Pros and cons of an agency agreement for the provision of services

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Maksudasm
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Joined: Thu Jan 02, 2025 6:37 am

Pros and cons of an agency agreement for the provision of services

Post by Maksudasm »

Let's consider the advantages, characteristics and risks of an agency agreement for the provision of intermediary services for participants.

Benefits for the principal
Let's consider the advantages of an agency agreement for the provision of services for the principal:

The ability to expand business and increase profits by delegating tasks and attracting new clients to the agent. This allows the principal to determine all costs in advance (agency fee).

Eliminate the need to interact chinese thailand data package with end consumers, as this function is performed by the agent.

The ability to delegate non-core work to specialists. For example, entrust the launch of an advertising campaign to a targetologist.

Deferral of income tax. Instead of paying tax immediately after the sale, it is paid upon receipt of the agent's report.

Pros and cons of working in the premium segment

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Benefits for the agent
Let's consider the advantages of an agency agreement for the provision of services for an agent:

No need to invest in purchasing goods, as the products are provided free of charge by the supplier. The agent receives a commission from each sale.

Possibility of reimbursement of all expenses by the customer, if provided for by the contract.

Saving on taxes due to the specifics of agency activities. For example, if the intermediary did not purchase the goods, then the tax is paid only on the percentage earned on the sale. Let's say that the targetologist receives 300 thousand rubles for advertising, of which only 10% is his remuneration, and the rest goes to pay for the advertising space. After the agreement is concluded, the agent pays tax only on his remuneration (in this case - on 30,000 rubles), unlike the situation when deductions are paid from the entire amount that passed through the tax account.

Cooperation under an agency agreement is not without risks for both parties. If the product sold by the agent is not in demand by customers, the principal may suffer losses. For example, a cake manufacturer may face the need to dispose of the product if the agent is unable to sell the goods before the expiration date. If the intermediary were to buy the product, this risk would be minimized.

The agent is also at risk. He may not receive payment for his services if the principal is not satisfied with the quality of the work performed. In addition, the agent has no right to paid vacation and sick leave. There are no deductions to the Social Fund for him. There are also no payments upon termination of cooperation.

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