How to ensure your interest as Middle man
Post 1 of 114
Hi all,
I am new to this forum, My main role is sourcing agent for buyer in Malaysia. Our company incorporated this year and it is a one man band.
I have a question and it has been bothering for long time in the way how to successfully run the business.
Here is the Scenario: I have a client in Malaysia look to import.
I found a good supplier in UK for them. UK supplier quote me a price and I mark it up 10% then quote to my client. Client accpet the price and sample and ready to go ahead. Now, I would like to secure my 10% commission, but how do I protect my interest? As if I disclose the supplier to the buyer, they may bypass me and make a deal themselves. Please note my name or company name will not appear in any Docs like sales contract, L/C, B/L, Commercial invoice and etc. It is only between supplier and end buyer. On top of that I would only make a deal with the supplier so that my commission is gurranted.
Can any pros advise me the process and things need to be aware of.
Thanks in advance and welcome open discussion.
Regards
Vocow.
I am new to this forum, My main role is sourcing agent for buyer in Malaysia. Our company incorporated this year and it is a one man band.
I have a question and it has been bothering for long time in the way how to successfully run the business.
Here is the Scenario: I have a client in Malaysia look to import.
I found a good supplier in UK for them. UK supplier quote me a price and I mark it up 10% then quote to my client. Client accpet the price and sample and ready to go ahead. Now, I would like to secure my 10% commission, but how do I protect my interest? As if I disclose the supplier to the buyer, they may bypass me and make a deal themselves. Please note my name or company name will not appear in any Docs like sales contract, L/C, B/L, Commercial invoice and etc. It is only between supplier and end buyer. On top of that I would only make a deal with the supplier so that my commission is gurranted.
Can any pros advise me the process and things need to be aware of.
Thanks in advance and welcome open discussion.
Regards
Vocow.
14 Mar 2008 03:36
Post 2 of 114
hello.everyone.im a newer here.my company is a garment and shoes supplyer.if anyone of you want any good from china.you can contect me.and also i hope to make friend with all.i hope we can learn from each other.
19 Mar 2008 22:19
Post 3 of 114
Replying to [Katherine Cao]:Don't do that o/wise you will lose your customer.
Just take the help of your bank staff who handle trade finance section and a good freight forwarder.
The bank staff will tell you what kind of LC you should get from the buyer and then what kind of back-to-back LC you should open on the UK seller. Depending on the amount, you might lose 1/2% upwards from your commission to take care of bank charges. It is better to keep secrecy.
A freight forwarder will tell you how to get the shipping documents switched to comply with the end-buyer's LC terms.
Good luck. Don't ask too many questions here because you won't be able to make out any thing unless you have done one transaction youself.
Just take the help of your bank staff who handle trade finance section and a good freight forwarder.
The bank staff will tell you what kind of LC you should get from the buyer and then what kind of back-to-back LC you should open on the UK seller. Depending on the amount, you might lose 1/2% upwards from your commission to take care of bank charges. It is better to keep secrecy.
A freight forwarder will tell you how to get the shipping documents switched to comply with the end-buyer's LC terms.
Good luck. Don't ask too many questions here because you won't be able to make out any thing unless you have done one transaction youself.
20 Mar 2008 04:55
Post 4 of 114
Replying to [Vocow]:
10% for profit margin,oh,very good.
10% for profit margin,oh,very good.
20 Mar 2008 05:45
Post 5 of 114
Replying to [Reliancehk]: Good suggestion.I've really learned a lot of professional experience from this forum and my colleagues. Thank you.![[em10]](http://img.alibaba.com/images/eng/style/icon/emoticons_silly.gif)
![[em16]](http://img.alibaba.com/images/eng/style/icon/emoticons_applause.gif)
20 Mar 2008 20:37
Post 6 of 114
Replying to [Katherine Cao]:
Thanks all for your kind advises.
I can see people offering 2 options here. First is to sign agreement with both end to secure the commission.This is perfect for trading between two countries. however not very practical for triangle trade among three different countries.
