Difference between distributor and agent

When people discuss export sales, they often have to think about what type of legal entity to have abroad. Should you have an office, a distributor or a sales agent?

But what is the difference between distributor and agent?

The Distributor

A distributor sells a supplier’s products to their customers. The distributor assumes liability for the products so it can be a very high risk for them. Moreover, the contract of the sale is only between the customer and the distributor. The distributor isn’t permitted to create a contract between the supplier and customer. Therefore, any deal a distributor makes with a customer is short-lived.

The Agent

A sales agent is employed by a company with the task to negotiate and sell goods on their behalf. An agent acts as a medium between a supplier and a distributor and has the authority to sell products in the name of the supplier. They tend to create contracts directly for the supplier with whom they work.

In a nutshell, an agent is a person who acts on behalf of another person, group or organization.

Source: Oxford English Dictionary