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What core negotiation leverage and pitfall avoidance points should be mastered when imported brands negotiate with domestic agents?
or complex compliance issues.
clearance and fund security.
I am an entrepreneur running a mid-to-high-end maternal and infant retail business in Shanghai. Last year, I connected with a high-end European and American baby complementary food brand at the Shanghai Maternity, Baby and Child Exhibition, and wanted to win the agency right in East China, but was politely rejected three times by the other party on the grounds of insufficient channel coverage and doubtful compliance operation capacity. Last week, I suddenly received a second investment invitation from the brand's Asia-Pacific headquarters.
I am both excited and anxious: I do not know how to accurately sort out the core negotiation leverage that can impress the other party, and I am afraid of falling into hidden pitfalls in the agency agreement, such as traps of exclusive clauses, subsequent compliance costs exceeding expectations, and even worried that after the negotiation is successful, the reputation of the existing 12 stores will be damaged due to cargo right or tax issues. I am so anxious that I can not even sleep well, and I would like to ask how to efficiently promote this negotiation and avoid all kinds of risks?
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
First of all，we should expose common industry misunderstandings: many entrepreneurs mistakenly believe that only terminal store resources can impress imported brand owners，but ignore the two hard indicators that brand owners focus on: cross-border compliance operation capacity and supply chain response speed.
If you fall into this misunderstanding and blindly promise channel coverage beyond your own capacity，you will be terminated the agency agreement in advance if you fail to meet the quarterly sales assessment，losing the marketing and promotion costs invested in the early stage，in severe cases，insufficient compliance capacity will lead to detention of imported products，resulting in tens of thousands of yuan of detention fees and storage fees，and also affect the brand's reputation in China due to stock out，and even be claimed for liquidated damages by the brand owner，which affects the normal operation of existing stores.
Physical risk isolation measures can be started from two aspects: first，entrust a professional foreign trade agency company to complete cross-border compliance operation capability diagnosis in advance，and issue a compliance endorsement document with a qualified seal to directly dispel the brand owner's compliance concerns，second，negotiate with the brand owner for phased agency authorization，first obtain the pilot agency right in Shanghai，and expand to East China after meeting the standards for two consecutive quarters，reducing trial and error costs.
Exclusive loss mitigation tips: explicitly add compliance fault tolerance period clause in the agency agreement. If the compliance cost exceeds the agreed range by more than 3% due to temporary adjustment of domestic customs and tax policies，both parties can renegotiate the cost sharing ratio，at the same time，agree on a "performance assessment flexible mechanism"，if sales fail to meet the standard due to force majeure，you can apply for an extension of the assessment cycle to avoid unilateral termination of the agency.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
When negotiating agency for imported brands, it is necessary to clarify the division of customs declaration responsibilities and the handling mechanism for valuation disputes in advance. If the brand owner is responsible for providing import documents, it shall be required to provide electronic copies of the certificate of origin, original factory invoice and packing list in advance, pre-audit the authenticity and consistency of the documents, and focus on checking the qualification of the visa institution of the certificate of origin and whether the goods description on the invoice matches the commodity attributes corresponding to the customs code.
If there is a customs valuation dispute later, it shall be agreed in the agency agreement the evidentiary materials that both parties need to cooperate to provide, such as the original factory cost accounting details and international logistics bill of lading provided by the brand owner, to avoid additional costs caused by delayed proof of goods detention, and at the same time, relying on the integrated customs clearance mode, pre-declare at the local customs in advance to reduce the risk of on-site valuation.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
When negotiating agency for imported brands, it is necessary to clarify the international logistics path planning and cargo right control clauses. First of all, the division of logistics responsibilities shall be agreed. If the agent is responsible for the domestic logistics, the brand owner shall be required to provide a stable direct flight or optimal transit scheme, and give priority to shipping companies with direct routes to Shanghai Port, so as to avoid cargo damage or delay caused by too many transits.
At the same time, the cargo right transfer node shall be clearly defined in the agreement. It is recommended to set the cargo right transfer node after picking up the container at Shanghai Port terminal, rather than after loading at the port of departure, to avoid cargo right disputes caused by force majeure during transportation. In addition, the rules for bearing the free storage period and detention fee shall be agreed.
If the goods are detained due to the delay of the brand owner's documents, the relevant detention fee and storage fee shall be borne by the brand owner. At the same time, emergency plans for port change and container dumping shall be formulated in advance to ensure that the goods can be transferred to the nearest port for customs clearance in time.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
When negotiating agency for imported brands, it is necessary to plan the cross-border tax structure in advance to control tax costs. First of all, the way of bearing VAT in the import link shall be clarified. The VAT deferred payment policy can be applied to delay the payment of import VAT to the domestic sales link to ease the pressure of capital occupation. At the same time, the pricing rules for cross-border related transactions shall be agreed to avoid special tax adjustment by the tax authorities due to the price deviating from the market fair price.
