various intermediaries can be broadly classified into two main categories. ) Mercantile Agents ) Merchant Middlemen ( ) Mercantile Agents Mercantile Agents are also called functional middlemen. A businessman appoints a person to buy and sell goods on his behalf and gives him the right to borrow money on the security of goods. He is known as mercantile agent.
He is not given ownership title of the goods. He is paid commission on his turnover. . Kinds of Mercantile Agents or Agent Middlemen i.
Brokers ii. Factors iii Commission Agents iv. Del-credere Agents v. Auctioneers vi.
Warehouse keepers. (i) Brokers A Broker is one who bargains for another and receives commission for his service. He is paid ‘brokerage’ for his services .He brings buyer and the seller to the negotiating process and arranges for finalising contracts between them. The principal businessman does not pass on either possession of goods or the ownership of goods to the broker.
The broker is not personally liable for the contracts concluded. Commerce - - . . PM Clothing, furniture, food, and commodities such as timber and steel are often sold by brokers.
They are assigned to different geographical territories by the producers with whom they work as they have excellent industry contacts .The most common form of agent and broker encountered by the consumers are functioning in real estate sector. A real estate agent acts for both the buyer and the seller. (ii) Factors A factor is a mercantile agent to whom goods are entrusted for sale by a principal. He takes physical possession of the goods, though he does not obtain ownership of the goods.
A factor sells goods in his own name without revealing the name of his principal. He may even sell them on credit and other usual terms. He is entitled to receive payment for the goods sold and he gives valid receipts. He is liable for his action.
He can sue or be sued for his contracts. He has a right of lien on goods in his possession for his unpaid charges. (iii) Commission Agent or Consignees A commission