How to Accurately Define the Trade Volume of Agency Import?
Resolved
Our company plans to find an agent to conduct import trade and wants to understand how the trade volume of agency import is defined. Is it purely calculated based on the import amount of goods, or should it include agency fees, transportation fees, and various other expenses? In addition, when defining the trade volume, will it be affected by exchange rate fluctuations? We hope that professionals can provide a detailed explanation. Thank you!
Trade Expert Insights Answers
The trade volume of agency imports is usually primarily defined by the CIF (Cost, Insurance, and Freight) price of the goods. The CIF price covers the cost of the goods, the freight to the port of destination, and the insurance during transportation. Agency fees are generally not included in the trade volume; they are remuneration for agency services and are unrelated to the intrinsic value of the goods.
If transportation fees are already included in the CIF price, they do not need to be calculated again. If other price terms, such as FOB (Free On Board), are used, then the freight and insurance costs from the port of loading to the port of destination must be added to determine the trade volume. Exchange rate fluctuations can affect the trade volume, as trade volume is often measured in currency. When the settlement currency differs from the accounting base currency, exchange rate changes can cause the converted trade volume to change. Therefore, when statistically defining and determining the trade volume of agency imports, the exchange rate at the time should be considered.
Generally speaking, the definition of trade volume for agency imports is mainly based on the value of the goods. Additional expenses such as loading and unloading fees and warehousing fees are usually not included unless specifically agreed upon to be part of the trade volume. These expenses are more related to logistics and subsequent handling and are not part of the intrinsic value of the goods.
The definition of trade volume is closely related to trade terms. For example, with EXW (Ex Works), the trade volume is basically the value of goods at the factory, and subsequent transportation, insurance, and other fees are calculated separately. With DAP (Delivered at Place), the trade volume includes all costs to deliver the goods to the designated destination.
The trade volume of agency imports as reported by customs is generally based on the declared dutiable value, which is usually close to the CIF price. When companies calculate their own trade volume to account for profits, they can consider whether to include agency fees based on actual business needs.
Import-related taxes and fees, such as customs duties and value-added tax, are not directly included in the trade volume of agency imports. The trade volume is primarily defined around the goods themselves and related transportation and insurance costs; taxes and fees are separately levied portions.
For some special goods, such as those involving intellectual property fees, if these fees are closely related to the import of the goods and constitute part of the value of the goods, they may need to be included in the trade volume, depending on the actual situation and relevant regulations.
In long-term cooperative agency import businesses, discounts may sometimes be offered. When defining the trade volume, it should be based on the actual payment for the goods and related mandatory expenses; the discounted portion should not be included in the trade volume.
If the goods are damaged during transportation, when defining the trade volume, if the damage is the seller's responsibility, the trade volume may be calculated based on the value of the intact goods. If the buyer bears the loss, the trade volume may need to be adjusted based on the condition of the goods actually received.
In agency import trade, if there are packaging fees, generally if the packaging fee is for the normal packaging of the goods and is included in the price of the goods, it is already included in the trade volume. If it is listed separately and not included in the price of the goods, it depends on the situation whether it is included in the trade volume.