How does a distributor differ from an agent?

Question

Quizplus · Accepted Answer

A distributor takes title to the merchandise it receives, and bears the risks associated with commercial sales, whereas an agent does not take ownership of the goods and only handles negotiations on behalf of the principal. Option A is incorrect as a royalty payment is customary for a licensee, not an agent or distributor. Option B is incorrect as a distributor typically operates on a wholesale basis and purchases goods to resell, rather than profit-sharing with the principal company. Option D is incorrect as an agent is authorized to act on behalf of the principal to enter into contracts.

How Does a Distributor Differ from an Agent