In general, the company requires 1.5% to 3% of the agency fee for the agency business. But the reality is more complex. Some businesses are small, such as sample delivery, only 500 to 1000 US dollars. So, and the 3% agency fee is too low. Some order amounts are relatively large, such as $3 million, and customers will always ask for lower agent fees. How to determine the reasonable foreign trade agency under normal circumstances?
The pure agency rate is generally between 1% and 3%, depending on the actual situation. The level of agency fees varies according to the actual services provided, the complexity of the operation, whether there are advances in tax refunds and the amount of the agency contract. There is no absolute comparability.
For example, a foreign trade company basically signs an agency contract at a 1.5% agency rate. After delivery, it will receive the foreign exchange and a VAT invoice from the manufacturer, and make a partial refund. This agency fee is to deduct the interest on the refund, so the actual agency fee was less than 1.5%.
If the agency rate is low, such as 0.9%, some foreign trade companies will not pay the tax refund. They will run the tax refund formalities and pay the tax refund to the manufacturer after receiving it.
If the manufacturer and a foreign trade company have a large number of businesses, maybe a total of 1 million to 5 million dollars in the whole year, there are several possibilities. One is to follow a fixed agency rate, such as 1.5%. The second is to follow in principle 1.5%. However, for orders with a small amount, each charge is at least 500 yuan. The third is to determine the agent rate, such as 1.5%. However, the total amount for one year is RMB 300,000. After the fee has accumulated to 300,000 yuan, no fee will be charged. Also, some companies will pay a total of 300,000 yuan in agency fees regardless of the actual amount of export. And they will agree to settle once or several times in a certain period.
There are also some changes in practice. If the agency fee rate is high, the foreign trade company will be more generous. Express fee, certificate of origin fee, etc., are included in the agency fee. If the agency fee is low, the foreign trade company may be more realistic. Any advance fee, such as a certificate of origin and courier fees, is to be taken by the factory or the client. If the document requirements are high, like L/C operation, the agency may charge some additional fees.
Some import agents sometimes ask foreign trade companies issue certificates and bear some risks. They generally ask the client to pay some extra fees or increase the agency rate. In some case, that agency fee is relatively high. For example, within the group, the business of all subsidiaries must be exported through the parent company’s foreign trade agency. Foreign trade companies not only undertake the function of agency service but take the function of management supervision and assessment. Of course, the agency fee is higher, even exceeding 5%. Or the factory does not understand foreign trade. It needs the help of the foreign trade company or directly participates in many works. The workload of foreign trade companies is large, so the agency fee should be higher.
The agency fee rate and price calculation method of an agency contract are more complex in practice, many of which have to be decided by both sides.
