I am currently working on a deal to export a commodity from Brasil into Russia. I am serving as the middleman. The supplier is now telling me that they want to share the commission on the transaction. 50% for them, 50% for us. Is this customary? Has anyone ever dealt with this before? The way I see it, the supplier is making their money selling the product at the price I negotiated with them. Can I resist or negotiate this detail with the supplier?
Best regards.
Quoting from [fraliafinancialassociates]:I am currently working on a deal to export a commodity from Brasil into Russia. I am serving as the middleman. The supplier is now telling me that they want to share the commission on the transaction. 50% for them, 50% for us. Is this customary? Has anyone ever dealt with this before? The way I see it, the supplier is making their money selling the product at the price I negotiated with them. Can I resist or negotiate this detail with the supplier?
Best regards.
Absolutely NOT normal.... No way do I share a commision with a supplier. I found the buyer, not them, they can either sell me the product/commodity or I can easily find another supplier with the same thing...... Tell them to take a jump from a high bridge!
and NEVER give a supplier the information about your buyers!
Quoting from [fraliafinancialassociates]:I am currently working on a deal to export a commodity from Brasil into Russia. I am serving as the middleman. The supplier is now telling me that they want to share the commission on the transaction. 50% for them, 50% for us. Is this customary? Has anyone ever dealt with this before? The way I see it, the supplier is making their money selling the product at the price I negotiated with them. Can I resist or negotiate this detail with the supplier?
Best regards.
I'd agree with Foow.
Also remember to make sure that the buyer and supplier don't make deals behind your back by making a contract for the both of them. For further info; there's a thread about this in the forum.
I'd advise you to dump the greedy supplier and find another. I don't know which products you are dealing with but it should be easy finding another manufacturer.
Quoting from [fraliafinancialassociates]:I am currently working on a deal to export a commodity from Brasil into Russia. I am serving as the middleman. The supplier is now telling me that they want to share the commission on the transaction. 50% for them, 50% for us. Is this customary? Has anyone ever dealt with this before? The way I see it, the supplier is making their money selling the product at the price I negotiated with them. Can I resist or negotiate this detail with the supplier?
Best regards.
Basically, this is a common problem in Singapore/SEA especially when suspicions or negative feelings arise due to the supplier thinking that you have marked up the item by a large percentage gain. Also, another possibility is that the supplier is banking on the global commodities price increase to squeeze a bit more out of you.
The best solution I see now is to negotiate your commission gains as your middleman required profits or cancel the deal. Since you have the contacts, you are standing on stronger ground to negotiate any deviations to the agreed terms. However, I suggest that you diversify your supplier base to avoid such problems in future.
1) If you are on weaker ground, negotiate to cut your profit losses for this deal and diversify your supplier base ASAP.
2) If you have other suppliers around, threathen to offer the contract to their competitors instead if you hold the selling lead trump card.