Commission Agent

Commission Agent refers to a trade arrangement in which an agent, entrusted by a principal, promotes goods or seeks buyers on the principal's behalf and receives a commission calculated as a certain percentage of sales revenue or profit after a deal is concluded. The agent does not own the goods, bears no transaction risk, and is mainly responsible for facilitating transactions, transmitting information, and assisting in negotiations. Use cases include: exporters wishing to expand markets through local agents, or importers entrusting agents to make purchases. Points to note: the agency agreement should clearly specify the commission rate (usually 1%-5%), the calculation basis (FOB or CIF), the payment timing (after deal conclusion or after receipt of payment), and exclusive agency clauses. Unlike Exclusive Sales, where the distributor buys the goods outright and assumes all profits and losses, and unlike a Broker, who merely connects parties without continuously representing the principal, a Commission Agent is commonly used in industries such as mechanical and electrical products and consumer goods.