One of the simplest yet highly rewarding options for international trading company owners is to become an import export agent. This is based on an inherent market need and is almost always guaranteed to succeed. Manufacturers depend on such agents to make their profits as oftentimes they have no experience dealing with end users. But what is an import export agent? What does an import agent do? What advantages do they enjoy on the international trade scene? How can you become one and earn a commission?
Export Import Agent Definition
An import export agent is a middleman or intermediary between a product’s manufacturer and resellers or even consumers in the international market scene. He bridges the gap between these two parties and effectively makes smooth business transactions between countries. Most of them work on commission basis, bringing the two interested parties together and facilitating their transaction.
Types of Agents
- General or Traditional Agents
These ones carry out transactions on behalf of their principals. They usually hold all the cards that connect the principal to a third party. In international trade, such agents might represent the interests of a supplier or even a reseller in a foreign market.
Brokers are independent agents who normally work on one-off deals instead of representing a company. International trade brokers locate business opportunities for exporters and make their commission based on the volume of trade. There are two kinds of import export brokers:
- Merchandise Broker
This kind of broker negotiates suitable terms between a buyer and seller and facilitates product purchase. Unlike agents, these brokers have no control over the product in question as it is sent directly to the buyer.
- Customs Broker
This is an individual or company that holds a customs broker license for purposes of entering and clearing goods from overseas markets. An import customs broker is also referred to as a customs agent or customs clearance agent.
How to Become an Import Export Agent
Import export agents work on both sides of the spectrum with importers and exporters, suppliers and buyers, facilitating their transactions. But in order to effectively provide these bridging services, you need to prepare in advance and chart out a strategy. Here are a few pointers to get you started:
- Conduct Market Research
You need to understand the product in which you wish to trade as well as its target consumers. Think about where you will source the products and how far they will need to travel to get to the customer. Additionally, it would be wise to think about whether you will sell directly to the customer or work through distributors. Dig up as much data as you can on these matters in order to get your footing right before setting out.
- Find Contacts
You need to build a network of suppliers and buyers. You might want to start from embassies, getting a list of importers and exporters. It might also be wise to visit the Chambers of Commerce in the countries where you want to do business to get manufacturers, distributors and other useful contacts.
- Check Reputation
Not all of the contacts you get will be good or straightforward so you need to assess them to establish their reputation. You might want to do this using an online search and also talking to those who have worked with them in the past. Find out the financial status of the companies and how long they have been in operation before initiating contact.
- Introduce Your Company
Send an introduction letter or email to every company on your shortlist. Introduce your company well and explain your interest in facilitating their connection to clients of manufacturers. Demonstrate the benefits that you have to offer them and provide accurate contact details. Remember to follow up at least a week after sending the introduction.
- Negotiate an Agreement
This may call for a face-to-face meeting with willing partners so as to officially start the partnership. Negotiate on the terms offered and reach a suitable middle ground that suits all parties involved. Do not leave anything to chance as this may lead to friction in future.
- Choose a Transport Structure
Find a reliable transportation framework to connect the two ends of the equation. This will most likely be a freight forwarder. You need to be careful in choosing a trustworthy forwarder. You could get referrals from fellow agents or traders. Negotiate for convenient terms with them as well.
- Price Products Properly
This is the most important point as earning a commission depends on proper pricing. Make sure that all expenses are covered including packaging, insurance and freight charges. Add the commission value and expenses to the manufacturer’s price and set the final price.
How to Earn an Import Export Broker Commission
The methods via which import export agents make money depend on the avenues they choose to execute trade. The commission will also vary depending on the nature of the product, profit margins per item and transaction volume.
- Consultation Fees
Some new international trading companies would like to work directly with consumers but have no clue where to start. They at times seek the services of an agent to help them get started. Agents normally charge a fee for the consultation and provide them with the information they seek. Be sure to establish a good rapport with such companies as they sometimes choose instead to work through an agent if they are impressed by services offered.
- Sales Commissions
This is the most common way for import export brokers to make a commission. The rate will depend on your negotiation skills, experience and the company you are dealing with. 10% to 15% range is just a benchmark and is the most common range within which most agents operate.
- Broker Commissions
These ones differ from sales commissions in that they are mostly one-off deals. They involve bringing a customer and seller together for a one-time purchase and getting a pre-specified cut of the pie. At times, companies enlist the services of a commission agent for export when they have excess inventory of some products that are going to be discontinued. The broker looks for an interested buyer, seals the deal and gets his commission.
