Do we need to collect margin for import and export agency under TT method? Come and find out!
Solved#Export agent#
I recently plan to engage in import and export agency business and heard that there is a payment method called TT. I would like to ask whether margin is collected for import and export agency under TT method. I'm not clear about the regulations in this regard and worried about being cheated. If it is collected, how much is usually appropriate? Are there any industry standards or common situations for reference? I hope someone who knows the ropes can help answer. Thank you!
Professional consultant answers
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
It is not always necessary to collect margin for import and export agency under TT method. This mainly depends on several factors, such as the cooperation relationship between the principal and the agent, and the reputation of the principal. If the principal has a good reputation and a good track record of past cooperation, the agent may consider not collecting the margin. However, if it is a new cooperative customer and the agent has limited understanding of their reputation, the agent may require the collection of margin to reduce risks.
There is no fixed industry standard for the collection ratio of margin, and the common range is around 10% - 30% of the contract amount. For example, for the import and export agency of some high-risk products, the agent may be inclined to collect a higher proportion of margin. The specific ratio can be negotiated and determined by both parties. The key is to safeguard the interests of the agent while taking into account the principal's cost and willingness to cooperate.
It is recommended that you fully communicate with the agent about the margin issue before cooperation and clarify the relevant terms to avoid subsequent disputes.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Not necessarily. If you have cooperated before and everything has been going smoothly, the agent may not ask for the margin.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Some agents collect margin because they are afraid that the customer will not pay on time or have other default behaviors. If you can prove that you have a good credit, you may not need to pay it.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
As far as I know, there is no absolute rule in the industry. Some agents collect margin for capital turnover, depending on their own needs.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
If the agent thinks the business risk is low, for example, the cooperation partner is a large enterprise with guaranteed reputation, the agent may not collect the margin.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Whether to collect margin also depends on the value of the goods. If the value of the goods is high, the agent may require the collection of margin to reduce risks.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Some agents will decide according to the market situation. If the market fluctuates greatly, for insurance, they may collect the margin.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
If the agent has sufficient strength and trusts the customer, it may also not collect the margin, mainly depending on the agent's own judgment.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Collecting margin is a means of guarantee. If both parties can negotiate other guarantee methods, perhaps there is no need to collect the margin.