Please check our website to see all the blogs. www.extripod.com
Or Visit our Alibaba Website www.extripod.cn
1. Is There Any Room for Newcomers in Foreign Trade?
2. What Kind of Employees Do Foreign Trade Enterprises Prefer?
3. How Do Newcomers Choose the Right Firm?
4. How Do Novices Prepare for Interviews?
5. How to Choose the Right Foreign Trade Position?
6. Are Girls Suitable for Foreign Trade Sales?
7. Do Exports of Traditional Industries Have Development Space?
8. Is Foreign Trade Newcomer’s Income Generally Low?
9. How to Adapt to Foreign Trade Posts Asap?
10. How to Improve English Ability in the Short Term?
11. How Can Newcomers Better Communicate with the Leaders?
12. How to Get the Client’s Trust in the Short Term?
13. What Should I Do if I Have A Dispute with the Client?
14. How to Adjust Attitudes When Meeting Differences in Company?
15. How to Communicate with Foreign Customers?
16. What Should I Do if the Company is Filled with Intrigue?
17. What Reference Books Should Foreign Trade Newcomers Read?
18. How to Make Yourself Look More Professional?
19. How to Adjust Mentality When You Switch to Foreign Trade?
20. How Does the Salesclerk Calculate the Gross Profit?
21. How to Calculate the Export Tax Rebate?
22. How do Newcomers Develop Market Based on its Features?
23. How to Calculate the Export Cost Price?
24. How to Fill in the Vendor Registration Form?
25. What is the Format of A Letter of Authority?
26. How to Attract Potential Customers in the Exhibition?
27. The Main Features of Reverse Auction and the Skills to Attend It
28. The Experience of Attending A Reverse Auction
29. Why Don’t Place Orders for Good Price and Products?
30. What if Customers Require Not to Supply to Its Competitors?
31. Can You Really Buy Real Buyer Information?
32. How to Make A Standardized Quotation?
33. How to Prepare for Customers to Visit Our Factory?
34. How Should We Arrange for the Visit of Executive Clients?
35. How to Prepare for the Quality Inspection?
36. What Should Be Noted When Eating Food with Customers?
37. How to Work as A Good Banquet Translator?
38. How to Reasonably Arrange the Time When Customers Visit?
39. How to Prepare for Visiting Clients Abroad?
40. How to Make the Minutes of the Meeting?
41. What If Clients Propose to Sign Exclusive Sales Agreements?
42. Is the Cost of the Hotel Paid by Customers or Us When Visiting?
43. Can Subcontractor Warranty be Provided to End-users?
44. What If the Customer Suddenly Does Not Want the Goods?
45. Suppliers Lost Chances for Backing Up on the Highway
46. How to Maximize Profit through Reasonable Price Strategy
47. How Should Foreign Trade Companies Find their Position?
48. How Do Foreign Trade Companies Choose Export Suppliers?
49. How to Enhance the Control and Influence over Suppliers?
50. Is It Proper to Let Clients Ask Manufacturers to Solve Problems?
51. How to Agent Domestic Factories to Export Their Products?
52. Which Way to Pay the Agency Fee is better?
53. Why Do You Have to Know about Products, Suppliers, Clients?
54. The Process and Cost Calculation of Agent Import Business
55. How to Straighten Out Relationships in the Agency Contract?
56. How Do We Show That We Need An Agent in the Contract?
57. How to Do Good Jobs of Agency Import Agreement Service?
58. How to Determine A Reasonable Agency Fee?
59. Is the Agency Business with Low Agency Fees Worth Doing?
60. Why Do Manufacturers with Foreign Trade Rights Want Agents?
61. How to Use Foreign Trade Company to Open Overseas Market?
62. What are the Difficulties in Collecting Money by Letter of Credit?
63. If Supply Cycle is Long, How to Control the Risk of Quotation?
64. What if Tax Rebate Policy Cause Prices Lower Than Costs?
65. Tips for Paying Commissions to Foreign Middlemen or Agents
66. Why Use Written Documents for Business Contacts?
67. How to Control the Risk of Export Quotes?
68. How to Trade in the Middle East While Controlling Risks?
69. How to Offer the CIF Price to Products with Long Supply Cycle?
70. The Main Situation of Foreign Trade Fraud
71. How to Handle Costs of Repacking Goods at Destination Port?
72. What If the Qualified Products Aren’t Enough to the Contract?
73. How to Handle the Return or Repair of Exported Goods?
74. What Should I Do with Insubstantial Complaints from Clients?
75. How to Handle Disputes in the Agent Export Contract?
76. What If Clients Ask Us to Replenish or Repair Products?
77. What if Clients Demand Compensation for Packing Damage?
78. Parts of Previous Goods Rusted, Clients Ask to Replenish Freely
79. Who Should Bear Import Tariff and VAT for Free Replenishment?
80. What If the Goods Deformed the Container Before Shipment?
81. What If Customers Threaten to Punish Us for Quality Problems?
82. Why Do Customers Never Feed Back on Our Quality?
83. What If Customers Ask Compensation for Damaged Products?
84. What If the Forwarder Delay Delivery, Bringing Extra Costs?
85. What If Customers Have Placed Orders with Wrong Quotes?