Broker and Commission Agent:
Nature of Work:
- Broker: A broker is an intermediary who facilitates transactions between buyers and sellers but does not take possession of the goods. Brokers typically earn a fee or commission for connecting parties and negotiating deals.
- Commission Agent: A commission agent, also known as a consignee, is an intermediary who takes possession of goods on behalf of the seller (principal) and sells them to buyers. They earn a commission on the sales they make.
Ownership of Goods:
- Broker: Brokers do not take ownership or possession of the goods being bought or sold. They act as intermediaries in negotiations.
- Commission Agent: Commission agents take physical possession of the goods and may store, market, or sell them on behalf of the principal.
Risk and Responsibility:
- Broker: Brokers are not responsible for the condition, quality, or delivery of the goods. Their primary responsibility is to facilitate the transaction.
- Commission Agent: Commission agents bear responsibility for the goods in their possession, including their storage, handling, and sale. They may also be liable for any damage or loss.
Payment Structure:
- Broker: Brokers typically earn a fee or commission based on the successful completion of a transaction. They do not share in the profits or losses of the goods.
- Commission Agent: Commission agents earn a commission based on the sale of goods, and their income is directly tied to the performance of the goods in the market.
Examples:
- Broker: Real estate brokers, stockbrokers, and insurance brokers are common examples.
- Commission Agent: Grain commission agents in agriculture, consignment sales agents in retail, and art auction houses are examples of commission agents.
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