Functional Middlemen

 Primary participants can be broadly classified as functional and merchant middlemen. The functional middleman can be categorized as:

(i) Factors: They are middlemen who sell products after the permission of the owner. They have the possession of the goods but can only sell them with the owner’s permission.

Buyer pays to them after the goods are sold along with the commission at a fixed percentage.

(ii) Brokers: Its main idea is to bring the buyer and the seller together. He negotiates and finalizes the contract to commission. They do not acquire the ownership of the products.

If the broker acts on behalf of the buyer, he is called buyil. agent and if he acts on behalf of the seller, he is called selling agent. He gets certain commission for his work from his principal. 

(iii) Commission Agents: They perform transactions of buying and selling for a fixed commission. They negotiate the sale of goods and also take the possession of the goods.

He arranges for the transfer of the titles to the goods. He performs various functions like warehousing, packing, grading etc., but does not bear any risk of loss.

(iv) Del credere Agents: When the commission agents agree to bear the risk of loss in case of credit sales, he is known as del credere agent.

(v) Auctioneer: Conduct auctions to sell goods on behalf of the seller/principal. The date and time of auction is told in advance.

(vi) C&F Agents: Manufacturers sometimes employ carrying and forwarding agents who are known as C&F agents. He supplies stock to the wholesalers or the retailers on behalf of the producer.

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