Second is using transferrable LC that is designated to gurranttee the interest of the middle person. However, not suitable for small value goods/contract and process takes a bit long.
End of the day, I guess it really comes down to the way you trade and what business you are in
Thanks all for your kind advises.
I can see people offering 2 options here. First is to sign agreement with both end to secure the commission.This is perfect for trading between two countries. however not very practical for triangle trade among three different countries.
Second is using transferrable LC that is designated to gurranttee the interest of the middle person. However, not suitable for small value goods/contract and process takes a bit long.
End of the day, I guess it really comes down to the way you trade and what business you are in
21 Mar 2008 00:27
Post 7 of 114
Replying to [Vocow]:Dear Mr Vocow, I have also same situation like you and lose some customers in middle east. I think the best way you should set up your own trading company and L/C beneficiary is your own company
Vu Tuan - Vietnam
Vu Tuan - Vietnam
21 Mar 2008 02:17
Post 8 of 114
Replying to [Vocow]:you ask the supplier to sign a contract to you that he will mark up the price 10 % and then you should also sign a contract to the supplier for all future dealing with this particular customer, you willl ge 10 %. i.e., you will be an agent for the supplier.
thank you
thank you
21 Mar 2008 05:59
Post 9 of 114
Replying to [Katherine Cao]: Hi Katherine. Thank you for your kind words. At an early age, inexperience and being naive go together. Sometimes you make mistakes but you learn from them and build up experience. What is most important to have faith in your abilities, whilst learning to trust others and be questioning at the same time. It is a difficult balance, but one that could be struck. Have a nice day and thanks once again.
22 Mar 2008 06:23
Post 10 of 114
Replying to [Vocow]:
You are protected if you sign NON-CIRCUMVENTION NON-DISCLOSURE WORKING AGREEMENT (NCNDA) by the Seller, Seller Mandate, Buyer, Buyer Mandate and all the parties invloved. Each party will have one copy which is signed and seal by everyone. This will protect that no one will bypass you. If buyer or seller tresp *, you can lodge a complaint and secure your commission.
Another important document you should get signed from the Paymaster, in your case, the Seller. The document name is International Master Fee Protection Agreement (IMFPA). Make sure this document is endorsed by the Seller's banker with seal. The movement the LC is encashed, the bank has to deposit your agreed commission (which is listed in the IMFPA) in your bank account (your bank mandate will be listed in the IMFPA).
I hope this will help.
Should you need more details, please contact me.
Best regards.
K.J.Haroon Basha
www.haroonbasha.com
You are protected if you sign NON-CIRCUMVENTION NON-DISCLOSURE WORKING AGREEMENT (NCNDA) by the Seller, Seller Mandate, Buyer, Buyer Mandate and all the parties invloved. Each party will have one copy which is signed and seal by everyone. This will protect that no one will bypass you. If buyer or seller tresp *, you can lodge a complaint and secure your commission.
Another important document you should get signed from the Paymaster, in your case, the Seller. The document name is International Master Fee Protection Agreement (IMFPA). Make sure this document is endorsed by the Seller's banker with seal. The movement the LC is encashed, the bank has to deposit your agreed commission (which is listed in the IMFPA) in your bank account (your bank mandate will be listed in the IMFPA).
I hope this will help.
Should you need more details, please contact me.
Best regards.
K.J.Haroon Basha
www.haroonbasha.com
24 Mar 2008 03:56
Post 11 of 114
Replying to [Vocow]: Get an NCNDA in place to begin with. Ultimately very difficult to enforce but it shows the supplier that you are serious and know what you are doing. Ask them for an allocation of funds from their bank. The main thing is to ensure that you bring value to the transaction; so that the supplier has no desire to cicumvent you and also is happy to pay your commission. For example; if the supplier gives you a price, don't just add your commission, get some extra for the supplier too....he will be happy that you are working in his best interests.
26 Mar 2008 05:54