Wondering if balancing income and expenses is considered re-export trade, stating an understanding that re-export trade is a trade activity conducted between the goods’ producing country and consuming country via a third country, and wanting to know the connection and difference between balancing income and expenses and re-export trade. The best answer indicates that balancing income and expenses does not necessarily fall under re-export trade, as re-export trade has specific procedures, and balancing income and expenses is merely a financial calculation method. The key to determining re-export trade is whether the goods are transshipped through a third country, requiring comprehensive consideration of trade processes and other factors.
How is re-export trade income calculated? Teach me quickly!
Resolved
Our company has just started engaging in re-export trade business and is not very clear about the calculation method for re-export trade income. We want to know if there is a specific formula for calculating re-export trade income. Is it only based on the price difference of reselling goods, or should other factors be considered, such as whether transportation costs and warehousing costs should be deducted? We hope experienced individuals can explain in detail so that we can accurately calculate our company's income from re-export trade.
Trade Expert Insights Answers
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
There is no fixed single formula for calculating re-export trade income. It is usually mainly based on the price difference of reselling goods, but other factors must be comprehensively considered. First, the price difference is the resale price minus the purchase price. However, costs such as transportation and warehousing generally need to be deducted. Assuming a company purchases a batch of goods from Country A for $100 and resells them to Country B for $150, with transportation costs of $10 and warehousing costs of $5, then the re-export trade income is $150 - $100 - $10 - $5 = $35. At the same time, potential costs such as customs duties and insurance fees should also be considered. If financial services are involved, such as letter of credit handling fees, they should also be included in the cost calculation. Only by comprehensively considering these factors can re-export trade income be accurately calculated.
In summary, re-export trade income = resale price - purchase price - all direct costs (transportation, warehousing, customs duties, insurance, financial service fees, etc.).
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
When calculating re-export trade income, transportation and warehousing costs must be considered. For some perishable goods, warehousing requirements are high and costs may be considerable, all of which must be deducted from income. In addition, exchange rate fluctuations must also be monitored, as changes in exchange rates between purchase and resale can affect actual income.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
In addition to costs, you also need to consider whether there are preferential policies such as tax rebates. Some goods in re-export trade may have tax rebates, which can be counted as income. Also, if compensation is incurred due to problems with the quality of goods, it must also be deducted from income.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
When calculating re-export trade income, the party responsible for bearing the expenses as stipulated in the contract is crucial. If transportation fees are agreed to be borne by the buyer, then they do not need to be deducted from income; conversely, they must be deducted.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
Don't forget the cost of capital occupation. During the period from purchasing goods to reselling them, capital is occupied. If there is a loan, the loan interest must be included in the cost, reducing income.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
In re-export trade, inspection and quarantine fees should not be overlooked. This part should be included in the cost, thus affecting the final income calculation.
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
When calculating re-export trade income, if value-added service fees such as packaging replacement are involved, they should also be included in the cost to reasonably calculate the income.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
For long-term re-export trade cooperation, there may be rebates or similar situations, which should be included in the income, and attention should be paid to the contract provisions when calculating.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Re-export trade income must also consider loss costs. For example, if there is a certain loss of goods during transportation and warehousing, and the value decreases, this part must also be deducted from income.