29d • General discussion
Contract Mistake Many Sales Consultants Make (Read Before You Sign)
One of my students shared a contract that he received from Japan. There are many misunderstandings between you and the exporter in Japan. Before you sign a contract, make sure everything is clear.
In this paragraph, the exporter mentioned: “subject to sales, the consultant will add markup or profit.”
Here the confusion is: what is markup?
When you sell a car, exporters want all their costs and their desired amount of profit added first. Then you can add your profit. For example, if the total cost and profit of a car is $5,000, then you will only get money from whatever you add after $5,000. For instance, if you sell at $5,200, you might earn something.
The second confusion is that he mixed two things: markup and profit. It might be possible that he is referring to giving 45% of the additional $200 that you put as profit.
Why can this be a disaster for you? The market is very competitive, and it is hard to negotiate with clients. If the market price is $5,000 and your total cost is $5,000, you won’t be able to add your profit and sell. It will be very difficult.
What do you have to do? You have to explain to your exporter in Japan that you want to be a part of the profit percentage, as explained in detail in our course, regarding costs incurred during the entire process.
Second thing: the supplier mentioned that the company will provide the sales consultant with a fixed cost. But generally, there cannot be any fixed cost, as explained in the course as well.
Fixed costs can be export certificate charges and a few other items (explained in the course). But there are many variable charges, such as cars bought through different auction houses having different costs, and different location transport charges (explained in detail in the course).
You have to make a contract where the exporter shares all the costs incurred during their process and mentions only fixed charges (which are very few). The CNF price you are selling minus the total cost is your total profit, which can then be shared between you and the exporter in Japan
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Contract Mistake Many Sales Consultants Make (Read Before You Sign)
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