Why would you pay a factory an agency fee to import?
Is it legit for the factory to request buyer pays agency fee?
Mohamed in Egypt writes:
I’m import artificial grass from a China company and they offer me agency for product in Egypt and declare all products will be covered. They ask for 10,000$ for agency insurance/fee. Should I pay it?
Importer as exclusive agent of the factory?
I don’t know the details of your case, but here is my initial feedback.
- If the relationship is mutually beneficial, it feels strange to charge you an upfront fee, especially if you can commit to a given annual purchase.
- There are so many factories in China, if the one you found is not a good fit, find another one!
- If you want some information about the pros/cons of setting up a distributor relationship with a China factory/brand. Here is are some relevant articles I wrote:
http://chinasourcinginfo.org/2011/07/27/finding-a-manufacturer-to-produce-and-distribute-worldwide/
http://chinasourcinginfo.org/2011/06/16/how-to-partner-with-a-factory/
- If you do move forward with such a relationship, get a good contract in place. I’m happy to recommend the lawyers that did a good job for me. Send me an email and I’ll put you in touch.
Glad to help!
Question answered by Mike Bellamy
Founder of the PassageMaker Group of companies & business lecturer at the China Sourcing Academy