Choosing the wrong export model can bring tears to a company's development!

On the vast stage of international trade, companies often face a critical decision: Should they choose self-operated export to explore overseas markets with their own resources, or leverage the professional advantages of agency export to embark on a global trade journey? This decision is like choosing a course at sea, determining the direction and future of a company. Today, let’s delve into the differences between self-operated export and agency export.

Self-operated export requires companies to establish a complete export business system. From finding overseas clients and negotiating orders to handling import-export licenses, customs clearance, inspection, shipping arrangements, insurance, and finally settlement and tax refunds—all these steps must be managed by the company itself. This demands a professional team familiar with international trade rules and procedures. For example, Mr. Zhang’s company decided to adopt self-operated export. To complete their first order successfully, they spent months recruiting foreign trade specialists and learning various export procedures—a process that was both arduous and complex.

With agency export, companies only need to focus on production and sales. The agency, such as Zhongshitong, handles most export processes, including customs clearance, inspection, logistics, payment collection, and tax refunds. Ms. Li’s factory chose agency export, entrusting the cumbersome export tasks to Zhongshitong while dedicating more energy to improving product quality and developing new clients—saving time and effort.

Self-operated export imposes significant financial pressure on companies. On one hand, companies must prepare funds for raw material procurement and production before exporting goods. On the other hand, the period from export to payment collection can be lengthy, tying up capital. Additionally, delays in tax refund processes can further strain cash flow. For instance, if a company has an order worth $1 million with a two-month production cycle and a three-month payment collection period, the financial pressure over these five months can be immense.

Agency export can alleviate some financial pressure. Agencies like Zhongshitong typically have richer financial resources and more flexible arrangements. Some agencies even offer financing services to help companies address short-term cash flow issues. Moreover, agencies are more professional and efficient in handling tax refunds, accelerating the process and enabling faster capital recovery.

Self-operated export requires companies to bear all risks independently. Market risks arise if companies misjudge international demand, leading to unsold inventory. For example, a company might invest heavily in producing a product, only to find it unpopular due to shifting global trends. Credit risks emerge if overseas clients delay payments or go bankrupt, causing significant losses. Companies must also navigate policy risks and exchange rate fluctuations on their own.

With agency export, while primary risks still fall on the company, agencies like Zhongshitong can help mitigate some risks through professional expertise and early warning systems. For instance, agencies conduct thorough credit checks on overseas clients, providing risk assessment reports to aid decision-making. They also offer professional advice on policy changes and exchange rate fluctuations.

Self-operated export requires companies to build a full-fledged foreign trade team, hiring specialists like salespeople, document handlers, and customs declarants, which incurs high labor costs. Additionally, companies must invest in office space, equipment, and other fixed expenses, which can be substantial over time.

Agency export involves paying a commission to the agency, usually calculated as a percentage of the export value. This cost is relatively fixed and controllable. Compared to the comprehensive costs of self-operated export, agency export offers clear cost advantages for smaller-scale operations.

When choosing between self-operated export and agency export, companies must carefully evaluate their capabilities, business scale, and market strategies. Both models have unique advantages and challenges. We hope companies can make the best choice for their development and navigate the waves of international trade successfully.