Agency export,How exactly is commission calculated?

In international trade practice, the calculation of export agency commissions primarily involvesFour fundamental models:

• Fixed ratio billing: Charged at 1%-5% of the contract amount, applicable to standardized products.
• Step - by - step commission: Set rates based on order amount tiers (e.g., 2% for amounts below $1 million, 1.5% for the portion exceeding $1 million).
• Cost Added Model：Agency fee = Basic service fee + Additional operational costs (such as special customs clearance, expedited logistics)
• Profit-sharing mechanism: For customized products, allocate 10%-20% of the final profit.

What are the differences in commission calculation between FOB and CIF prices?

The latest international standards as of 2025.Trade termsInterpretation general rules as the basis:

• FOB terms: The commission base is all costs before the goods cross the ship's rail (ex-factory price + domestic logistics + customs declaration fees).
• The CIF provisions: The calculation must include marine insurance premium, with the formula being (FOB price + ocean freight + insurance premium) × commission rate.

Typical case: A piece of mechanical equipment was exported at a CIF price of $1.2 million, with a sea freight cost of $80,000 and insurance premium of $20,000, and an agreed commission rate of 3%. Thus, the agency fee = (120 - 8 - 2) × 3% = $33,000.

What factors will affect the commission ratio?

• Trade method differences:
  • General trade exports usually involve lower commissions (1%-3%).
  • Processing trade involves bonded supervision, resulting in a commission increase of 0.5%-1%.
• Payment Terms Risk:
  • LC payment commission benchmark rate
  • T/T prepayment can reduce the price by 0.2%-0.5%.
  • High-risk payment methods such as DP/DA require an additional 0.8%-1.2%.
• Special product attributes:
  • Additional 0.5%-1% handling fee for hazardous chemicals.
  • Additional 0.3%-0.6% for cold chain cargo

What are the new regulations for commission payments in 2025?

According to the January 2025 update from the State Taxation Administration,"Value-Added Tax Management Measures for Cross-Border Services":

• The input tax can only be deducted upon obtaining the qualification certificate for international transportation business.
• The foreign exchange payment voucher must indicate the nature code for "trade commission" (122030).
• For single transactions exceeding USD 50,000, an additional agreement filing is required.

How to Avoid Hidden Costs in Commission Calculations?

Recommended adoptionFour-Step Verification Method:

• Please confirm whether the quotation includes bank handling fees (typically ranging from 0.1% to 0.3%).
• Verification of document authentication cost allocation method (special fees such as embassy authentication)
• Define the standards for handling exceptional situations (such as fees incurred due to customs inspection delays at the port).
• Agreed exchange rate fluctuation risk-sharing mechanism (it is recommended to adopt a fixed exchange rate clause)

3 Practical Tips for Commission Negotiation

• Volume-price linkage strategy: A commitment to an annual business volume of $5 million may qualify for a 0.5% rate discount.
• 23. Service modular selection: Break down and negotiate prices for services such as customs declaration and tax refund.
• Using benchmark data: Quoting the General Administration of Customs' 2024 industry average rate of 2.8% as the benchmark.