Planning to engage in import product agency, unclear about the agency fee calculation methods, want to understand the specific operations, industry standards, and differences in calculation for different product categories based on product quantity, cargo value, or profit margin. The best answer introduces three common calculation methods and their applicable scenarios, as well as differences in calculation for different product categories, and also mentions that specific details need to be determined through negotiation between both parties.
What are the differences between agency and export? Let's explore together!
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I plan to do foreign trade business and have a bit of a fuzzy understanding of the concepts of agency and export. I want to know the difference between agency and export. What are the specific differences in terms of process, responsibility, and profit acquisition? I hope those who understand can explain it to me, so I can more clearly choose the method that suits me, in order to carry out subsequent business development.
Trade Expert Insights Answers
There are many differences between agency and export. From a process perspective, export typically involves the enterprise independently completing a series of steps such as goods production, customs declaration, and transportation; while agency export involves entrusting a professional agency company to assist with customs declaration, logistics, and other matters, allowing the enterprise to focus on production.
In terms of responsibility, self-operated export enterprises are fully responsible for the entire export process and must resolve any issues themselves; in agency export, the agency company bears responsibility within the scope of its authorization, such as for customs declaration errors, while the enterprise remains responsible for core issues like product quality.
Regarding profit acquisition, profits from self-operated exports belong to the enterprise itself; in agency exports, the agency company charges an agency fee, and the enterprise obtains the profit after deducting the agency fee. In summary, enterprises should choose based on their own strength, resources, and business plans.
Agency export is more professional in document handling due to the agency company's extensive experience. Self-operated export enterprises need to invest time and effort to learn and master document processing. For example, in preparing documents like customs declarations, agency companies can complete them quickly and accurately.
There are differences in funding. Self-operated export enterprises bear the full financial pressure, such as for raw material procurement and freight payment. In agency exports, some financial pressure can be transferred to the agency company, for instance, the payment terms for agency fees can be negotiated, alleviating the enterprise's cash flow strain.
From the perspective of customer resources, self-operated export facilitates direct control of customers by the enterprise and fosters long-term cooperation. Agency export may limit the enterprise's contact with customers, and customer resources may remain with the agency company. However, reputable agencies will assist enterprises in maintaining customer relationships.
Self-operated export requires a high level of foreign trade talent for enterprises, who need to understand foreign trade rules, foreign languages, etc. Agency export can leverage the professional talent of the agency company, and the enterprise only needs to liaise, reducing talent training costs.
In terms of risk response, self-operated export enterprises face international market risks, such as exchange rate fluctuations, alone. In agency exports, the agency company can provide certain risk warnings and response suggestions, jointly sharing the risks.
In terms of brand promotion, self-operated export facilitates the enterprise in building its own brand image. Under agency export, brand promotion work may require collaboration with the agency company, and the enterprise's brand building autonomy is relatively weaker.
In terms of flexibility, self-operated export enterprises can adjust their export strategies according to their own pace and ideas. Agency export requires communication and coordination with the agency company, and flexibility may be somewhat restricted.
In terms of after-sales service, self-operated export enterprises can directly handle customer after-sales issues. In agency exports, the agency company may act as a communication bridge, and the enterprise's handling of after-sales service may need to be conveyed through the agency company.