Collaboration forms

Collaboration can take many forms in the business sector.

Franchising is a form of collaboration where you set up a company with an existing, well-known trademark and business concept, and a pre-existing functioning organisation. The finished concept is hired out to independent entrepreneurs in return for payment of a fee to the owner of the trademark. The precise form of the collaboration is regulated in an agreement.

Co-branding is also a form of collaboration where two (or sometimes more) companies work together to create advantages in the market for the companies concerned.

If a company intends to sell another party’s products, there are a number of alternative forms of collaboration, such as selling on commission and acting as an agent or retailer. Selling on commission involves a low level of risk for the party which is responsible for the actual sales, as it means that the owner of the products will not receive any payment until a sale has been made. A designer store might sell jewellery from a jewellery designer, who, if the form of collaboration is based on commission, will not receive any payment until the jewellery is sold. The owner of the store receives a percentage of the sales. The person who acts as agent will also take on no great financial risk, as an agent is only a representative of a trademark and does not normally have their own stocks. You could for example be the Swedish or Nordic agent for a particular product or trademark and hold exclusive rights to sell the products in your specific market. The form of collaboration which entails the greatest financial risk for the seller is to be a product retailer. A retailer buys in products and keeps them in stock, which means that if the products do not sell, the retailer will be responsible for the entire cost.

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