Export agent commission rate, international sales agency fee

Agents get a commission on the sales they do for you. But what fee or percentage should you pay to your agent and how to contract him?

Roles of a commission agent

A sales agent performs part or most of your sales activities abroad. Which activities lie with the sales agent and which with your company, mostly relies on the complexity of the offering. The less complex your product or service is, the more the agent can do:

• Researching the market
• Generating leads
• Initial calling and sending information
• First meeting to present the offering and check the demand
• Second meeting to further define the offering
• Making a proposal
• Entering in negotiations
• Closing the sales
• Delivering the product or giving access to/confirming the service
• After sales service or account management

In case of a simple service like a car insurance the agent can do everything. In case of delivering a complex product like a production line the manufacturer should be involved already from the second meeting.

Average sales agent commission rates

Product category	Agent commission
Fast moving consumer goods	2-20%
Clothing and apparel	10-25%
Electronics like mobile phones	3-10%
Cars	3-10%
Software	20-50%
Services	20-50%
Luxury goods	5-15%

The commission rate for your sales agent

First of all the fee that you can pay to your agent is limited by the difference between the maximum sales price that you can expect in the market and your own production costs. If you have to give away your whole margin to your agent, there is no use of exporting your products or service.

The second aspect is to see how much effort your sales agent should take. Not all leads will end in a sales, so you will also have to take that into account. The more expensive the product, the smaller the percentage in general will be.

For example if we are talking about selling professional services, like those of lawyers, engineers or cleaners, for a full sales including account management the fee for the agent can be 20 to 50%. For only generating a ‘lukewarm’ lead, this may just be 5%.

For selling custom made speedboats, with a high order value of for example 300,000 USD, the sales fee may be 10%. But in that case from the second meeting onwards the manufacturer will join in the meetings and he will be the one making the proposal, because this is much too complex for the sales agent.