Doing Business in China

Import Export Businesses The Commish product price Import/export management companies

Import/export management companies usually operate on a commission basis of about 10 percent. These fees are based on the product cost from the manufacturer.

Let's say you're working with English lawn chairs, which cost you $110 each. Here's what you do: First, take the price the manufacturer is charging for the product: $110. Now multiply $110 by 10 percent, which gives you a commission of $11 per chair.

So your product price at this point is $121 per chair ($110 + $11). To come up with the final price, you'll need to add other costs to this figure: any special marking or packaging, shipping, insurance and any representative or distributor commissions that you'll pay to others in the trade channel, which we'll go over a little later. Once you've arrived at a final price, you'll check it against your competitors' prices (you did do your market research, right?). If your product's price is comparatively low, you can bump up your commission percentage.

For now, however, you can see that for every chair you or your trade channelers sell, you'll get $11. If you sell a thousand chairs, that's $11,000 for you!