I am a salesclerk working for a foreign trade company. The company has conducted various training for us but has never been involved in how to calculate cost and profit. Also, the company cut up the links among posts or departments. So, the right to quote and examine the price is all in the hands of several core salespeople. Usually, they only tell the new person to divide the amount by a certain number to quote, but don’t explain the reason. Even if we ask about tax rebates or profits, the manager will say, ” You don’t take commissions anyway that you needn’t know the reason.” Thus, I have worked in a foreign trade company for two years. But, I still don’t know how to calculate the gross profit of the contract. So, please give me a rough idea of how to calculate it.
In some foreign trade companies, bosses may be trying to control business for a long term or keep subordinates from knowing profits. So they let people in each position know only their own things. For example, salesclerks who develop the customer only makes contact with customers, mainly with foreign customers. But finding the right domestic supplier is the mission of another group of people. There are also specific people to do contract execution. If the salesclerk who contacts the client wants to know if the client has paid, he can only confirm it by the finance.
The advantage of doing this is that the operation is professional and efficient, and everyone is familiar with their work. But the staff doesn’t have a comprehensive understanding of the whole process of foreign trade and their contribution. Conversely, in some companies, salesclerks control everything from developing customers to contracting, contract execution, shipping, billing, and collection. In this case, they are clear about how much money they earn, and they have certain control over suppliers and customers. But, in this way, salesclerks are easy to become job-hoppers.
As a matter of fact, calculating the cost and the gross profit is not that difficult. Firstly, after the execution of a contract, the amount received and the amount paid are clear. Then check the customs declaration HS code of the goods, you will know the tax rebate rate. After that, it is easy to calculate the gross profit.
Generally, foreign trade companies can receive two sums of money. One is the payment for goods, which needs to be converted from the foreign exchange into RMB, that is, the actual amount of foreign exchange*exchange rates. And the other is the tax refund, that is, the tax refund is (RMB tax price/1.17)*tax rebate rate.
Foreign trade companies also usually pay two sums of money, that is, the payment for goods and transportation fees paid to the factory.
Therefore, the gross profit of an export contract is the actual amount of foreign exchange received×exchange rate+(tax-included payment to suppliers/1.17)×refund rate-(miscellaneous charges for suppliers and tax-included payment).
In fact, the calculation method of the gross profit or agency fee of the contract is similar. When doing agency contracts and invoicing, I generally provide a detailed calculation list for domestic manufacturers to make them clear to the cost and increase the degree of trust between the two parties.
For foreign trade salesclerks, you must learn to calculate the gross profit so that you can know your bottom line in negotiations.
(+: add/plus; – : minus; *: multiply; /: divide)
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