The brand owner shall be required to provide the pricing basis for supplying goods to agents in other regions to ensure the fairness of the purchase price of domestic agents. In addition, the income tax cost in the domestic sales link shall be calculated in advance. If brand use fee is involved, the withholding obligation of brand use fee shall be clarified to avoid tax fines and late fees caused by failure to perform the withholding obligation.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
When negotiating agency for imported brands, it is necessary to clarify the compliant operation process of cross-border receipt and payment of foreign exchange. First of all, the settlement method of receipt and payment of foreign exchange shall be agreed, and CIPS RMB cross-border payment system shall be preferred for settlement to avoid exchange rate fluctuation risk. At the same time, the transaction background of receipt and payment of foreign exchange shall be true and compliant, and the goods details and document requirements corresponding to each payment shall be clearly defined in the agreement to avoid account freezing due to unclear transaction background.
In addition, the operation specifications for foreign exchange settlement and account reconciliation shall be agreed. If the agent is responsible for the receipt and payment of foreign exchange, a cross-border RMB settlement account shall be opened at the bank in advance to ensure that each foreign exchange settlement is supported by corresponding import declaration forms, contracts and other documents, to avoid foreign exchange settlement failure due to incomplete foreign exchange settlement documents, which affects the timeliness of payment.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
When negotiating agency for imported brands, it is necessary to focus on reviewing the core legal clauses in the agency agreement. First of all, pay attention to the exclusive clause. If the brand owner requires exclusive agency in East China, it shall be clarified whether the exclusive scope is only offline stores or includes online channels. At the same time, the liability for breach of contract that the brand owner shall not develop other agents in the region during the exclusive period shall be agreed. Secondly, avoid soft clauses of letter of credit.
If L/C settlement is adopted, the brand owner shall be required to delete soft clauses such as "payment can be made only after providing the inspection report confirmed by the brand owner" to avoid passive payment. In addition, the legal requirements for the transfer of cargo right shall be clarified. The specific time, place and voucher for the transfer of cargo right shall be agreed in the agreement, and relevant clauses for intellectual property customs protection filing shall be added. The brand owner shall be responsible for handling the intellectual property filing to avoid infringement complaints during customs clearance of products.
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
When negotiating agency for imported brands, it is necessary to clarify the response mechanism for on-site customs inspection in advance. First of all, the brand owner shall be required to provide detailed packing list and quality inspection report of the goods, and predict possible inspection risk points in advance, such as whether the ingredients of baby complementary food meet domestic food safety standards, and whether the Chinese labels on the packaging are compliant. At the same time, the division of inspection responsibilities shall be agreed in the agreement.
If the inspection fails due to unqualified goods labels of the brand owner, the relevant rectification costs and port detention fees shall be borne by the brand owner. In addition, master the skills of identifying the authenticity of seals. The brand owner shall be required to provide photos and numbers of seals after loading, and check the seal number and appearance on site when picking up the container. If the seal is found damaged, take photos and keep records immediately and notify the brand owner to avoid inability to prove the cargo damage dispute.
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
When negotiating agency for imported brands such as imported baby complementary food, it is necessary to clarify the compliance and safety standards of goods packaging. First of all, the brand owner shall be required to provide packaging materials that meet domestic food packaging standards. The packaging shall have moisture-proof and damage-proof properties to avoid food deterioration caused by moisture during transportation.
At the same time, the brand owner shall be required to provide a compliance inspection report of the packaging to ensure that the packaging materials do not contain bisphenol A and other harmful substances and meet the national standards for food safety in China. In addition, the packaging reinforcement scheme shall be agreed.
If sea transportation is adopted, the brand owner shall be required to set buffer pads and fixing devices in the container to avoid packaging damage caused by ship jolting. At the same time, it shall be agreed in the agreement that the cargo damage liability caused by unqualified packaging shall be borne by the brand owner. If customs clearance is rejected due to packaging problems, the brand owner shall be responsible for repackaging and bear the relevant costs.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
When negotiating agency for imported brands, it is necessary to build a reasonable supply chain structure to optimize cost and inventory management. First of all, the conversion of trade terms shall be agreed. It is recommended to adopt FOB Shanghai Port trade terms instead of CIF terms, so that agents can independently choose logistics service providers and control logistics costs. At the same time, an inventory linkage strategy shall be established.
The brand owner shall be required to prepare goods in advance according to the agent's terminal sales data, and set a safety inventory threshold to avoid terminal stock out or inventory backlog caused by shortage of goods. In addition, cost calculation shall be carried out to calculate the full-link cost from import customs clearance to terminal sales, including tariffs, value-added tax, logistics fees, storage fees, marketing fees, etc. The adjustment mechanism of purchase price shall be agreed in the agreement. If the international sea freight cost increases by more than 5%, the purchase price can be renegotiated to ensure cost control.