A company wants to export goods and doesn't know how the international export agency fee is calculated when looking for an agent, fearing being overcharged. The best answer states that there is no unified standard for calculating international export agency fees; common methods include a certain percentage of goods value, per bill of lading, or per service item. Factors like goods value, export volume, destination, trade terms, and type of goods can all affect the fee. When choosing an agent, it's crucial to clarify the charging standards.
Why is Import and Export Agency Difficult? What are the Key Factors?
Resolved
I am planning to get involved in the import and export agency business recently, but I have heard from many people that this industry is difficult to operate. I would like to ask everyone, what are the reasons why import and export agency is difficult? I hope to get some detailed and practical answers so that I can prepare in advance. Thank you all!
Trade Expert Insights Answers
Import and export agency is difficult to operate mainly for the following reasons. Firstly, policies and regulations are complex and ever-changing. Import and export policies, tariff rates, trade control measures, etc. of various countries are constantly adjusted, and companies need to pay constant attention and adapt in a timely manner, otherwise they are prone to face compliance risks. For example, incorrect commodity classification may lead to overpayment or underpayment of tariffs.
Secondly, market competition is fierce. With the development of the industry, many enterprises have entered the market, and services are highly homogenized. It is not easy to stand out among numerous competitors and acquire customer resources.
Furthermore, capital pressure is high. The turnover cycle of import and export business funds is long. From procurement, transportation to delivery, a large amount of funds needs to be advanced. If the capital chain breaks, the business will be affected.
In addition, logistics and transportation risks are difficult to control. During transportation, goods may encounter adverse weather, equipment failure, and other accidents, leading to cargo loss or delayed delivery.
Import and export agency is also difficult to operate because it is hard to build customer trust. Import and export involve large amounts of money, and customers will carefully choose agents. It is difficult for newcomers to gain trust quickly. Moreover, if there are mistakes in the business, such as improper document processing, it is also easy to lose customers.
The instability of the international situation is also a major challenge. Trade frictions, geopolitical conflicts, etc., will make import and export business face many uncertainties. For example, the imposition of tariffs may significantly reduce order profits or even lead to losses.
The shortage of professional talents has a significant impact. Import and export agencies require talents who are familiar with international trade, foreign languages, customs declaration and inspection, and other fields. It is difficult to recruit and retain such composite talents, which affects business development.
Exchange rate fluctuations bring risks. During the settlement process, exchange rate changes may lead to reduced income or increased costs when the agency company exchanges currencies, making it difficult to accurately control profits.
Misunderstanding of trade terms can easily lead to disputes. Under different trade terms, the division of responsibilities and risks between buyers and sellers is different. If the understanding is inaccurate, contradictions are easily generated during contract execution.
The tediousness and error-proneness of document processing. Import and export business involves numerous documents, such as bills of lading, packing lists, commercial invoices, etc. Any error may affect the customs clearance and delivery of goods.
Supplier management is not easy. To ensure the quality and timely supply of goods, effective supplier management is required. However, the situation of suppliers in different regions is complex, and the difficulty of management is high.
After-sales service requirements are high. After the goods are delivered, if there are quality problems, they need to be handled in a timely manner, otherwise it will affect the reputation and subsequent cooperation, increasing the complexity of the business.