- Customer Representation at Events
International trade companies are not always available to attend trade fairs and exhibitions abroad. They might choose to forfeit attendance to save costs and instead send an agent to represent them at the event. This mostly works when the event is held in your home country and a cost benefit analysis makes it seem worthwhile. The commission for such a service is entirely negotiable as there are no pre-determined market rates.
- Referral Commissions
As a commission agent for export you might at times chance upon information that could benefit another agent or a supplier but happens to be outside your scope. Instead of sitting on such information or giving it away for free, agents instead charge a fee that is dependent on the success of the deal in question.
You might for instance not be involved in the automobile industry but happen to meet an interested client. By connecting them with a supplier or agent in your circle, you will earn a commission from the said supplier or agent when the client makes a purchase.
- Storage Facility or Shipping Commissions
As you become established in international trade, you will find more ways to make commissions. With an established network of suppliers, freight forwarders, shippers and others, the opportunities to make money are limitless. As an agent, every service you offer can attract a commission. So make money from connecting suppliers to shippers, helping them get storage facilities and any other convenience offered.
The options for making money as an import export agent are limitless. You have to be creative and think outside the box about possible needs that you can fill as an intermediary. And for as long as you offer impressive services, you will always have manufacturers and others looking to work with you.
Advantages of Working as an Import Agent
International traders love working with import export agents. They enjoy such conveniences as reducing recruitment and training costs, and only paying for completed deals. But what benefits do you stand to enjoy as an agent?
- Minimal capital requirements
Compared to becoming a distributor or international suppliers, this kind of business does not require much capital. The internet has made it easy for agents to look for new business prospects and establish contacts without having to spend much. Sure, you might want to travel abroad once your business expands but the general capital needs to start off are minimal.
- Work from anywhere
Startups benefit from the fact that this business can run from anywhere so long as you have stable internet and a PC or laptop. This is convenient as it makes it possible to run your business on the go and reduces overheads.
- No need for specialized education
Even though education and experience make it easier to become an import export agent they are not mandatory. Certain specialized areas like customs clearance require one to get a customs broker license. An import export agent license is however optional and serves to add credibility to your business. But most aspects of the business can be handled by pretty much anyone who has a handle on entrepreneurship.
- Recurrent business opportunities
Unlike brokers, agents enjoy the benefits of recurrent business deals. It is up to you as an agent to nurture business relationships. For as long as you offer good services, your customers will not have any reason to look elsewhere. Set god prices and have good customer care habits. Doing this will ensure recurrent opportunities and free up your time to look for more prospects.
Safeguarding Your Interests as an Agent
In any form of business, it is always wise to put things down in writing. This makes it harder for treacherous parties to breach agreement terms. And in case they do, you will have the tools necessary to initiate legal action against them. There are a number of actions you can take to safeguard your business and personal interests.
- Representative Agreement
One of the most important documents for import export agents is the representative agreement. It sets out the terms on which you will operate including commission rates and the authority you hold as a representative. It should also specify territory rights to ensure that both parties work within stipulated confines. The payment method, timing and currency should also be set out in specific terms.
- Non-Disclosure Agreement
An NDA is also crucial for protecting your long term interests as an agent. This document will prevent the manufacturer and buyer from going around you and leaving you out of the transaction altogether. It is also important that you take care not to reveal any information to either party that could increase the chances of such an eventuality.
How Waystocap Can Help You Succeed as an Agent
The import export market is constantly evolving. The factors that propelled traders to success a few years back might no longer work. This makes it important for you as an import export agent to stay ahead of the latest developments. One of the most convenient ways to do this is by signing up to Waystocap.
This is the first African B2B marketplace that allows international traders to find their way into the African emerging markets. We offer all the resources necessary to make your entry into this market a success. On our platform, you will be able to meet buyers and suppliers who deal with the continent and establish a reliable network to enable trade with them.
We also help you by providing logistical information and regulations for the different markets on the continent. Armed with this information, you will be able to trade more effectively in the different market. You will tailor your products and approaches to every market to eliminate the chances of getting turned back at customs.
With Waystocap holding your hand, you will be sure to enjoy international trade and work more effectively as an agent. So sign up today and start reaping these and many more rewards.