See Also:
Agency Costs
SKU
Lease Term
Logistics Chain
Gross Up

Commercial Agent Definition

Commercial agent is defined as a person who finds customers for a company who has hired the commercial agent. A commercial agent is both a job as well as a business. They find prospective customers for a variety of businesses, from commercial real estate companies to oil pipeline product manufacturers, so commercial agents function as independent salespeople. Commercial agent compensation is usually paid a commission for each product which they have sold.

Commercial Agent Explanation

Explained also as a private salesperson, a commercial agent is useful for many business to business companies which are trying to increase sales. Due to the fact that commercial agent fees are paid on the commission from each sale, they only form a cost after they have created client income. This makes commercial agents very useful: the only time they draw from company finances is when they contribute to them. The method commercial agents operate with ensures that they only increase firm value. There are exceptions to this, however, as with a commercial agent salary, signing fee, or maintenance fee for keeping agents on a project. Still, they often create less of a cost than a salaried salesperson.

Commercial Agent Example

For example, Sayid is a commercial agent who specializes in commercial real estate deals. Rather than spending some of his time completing deals and the associated paperwork, Sayid chooses to focus his efforts on his expertise: finding and selling clients. He has chosen a career where he can maximize his efforts for as long as he can stay productive.
Sayid has recently found a client who wants to purchase several spaces in a strip center to create a large store which sells finely crafted rugs. Sayid wants to make this deal work for all parties. Then he can gain his commission while expanding his reputation.
He needs to do this quickly so that the customer can begin the process of opening their store. The problem with this is that the seller of real estate is taking longer than expected in hopes of finding a higher bid on the property.
Because Sayid is not an employee for the commercial real estate company, he can use methods which may not be available to an employee. Sayid enters the office of the real estate firm and speaks with the CEO of the company. Rather than acting as an employee, Sayid can negotiate on a different level because he is a contractor. He emphasizes that slowing on this deal will reduce his ability to find other buyers, causing total income for the real estate company to decrease. Sayid has more power of persuasion as a performance-based contractor than as an employee who takes salary and commission.
Sayid is able to complete the deal in a way that benefits both vendor and purchaser. He appreciates his position and realizes that he made the correct career decision when he began years ago.