Updated: Nov 8, 2022
A Commission Distributor is an example of a distributor within an intra-group with limited responsibilities and exposure to risk.
Unlike the Limited Risk Distributor, the Commission Distributor undertakes fewer operational functions and does not assume ownership of the goods being traded (the Commission Distributor executes contracts on his behalf but on account of another person within a group).
Commission Distributor typically is not involved in any strategic or marketing activities.
Sales are usually not recorded on the books of the Commission Distributor, except for the sales expenses.
As payment for his service, the principal gives him either a proportion of the sales generated or a margin added to the costs incurred. Thus, Commission Distributor's revenue is limited to the sales commission.
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