1. The legal relationship between the issuer and the securities company is different. Underwriting essentially belongs to the buying and selling relationship of stocks, while consignment belongs to the principal-agent relationship.
2. The risks undertaken by securities companies are different: in underwriting mode, if the securities company fails to sell all the securities within the agreed period of validity, the rest needs to be purchased by the securities company itself, which is risky, while in consignment mode, if the securities company fails to sell all the securities within the agreed time, the rest can be returned to the issuer without any risk to the securities company.
3. Different commissions: The underwriting commission of securities companies will be relatively high, because the underwriting mode is risky. Relatively speaking, the underwriting commission of securities companies under the consignment mode will be relatively less, because they do not bear risks.
Underwriting, also known as exclusive distribution, refers to a trade method in which a supplier grants the right to operate a certain commodity or a certain type of commodity to a foreign underwriter in a certain region and within a certain period through an underwriting agreement. In other words, the underwriter enjoys the exclusive franchise right to the designated goods within the time limit and territory stipulated in the agreement.
The exclusive sales agreement itself is not a sales contract. It stipulates the rights and obligations of both parties and the general trading conditions. Its main contents are as follows:
The basic relationship between the two sides. Make it clear that the relationship between exporters and underwriters is a buying and selling relationship. Underwriters should buy out the goods with their own funds and sell them at their own expense.
Goods, regions and time limit for underwriting. The agreement shall specify the type or model of the insured goods and have the right to operate the insurer.
According to the exporter's marketing intention, the underwriter's sales ability and the promised sales quantity, these are all agreed by both parties. The underwriting period is the validity period of the underwriting agreement, which is generally one to two years, but also indefinite, with only the suspension clause or renewal clause.
Franchise right. Franchising includes exclusive right and exclusive right. The former means that the exporter promises not to sell the goods to other customers in the underwriting area within the validity period of the agreement. The latter means that the underwriter promises to buy goods only from the agreed exporters, and shall not buy similar goods or competitive substitute goods from third parties. Among them, the exclusive right is an indispensable part of the exclusive distribution agreement and the main condition that distinguishes it from the exclusive distribution agreement.
The minimum quantity or amount of insured goods, that is, the minimum amount that the insurer must insure from the exporter within the time limit stipulated in the agreement. Some underwriting agreements do not stipulate this.
The price and general terms of trade of the underwritten goods. The price of the insured goods can be agreed at one time or according to the market situation when concluding a sales contract. General trade terms refer to the terms applicable to each transaction during the agreement period, such as payment terms, inspection claims, insurance, force majeure, etc., which can be agreed in the underwriting agreement to simplify the contents of future sales contracts.
What is the principle?
(1) Dealers with high loyalty and strong promotion ability must be selected. For high-end products, we must focus on choosing dealers who can cooperate with the company's promotion and brand planning programs and have a good terminal image. For low-priced products, you can choose dealers with smooth and extensive wholesale network, strong distribution ability and market impact ability;
(2) The types of products to be underwritten must be determined by observing and analyzing the historical sales records of dealers-which dealers are particularly suitable for promoting which types, grades and market segments of products must have detailed data analysis, and at the same time, capital, region and product characteristics should be considered;
(3) Underwriting products generally have higher profits, which can give dealers great enthusiasm for sales, so manufacturers can give dealers certain sales pressure according to this heart-that is, promise to sell in stages to ensure their sales and profits.