How to pay an Agent?
Post 1 of 14
Hello,
We would like to open an Representative office in China.
I know one person from China, who will deal with finding sources of new suppliers, QC, etc. The only problem I have is how to pay him? On commision from every invoice of is there a different way? If on commision then how much in %?
Thanks for help.
We would like to open an Representative office in China.
I know one person from China, who will deal with finding sources of new suppliers, QC, etc. The only problem I have is how to pay him? On commision from every invoice of is there a different way? If on commision then how much in %?
Thanks for help.
30 Jan 2008 01:02
Post 2 of 14
Replying to [igorko]:
Agent can be paid a % of the order, and either paid in full at the stage when last payment is sent for the goods, B/L is released or 50% at the start and 50% at the end, most agents charge about 3% of the order value.
But you want Q/C on your order too, this depends where the factory is based in China, so travel time and costs and time to spend on the quality control.
The cost of you sending T/T payments to the agent and the agent would loose money to collect the money from the bank too, you need to work it out with your agent, so both parties are happy![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
Agent can be paid a % of the order, and either paid in full at the stage when last payment is sent for the goods, B/L is released or 50% at the start and 50% at the end, most agents charge about 3% of the order value.
But you want Q/C on your order too, this depends where the factory is based in China, so travel time and costs and time to spend on the quality control.
The cost of you sending T/T payments to the agent and the agent would loose money to collect the money from the bank too, you need to work it out with your agent, so both parties are happy
30 Jan 2008 05:16
Post 3 of 14
Replying to [igorko]:
In my opinion , there are several ways to pay :
1. You can give him the salary as he is one of your employee . But the salary will higher .
2.You can give him some commision and the rate usually from 3%-5% of the profit or whole amount .
But it is accordingly . You should chat with your agent !
In my opinion , there are several ways to pay :
1. You can give him the salary as he is one of your employee . But the salary will higher .
2.You can give him some commision and the rate usually from 3%-5% of the profit or whole amount .
But it is accordingly . You should chat with your agent !
01 Feb 2008 01:37
Post 4 of 14
Replying to [igorko]:
If possible try to recruit him/her as your employee, and every month you just pay him monthly salary.
Alternative way would be pay him 3-5% commission for every deal.
All this depends on how much is your business volume, if it's regular/monthly basis, ought for 1st one as it's more cost efficient.
If it's one-off, then just give him the commission.
If possible try to recruit him/her as your employee, and every month you just pay him monthly salary.
Alternative way would be pay him 3-5% commission for every deal.
All this depends on how much is your business volume, if it's regular/monthly basis, ought for 1st one as it's more cost efficient.
If it's one-off, then just give him the commission.
01 Feb 2008 02:09
Post 5 of 14
Replying to [igorko]: Every one can open an account in China to receive foreign currency, including commission, but the amount is no more than USD40,000.00, so don't worry! As for the commission percentage, I don't know, maybe 5%, depending on the service.
01 Feb 2008 02:25
Post 6 of 14
Replying to [igorko]:
Paying a wage to him i feel would not work, pay a wage and % of the order yes, people would not be happy to just have a wage, if they are good at the job, be easy for them to get clients or work for a factory and get wage and % from them.
Unless the wage is high![[em18]](http://img.alibaba.com/images/eng/style/icon/emoticons_deal.gif)
, but this all depends on your business in China, if the orders are small to start, you need to look at the future orders and see if its worth while.
You can pay a smaller % per order and if the quality of the goods are OK once you get them, you can give a quality control bounus, maybe 1-2% more, this makes sure the quality control is done right or he would loose this money.
Great to pay someone 3-5% and the pre-shippment checks are in a factory 1000 miles away, who pays all the travel and hotel costs?
Facts are you need to find the right person and pay them well so you would get the best service, as you would know, will you be the only client for him? will his work load give problems to you business.
Paying a wage to him i feel would not work, pay a wage and % of the order yes, people would not be happy to just have a wage, if they are good at the job, be easy for them to get clients or work for a factory and get wage and % from them.
Unless the wage is high
, but this all depends on your business in China, if the orders are small to start, you need to look at the future orders and see if its worth while.You can pay a smaller % per order and if the quality of the goods are OK once you get them, you can give a quality control bounus, maybe 1-2% more, this makes sure the quality control is done right or he would loose this money.
Great to pay someone 3-5% and the pre-shippment checks are in a factory 1000 miles away, who pays all the travel and hotel costs?
Facts are you need to find the right person and pay them well so you would get the best service, as you would know, will you be the only client for him? will his work load give problems to you business.
01 Feb 2008 19:18
Post 7 of 14
Replying to [igorko]: Dear Igorko, we are a professional consulting company who help foreign companies doing business in China. If you have more questions regarding how to set up a rep office, you can reply to me and leave your email address. We will send you some information.
