My domain is not in trading or something similar. I came in Taiwan something like 8 months ago so i can be with my girlfriend and also get some, Asian, professional experience. 5 months now i am working full time for a local consultancy and everything is fine.
My education background and current professional domain, are not directly trading or business, however, outside my work the most contacts i have and potential collaborations i could establish are related to sourcing manufacturers suppliers to companies located in my home country and to a small network of friends or ex-colleagues i have in other countries. Acting as the middle-man was never in my plans however i see the potential not only to increase my income but also get to establish a network (bigger or smaller) of local manufacturers (that i could also exploit some time in the future to produce my own products) but also companies outside Taiwan. I never had such an experience so i am a bit lost on how to start researching on how i could get involved in sourcing/agent activities. Please note that this i consider it as a part-time job and i am not looking to establish a company. Still i do not have any signed deal of client however, in the near future there maybe some potential collaborations.
At the present time, the only “tools” i have are a) a template of a contract i could use between me and a client in my home country (Europe) written by my father who is a lawyer b) my girlfriend, under her name, has a trade company registered that maybe i could “use” as a official way to provide to a client or the Taiwanese state any documents needed.
I tried to research the forum for similar questions but i only found bits and pieces that however can not give me a somehow complete picture on the way i could proceed. Any input is highly welcomed and appreciated.
Find 1-2 customers willing to start out and get started.
Get a percentage of FOB value, I suggest 5 to 8%.
If you merely get a commission, I suggest getting that remitted into a HK account.
For commissions, I used to get them paid into my personal account back when overseas income was tax free, however nowadays that´s not the case, so better route them to Honkers.
When I work as a commission agent, I do it personally, IE my trading co is not involved in any way.
Oh and another thing, with amounts being relatively small, IE one bill for my services may max be for GBP5,000 I do not have or use written contracts. If my customers want to get rid of me, then a contract is short term protection at best, and enforcing it will be a pain.
Note that working as a buying agent is a hobby for me, others collect stamps, I try to become better at dealing with Chinese suppliers and get some beer money for whenever I am in HK and want to drink with HGC.
If you insist on having a company for billing purposes, then open one in your own name either here or in HK. Do not farm that bit out.
Mr He, thanks for your response.
Yes, this is exactly what i also want to do. Acting in the future as an agent (or sourcing facilitator…) i consider it as a part time and hands-on training for my future plans and not as a full time employment. Also from my research the 5-8% commission you mention sounds reasonable.
As for the contract issue you mentioned, if my first collaborations will be with friends/ex-colleagues i will not use it… I know a contract may make things more complicated (but also more simple in case of disagreements during the collaboration). You mainly act as an agent for companies/individuals you know and trust or even for ones you do not know?
Also, from your experience what is an average amount of money transaction (international buyer / local manufacturer … but of course it depends on quantities and kind of products…). From my very small experience of dealing with suppliers MOQs etc is that we are talking about $20.000… but this is the case for product development + manufacturing and not just buying/trading.
I don’t want to sound harsh, but if you have to ask these questions then you have probably missed a trick. You are basically asking us how to connect A + B to profit somehow without having to think about it yourself.
If you see that something is selling in country X at a much higher price than country Y after freight + taxes then it’s not rocket science and there’s no need to fart about asking questions.
if you are starting from the bottom, do some market research first, do a business plan to make sure you have the right objectives. nobody likes it but do it, no matter what size you want to be, it will help fill in the holes. try alibaba.com and search for sourcing/manufacturing in china, you must be warned, this isn’t new, it’s very competitive so know your market first…
@llary, you are not harsh at all and i get you point . Also @ baberenglish, my objective is not to find a product that i will export from here to another country. My point is more that if through a small network of manufacturers i have and wish to expand i could suggest-push some product to importers that may ask for example for a toy supplier… I got quite many people asking me to let them know for companies (in various fields) that i think are interesting so THEY could potentially import these products.
Maybe i am not researching correctly but really i can not find info even such as if I have to pay for the products for example, send them to an importer in the X country and then he pays me the money. Or, how can i avoid suggesting a Taiwanese company to the XYZ company and then the XYZ company orders from the Taiwanese and bypass me…i guess here is where i need a contract.
This idea is quite recent. I have none (family/relative/friend) who has been into trading and thus all this is terra incognita for me so i am trying to collect as much info i can. As through my online research, i only get lists of Sourcing Agencies and until now i have not found something so enlightening.
Thank you all for your feedback.
Competitive yes, if you work through your network and you do a good job, then in general you do not have to worry about competition as much in my experience.
I did not do a whole lot of research, a UK friend of a friend asked me to find something for him, I did so, he liked the price, bought some samples, liked the quality bought a little bit, then he bought more and more and more and added new products etc.
A US one told me to find a grinder, I did so, OK but too espensive, went to China, got burned, went back to me, bought a few, bought a lot, became US agent for the company bought some more, and I get a cheque once in a while. Spend most time on priming the suppliers well, that takes time.
The first thing you need to do is identify the industry/product you want to deal in as a agent. You need to go narrow and deep.
It is also critical to have an expert knowledge of the industry/product you choose. Nothing worse then dealing with an agent who does not know much about his field. I have dealt with such agents before.
You also need to determine your terms. This is also critical for your cash flow. I have seen many businesses fail due to a lack of understanding of terms. Will you supply, ex works, FOB, CIF etc? Will you require a deposit, LC, 30 days etc.
Often a customer will choose an agent based on his terms as it has a direct effect on the cash flow of the customer as well.
Basically you need to get an excellent understanding of the market you are going to serve on the supply and demand side.
I am not sure if these are the type of ideas you were looking for.