Glossary of Trade Terms

Agent

A person or firm authorized by the seller (known as the principal) to enter into binding contracts of sale on the seller's behalf without taking possession of the goods themselves.

Co-marketing

Carried out on the basis of a fee or percentage of sales in order to take advantage of existing distribution networks and a partner’s knowledge of local markets.

Co-production

The joint production of goods in order to optimize the skills and resources of the firms involved as well as to take advantage of economies of scale.

Cross-licensing

Each firm in a partnership licenses its products or services to the other.

Cross-manufacturing

A form of cross-licensing in which companies agree to manufacture each other’s products.

Distributor (importer)

A foreign company that agrees to purchase a Canadian exporter’s product(s) and then takes responsibility for storing, marketing and selling them.

Franchise

A more specific form of licensing in which the franchisee is given the right to use a set of manufacturing or service delivery processes, along with established business systems or trademarks, and to control their use by contractual agreement.

Joint venture

An independent business formed cooperatively by two or more parent firms, often used to avoid restrictions on foreign ownership and for longer-term arrangements that require joint product development, manufacturing, and marketing.

Licensing

The sale of the rights to use a firm’s products or services without releasing control or ownership.

Partnership

An unincorporated business operated by two or more people with a view to profit. Taxed like a sole proprietorship, debt liability risk to the partners is unlimited. In a limited partnership, one or more of the parties participate as a passive partner.

Trading house

A company specializing in the exporting and importing of goods produced or provided by other companies.