Frequently, the agent's authority is limited to soliciting orders in a specific territory, which the exporter alone may accept or reject. Typically, the agent has an ongoing written contractual relationship with the U.S. exporter. A distributor is a third party who buys goods from the U.S. exporter and resells the goods in its own name for its own account. The distributor may have an exclusive right to sell particular products in a particular geographic area. The distributor is typically free to resell the products at the prices which the distributor chooses to establish, and the distributor bears the risk of loss for the products and the risk of non-payment.
Distributors often do advertising and perform product servicing functions.
The relationship is typically in writing. Direct Exporting Without Intermediaries Liaison Offices are usually used for market analysis, market research, and sales promotion purposes. These offices need to be careful not to accept orders or payments, or the U.S. exporter may be deemed to be doing business in the foreign jurisdiction, thereby subjecting it to local legal requirements and taxes. Branch Offices are the simplest to set up, but not all countries permit branches. The assets of the U.S. company, as well as in-country assets, are exposed to claims of creditors and the U.S. company is subject to local legal requirements and taxes.