Rebate Commission?

In this world of give and take, a world of pseudo barter system, no transaction, be it monetary or otherwise goes ahead without inner motive. Similarly, as proof for the above statement, there is now a new phase introduced to a monetary transaction wherein the broker pays the buyer of the commodity a commission, called a commission rebates. That is, the broker parts with a small part of his commission, obtained from the seller for the completion of the transaction, to the buyer. Gone are the days when all a seller had to do was look for a broker and the broker did all of the dirty work.


Now, by offering to pay the buyer a part of his commission, he no longer has to go a looking and also has a longer list of buyers to choose from. However, this in turn results in a not-so-fair mode of transaction since the broker is obviously going to go along with the buyer asking for the least commission and thus increase his own profit margin. It also is not ethical since the middleman is now being benefited from both parties, the seller has to part with a sum to the broker for getting a suitable seller and the buyer, though he gets a commission, will be paying extra to the seller so that the broker gets more commission from the seller which he will later part with to the buyer himself. On one hand it does make the process of commodity accumulation and money transaction easier, however, on the other hand, there is the case wherein the consumers can drive prices higher and increase competition in a market of high demand.

This will in turn become a money friendly market and not much of a user friendly market which in turn will result in demand supply imbalance. Already, the selling prices of commodities are up since the seller has to give away a part of it as commission and now it increases even more because of the commission rebates. This increase in selling price will create a ruckus among st consumers who have a tight range of monetary budget and will eventually end in a decline in demand for the same. To prevent all these, some countries have banned the practice of commission rebates and most of the countries have strict rules and regulations which need to be followed in case of a commission rebates, not following which will lead to serious legal actions.

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Therefore, it is wise to say that buying and selling of commodities is better done with no middle men and an open policy between buyers and sellers which will lead to a cleaner transaction and both seller and customer satisfaction sans both the need for commission and the commission rebates. This will also result in a stable market.

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