Don't Be Confused Anymore! A Big Revelation about Agency Export and Entrusted Export

In the complex and ever-changing field of international trade, the choice of export mode is of crucial importance. For many enterprises, agency export and entrusted export are two common ways. But what exactly are the differences between them? Today, let's explore in depth together to help enterprises make a more appropriate choice in their export business.

From a legal perspective, agency export means that an agency company like Zhongshitong is entrusted by the entrusting party to handle export business in the name of the entrusting party and charge a certain agency fee. In this mode, the entrusting party shall bear all the responsibilities and risks of the exported goods, and the agency company is only responsible for completing the relevant procedures according to the instructions of the entrusting party.

While in the case of entrusted export, the entrusting party entrusts the export business entirely to the entrusted party, and the entrusted party conducts export operations in its own name. The entrusted party bears more responsibilities and risks to a certain extent. For example, in terms of the quality of goods, once there are problems, it may directly face the pursuit of liability from foreign customers.

When it comes to agency export, the entrusting partys all aspects of the export business, including finding customers, negotiating orders, etc. The Zhongshitong agency company mainly assists in handling customs declaration, inspection application, foreign exchange settlement and other procedures, providing professional service support. For example, the enterprise where Mr. Zhang works adopts the agency export mode. He first negotiates an order with a foreign customer and then asks Zhongshitong agency to complete the subsequent cumbersome export process.

The process of entrusted export is relatively simplified. The entrusting party only needs to hand over the goods to the entrusted party, and the entrusted party is responsible for completing a series of work from finding customers, signing contracts to export customs declaration. Ms. Li's enterprise chooses entrusted export. After she hands over the goods to the entrusted party, she can focus more on production, and the affairs in the export link are basically handled by the entrusted party.

In terms of financial treatment, in agency export, the entrusting party is the subject of export sales revenue. The agency company only charges an agency fee, and the relevant rights and interests such as export tax rebates belong to the entrusting party. The entrusting party needs to conduct a comprehensive financial accounting for the entire export business, recording sales revenue, costs, etc.

In entrusted export, the entrusted party conducts financial accounting as the subject of export sales, including confirming sales revenue, etc. After the entrusted party settles the accounts, it will pay the amount after deducting relevant fees to the entrusting party. This makes the two parties different in the manifestation of financial statements and tax treatments.

If an enterprise itself has strong customer resources and sales capabilities but lacks experience in export operations, agency export may be a good choice, as it can complete the export with the professional advantages of the agency company. If an enterprise hopes to focus more on production and does not want to be overly involved in the export process, entrusted export may be more suitable, and it can outsource the export business to a professional entrusted party.

Whether it is agency export or entrusted export, enterprises need to fully understand their own needs and weigh the pros and cons. It is hoped that through the analysis in this article, everyone can be more clear about the choice of export mode and move forward steadily on the stage of international trade. Also, everyone is welcomed to share their own experiences and insights in the comment area and jointly discuss better export strategies.