Is there really such a big difference between import agency and consignment sales?

On the big stage of business activities, these two models of import agency and consignment sales often appear, but many people are not very clear about the subtle differences between them. Today, let's explore in depth and figure out exactly what the differences are between import agency and consignment sales.

Import agency, literally, means that an agent is assigned by the principal to complete a series of business operations related to imports. For example, Mr. Zhang wants to purchase a batch of special products from abroad for domestic sales, but he knows nothing about the import process, customs procedures, etc. At this time, he can entrust a professional import agent, such as an organization like Zhongshitong, to help handle it. The import agent is mainly responsible for communicating with foreign suppliers, signing import contracts, arranging transportation, customs declaration and inspection, etc., to ensure that the goods can be imported into the country smoothly, and they charge a certain agency fee.

Consignment sales is another situation. Consignment sales usually means that a seller accepts the entrustment of a manufacturer or supplier to help sell their products. For example, Ms. Li runs a retail store, and a brand supplier approaches her, hoping that she can consign and sell their products. Ms. Li doesn't need to be responsible for production, procurement, etc. She just needs to use her store resources and sales channels to sell the products provided by the supplier, and then obtain a consignment commission from the sales amount according to the agreed proportion.

In the import agency business, although the import agent is responsible for the operation of many import links, the ownership of the goods generally belongs to the principal. That is to say, if the goods are damaged, lost, etc. during the transportation process, as long as it is not caused by the gross negligence of the import agent, the risk is mainly borne by the principal. For example, when Zhongshitong is acting as an agent to import a batch of electronic products, although it has fulfilled its reasonable duty of care, the goods are partially damaged due to bad weather during sea transportation. In this case, the loss is generally borne by the owner of the goods, that is, the principal.

In the consignment sales business, after the seller receives the consigned products from the supplier, it has a certain responsibility for the storage of these products. If the products are damaged due to the seller's own reasons, such as improper storage, the seller has to bear the corresponding losses. Just like when Ms. Li is consigning and selling a certain cosmetics, due to the leakage in the store warehouse not being discovered in time, some cosmetics are soaked and damaged. Then Ms. Li has to be responsible for this part of the losses.

The import agent is located between the principal and the foreign supplier. On the one hand, it has to negotiate with the foreign supplier on product price, quality, delivery time, etc., and on the other hand, it has to carry out work according to the requirements and instructions of the principal, and report the progress of the import business to the principal, etc. They are more like a bridge connecting the domestic and foreign parties to ensure the smooth progress of the import business.

The consignment seller mainly deals with the supplier and the consumers. They have to obtain products from the supplier and then sell the products to consumers through various sales means. The focus is on expanding the market and increasing product sales volume, so as to obtain more consignment commissions. For example, in order to increase the sales volume of the consigned products, Ms. Li will attract consumers to buy through holding promotional activities, optimizing the store display, etc.

Through the above analysis, we can clearly see that there are obvious differences between import agency and consignment sales in terms of business nature, risk bearing, and relationships with upstream and downstream parties. Understanding these differences is very important for both enterprises that want to expand their business and entrepreneurs who are going to engage in related industries. I hope that in the future, when encountering similar business models, everyone can distinguish accurately and make wiser business decisions! You are also welcome to share your insights and experiences about these two business models in the comment section.