Any dealer can become an agent or distributor of a company with an undertaking with the company that the latter supplies the stocks solely to the former in a specific region or area. It has both merits and demerits as by taking as an agency of any specific company the agent has the sole rights to distribute to the dealers regularly and timely. But he is not supposed to sell the stocks of the competitor of the products or services of that particular company. For this, the agent gets fixed margins because he has to solely concentrate on the distribution and marketing of the company's stocks. His responsibility is also to strengthen the market for that particular product or service.
But the problem with the agency business is that the agents of other areas dump their stocks in this area by giving little discounts to the marketed prices which is popularly called undercutting or underselling in the business parlance. Besides, the agent has to lift the specified stocks regularly and sometimes the agent may be compelled to buy more stocks during the schemes. All companies come out with schemes periodically to give more benefits to the agents. But unfortunately, the agents do not digest the extra profits and on the other hand, they pass on the extra benefits as there is pressure to sell the stocks. Sometimes the agents of other areas may enter this area thereby offloading their stocks. In this process of underselling or undercutting ultimately, the consumers get the stocks at lower prices because in every stage the benefits are passed on to the next stage because of competition.
Although the company prescribes specific margins for the agents to enjoy, the latter rarely enjoy the benefits of margins because of competition.
Share if you care!
“Things You Don’t Know about Professor M. S. Rao” http://professormsraovision2030.blogspot.com/2015/10/things-you-dont-know-about-professor-m.html
Read my ‘Vision 2030 One Million Global Leaders’ URL: http://professormsraovision2030.blogspot.com/2014/12/professor-m-s-raos-vision-2030-one_31.html
Note: I had a brain hemorrhage. I was in bed for five months. My right hand has been numb and paralyzed. I am recovering. Thanks for empathizing with me. With gratitude. https://www.youtube.com/watch?v=BFJrSRLHPUk&ab_channel=ProfessorM.S.Rao
Life is great!
Professor M.S. Rao, Ph.D.
Founder of MSR Leadership Consultants, India
Amazon: http://www.amazon.com/M.-S.-Rao/e/B00MB63BKM
Vision 2030: https://professormsraovision2030.blogspot.com
LinkedIn: https://www.linkedin.com/in/professormsrao
Substack: https://professormsrao.substack.com
X: http://twitter.com/professormsrao
YouTube: https://www.youtube.com/@ProfessorMSRao
Meta: https://www.facebook.com/Professor-MS-Rao-451516514937414
See the Light in You: https://www.amazon.com/See-Light-You-Spiritual-Mindfulness/dp/1949003132
Thanks for reading!
Kindly share your thoughts and comments below, I’m sure someone out there will find your story useful.
Copyright©2025 MSR Leadership Consultants India. All Rights Reserved. Reproduction in whole or in part without permission is prohibited.
This is a nonprofit blog to share Professor M.S. Rao’s passion and vision to build one million students as global leaders by 2030. Please don't cut articles from my blog; redistribute them by email or post them on the web. The use of this material is free provided the copyright is acknowledged and reference or link is made to the Blog http://professormsraovision2030.blogspot.com. This material may not be sold, published in any form, or used in the provision of business services to a third party without permission.
No comments:
Post a Comment