Being An Agent for US Importers
If you know enough manufacturers and suppliers in your area and have good contacts with them you might think about becoming an agent. As an agent you would solicit and procure business from potential customers (US importers) on behalf of one or more suppliers (in your area). In return you get a percentage of the realized sales revenue as commission. The person who does this is also called a middleman, representative, buying agent, commission agent, and mercantile agent.
Many agents make more than the suppliers or importers that they work for. There is very little capital needed and there is very little risk if the agreement falls through.
Qualifications To Be An Agent
To be successful as an agent, you should:
1. have a good ability to read, write, and speak English
2. know several suppliers or manufacturers in your area
3. be able to take care of details
The role and duties of the agent vary from agent to agent and from US importer to US importer. The agent can work for the local supplier to find US importers and get orders from them. Or the agent can work for one or more US importers to find the products in the agent’s area.
What Does An Agent Do?
Generally speaking, however, the agent does one or more of these tasks on behalf of the US importer:
1. negotiate with the supplier for a best price and term
2. send product information to the US importer
3. introduce the US to new products
4. inform the US importer special offers (discontinued models, etc)
5. send samples to the US importer
6. place order under one L/C if there is more than one supplier (saves bank charges)
7. check the product to make sure the quality is acceptable
8. check on the goods while they are being produced and give the US importer a progress report
9. arrange for shipment of goods to local port and cargo consolidation (if from more than one supplier)
10. inform the US importer when the order has cleared local customs
11. monitor shipments as they leave the port
12. arrange meetings between local suppliers and the US importer in case the importer visits your area
How Much Does The Agent Get Paid – Who Pays - And How?
How much, who pays, and how it is paid depends on a variety of factors. The agent is almost always paid a commission (percentage of the price of the order). How much the agent gets paid depends on the price of the order and how hard it was for the agent to find the product. Shipments that are very large (many thousands of dollars) have a low commission, for example 2 or 3%. Shipments that are small have a higher commission, for example 6 or 7%. Orders for products that are easy to find, for example a basic men’s shirt, have lower commissions. Orders for products that are hard to find, for example a part that is rare or a piece made of unusual materials, would bring a higher commission.
Who pays the agent depends on who contacted the agent first. If a local supplier contacts the agent and ask for buyers in the US, then the local supplier would pay the commission. If however, the US importer contacts the agent asking for products from local suppliers then the US importer pays the commission.
The most difficult question is – how does an agent get paid. If there is a great deal of confidence between the agent and person who owes him/her money, the easiest way is for the agent to invoice that person for the commission. This assumes, of course, that the agent trusts the person to pay. If the agent is in another country and the person refuses to pay it can be very difficult to collect.
A more complex, but safer, way to get paid is by Transferable Letter of Credit. More detailed information on how an agent operates and ways an agent gets paid can be found in the guide Successful Marketing and Selling To US Importers.
Keys To Success
Being an agent is a lot of hard work, but it can be very profitable. The agent should always get the agreements between him/her and the supplier and him/her and the seller in writing. Verbal agreements may be fine to get started. But always get it conformed in writing before the actual sale.
And do not have just one or two buyers in the US and just a few suppliers in your local area. If one of your buyers in the US or one of your suppliers in your own area stops doing business with you then you can be in real trouble. Spread out your business over at least four buyers in the US. And have as many suppliers in your own area can you can. The more suppliers you have to choose from the better you can serve your buyers in the US.
