasingly consolidated for the benefit of both sides, trade plays a direct role in expanding local import and export activities, establishing and expanding relations. In addition, trade relations contribute to changing the perception of nations of Vietnam and help enhancing, consolidating Vietnam's position.

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small
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Commercial
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 is of importance to Vietnam during the process of international economic Possible spelling mistake found.integration
intergration
. The You use this word too often, consider replacing it withdepartmentfirmcompanybureauoffice
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help
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 with less effort, this also
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This phrase/word (depending on the context) can be potentially replaced with :alleviated
reduced
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 unnecessary fees like marketing, employment… You use this word too often, consider replacing it withcommercetransactiondealbusinessexchangeindustry
Trade
 relations with countries around the world will be increasingly
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trade
You use this word too often, consider replacing it withhitshowdramaperformancecomedymusical
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 relations contribute to changing the perception of nations of Vietnam and You use this word too often, consider replacing it withadviceuseservicesupportcomforthand
help
The verb 'help' is used with an infinitive: "to enhance" or "enhance".to enhanceenhance
enhancing
, consolidating Vietnam's position. 