In recent years there have been a number of legal battles between agents and principals in the greeting card industry. Principals should always seek the advice of a legal specialist in this field and make themselves aware of the regulations involved and their implications before employing an agent.
- Initially you should appoint an agent on a six month probationary period. Both sides should have the right to end the appointment at any time during this period.
- The six month period should be confirmed in writing by both the principal and the agent and a suitable written agreement signed to that effect.
- A rate of commission must be decided. For greeting cards this usually falls between 15% to 20%. You work out the commission at the end of the month and he/she invoices you for that amount.
- All existing accounts on the agent's territory, bar house accounts, (explained later), must be handed over to the to agent on appointment. The agreed rate of commission will apply to all future transactions whether obtained by the agent or not.
- It is important that an annual sales target, split by the month, is agreed by both parties and reviewed annually.
- Commission should be paid to the agent on a monthly basis. Copy invoices of the territory should also be sent on a regular basis.
- Once the six month period is completed, a legally binding agreement must be raised and signed by both. This will be regarded as an indefinite contract unless you stipulate a fixed term.