Back to your question, as an individual (not a company) who you are dealing with on a project basis, you can do the following:
1. As a one time project, you can pay him 3-5% commission based on the total contract value between your company and the local supplier. Plus costs associated with QC process. Get estimated cost quote first from the person. You can pay the person either in RMB or foreign currencies in his onshore or offshore bank accounts if any. However, you should have an agreement to lay out the person's responsibilities including paying his/her own individual income tax in China so that you will not be involved in some money laundry scandals. The agreement will also serve as an evidence of your costs.
2. If you are planning on opening a Rep Office and the person is interested in working for you, you can negotiate a monthly salary with him/her. As a sourcing and QC manager, the current prevailing salary rate is around 5000-12000RMB/month plus other mandatory benefits depending on the person's experience. However, if your 1st project will be finished before the Rep office is set up, you may still need to pay him/her commission. Or you can negotiate with the person to get a start up bonus of which the amount is the same as the 1st month pay. So, the person will be happy to take two month salary home when he/she starts working for you in the Rep Office.
As a long run, you can work with a local sourcing company. In this way, you will not have any overheads since Rep Offices need to pay a lot of taxes once you open one. Plus rent in a A grade office building and staffing costs.
Once your business grow bigger, you can set up a WFOE that can give you more freedom and tax saving approaches for doing business in China.
We hope this is of some help to you.
Back to your question, as an individual (not a company) who you are dealing with on a project basis, you can do the following:
1. As a one time project, you can pay him 3-5% commission based on the total contract value between your company and the local supplier. Plus costs associated with QC process. Get estimated cost quote first from the person. You can pay the person either in RMB or foreign currencies in his onshore or offshore bank accounts if any. However, you should have an agreement to lay out the person's responsibilities including paying his/her own individual income tax in China so that you will not be involved in some money laundry scandals. The agreement will also serve as an evidence of your costs.
2. If you are planning on opening a Rep Office and the person is interested in working for you, you can negotiate a monthly salary with him/her. As a sourcing and QC manager, the current prevailing salary rate is around 5000-12000RMB/month plus other mandatory benefits depending on the person's experience. However, if your 1st project will be finished before the Rep office is set up, you may still need to pay him/her commission. Or you can negotiate with the person to get a start up bonus of which the amount is the same as the 1st month pay. So, the person will be happy to take two month salary home when he/she starts working for you in the Rep Office.
As a long run, you can work with a local sourcing company. In this way, you will not have any overheads since Rep Offices need to pay a lot of taxes once you open one. Plus rent in a A grade office building and staffing costs.
Once your business grow bigger, you can set up a WFOE that can give you more freedom and tax saving approaches for doing business in China.
We hope this is of some help to you.
01 Feb 2008 19:28
Post 8 of 14
Replying to [igorko]:
Heng Associates
Want to do business in China? You might be perplexed by the complexity of numerous Chinese laws, policies and regulations. Not knowing the most reliable source of information on the regulatory environment of doing businesses in China? Email the Heng Associates at hbxiaodou@yahoo.cn or call 13910709925.
We are based in China with good connections in various ministries, commissions and industry associations. Count on us for the more reliable information on China. We are just one Email or call away.
Heng Associates
Want to do business in China? You might be perplexed by the complexity of numerous Chinese laws, policies and regulations. Not knowing the most reliable source of information on the regulatory environment of doing businesses in China? Email the Heng Associates at hbxiaodou@yahoo.cn or call 13910709925.
We are based in China with good connections in various ministries, commissions and industry associations. Count on us for the more reliable information on China. We are just one Email or call away.
02 Feb 2008 01:10
Post 9 of 14
Replying to [igorko]:Agency charges are different according to the services provided by the agent. You only give the specification and the agent give you the supply according to your requirement then his agency services commission is 5%. It will be paid directly to the Agent Bank Account through TT.
02 Feb 2008 05:13
Post 10 of 14
Replying to [igorko]:
Hi igorko :
i read ur question, first i would like to know what kind of business are u in ? then i could answer ur question.Do u need purchase goods from China ?
Hi igorko :
i read ur question, first i would like to know what kind of business are u in ? then i could answer ur question.Do u need purchase goods from China ?
04 Feb 2008 00:08
Post 11 of 14
Replying to [igorko]:
hi igorko :
if you interested in doing business in China. That very easy , if u want to pay for a agent( reglar 3%-5%of the total value) , why not buy from the supplier derectly?Find a professional emplyee for China Market, she/he may give u some good idea . any more questions ,or u might send me a e-mail Amina_kuang@hotmail.com, thanks
hi igorko :
if you interested in doing business in China. That very easy , if u want to pay for a agent( reglar 3%-5%of the total value) , why not buy from the supplier derectly?Find a professional emplyee for China Market, she/he may give u some good idea . any more questions ,or u might send me a e-mail Amina_kuang@hotmail.com, thanks
04 Feb 2008 00:20