When purchasing from China, you should know the truth about commissions!

By justchinait
December 22, 2020

Regarding foreign trade commission, this is the gray area of the industry.

Some people blame it as a disruptor of trade rules, others admit that it is an unspoken rule of the industry, and some even point out that it is easier to take orders for a trading company.

Trade commissions

Purchasing commissions

Inspection commissions

Translation commissions

Freight forwarding commissions

Have you ever experienced this?

Unveil them one by one today

1.Foreign trade business commissions

Foreign guest A finds foreign trade salesman B to purchase a batch of masks. Foreign trade salesman B finds mask factory salesman C to purchase and C will directly ask B how much commission to add to the unit price during the quotation.

2.Purchasing commissions

The most common purchasing commission is that the purchaser earns the difference by raising the unit price of the product. After the order is completed, the difference will be remitted to the purchaser’s personal account.

The second is to get a rebate based on a percentage of the total order amount. If you go to Shenzhen Huaqiang North Commercial Area to purchase the spot and high-profit electronic products, the boss will return cash to the purchaser on the spot as a coffee fee if the total amount reaches 10,000RMB.

3.Inspection commissions

Quality inspectors find fault with the products, the products won’t be passed even if the products are ok if you do not give them the red envelope.

4.Translation commissions

Some translators rely on factory workers who don’t understand English to deliberately increase the price when talking about the quotation. After the order is placed, they will issue two orders, one order for the factory is 10 RMB/pc and another order for customers becomes 11RMB/pc. The extra 1RMB goes into the translator’s pocket. It is common that a translator can make more money than a factory from an order. Some translators even ask the factory to add their profit to the quotation and they will send the inferior-quality goods to the customer after taking the benefit of the factory,

The wool comes from sheep’s back

The commission seems to be the result of a win-win situation between the buyer and the seller, but the negative impact is far greater than the profit generated by the transaction between the two parties:

1.Cause bad competition and affect the healthy development of the market;

2.The default of this unspoken rule makes the overall profit of the industry decline;

3.A seemingly widespread phenomenon, once a problem occurs, the loss outweighs the gain.

With the improvement of the industry system, many unspoken rules will not survive. After all, foreign trade depends on quality and technology. The most important thing is to improve product quality and production technology to increase product competitiveness.

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