Becoming an importer, commission agent, or broker

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK

You want to start importing. How will you go about it? Will you be buying products directly from a foreign supplier to sell or resell? Or do you want to act as an intermediary for a foreign client, finding and negotiating with potential customers? In the first case, you are an importer. In the second, a commision agent. The broker acts as an independent intermediary. Read more about these 3 roles.

What does an importer do?

An importer buys products from a foreign supplier. You may import for your own use. For example, because you manufacture goods and need certain raw materials or half-fabricates from abroad. You can also import products to sell them on. In that case, you are an importer and reseller, or dealer. A reseller is also referred to as a distributor.

What does a commision agent do?

A commission agent sells the products on behalf of a (foreign) supplier and receives a commission. This is usually a percentage of the sales price. The commission agent negotiates the sales price and closes the sale. Usually, the agent specialises in a product type. They have their own network in their country or area, speak the language, and understand the business culture. They will market the product if necessary, and find buyers in their country. The buyer only deals with the agent, not with the original supplier.

Importer vs. commision agent: the differences

These are the main differences between the importer (acting as reseller/distributor) and the agent.

Importer (reseller/distributor)

  • Usually puchases stock.
  • Needs more capital.
  • Fast delivery possible.
  • Buys at their own cost and risk.
  • Sets their own profit margin.
  • Product liability for goods imported from outside the EEA.
  • Is responsible for pricing and marketing of the product to their customers.
  • Advertises when selling to customers.
  • Often offers maintenance or repair service as an option.
  • No protection by EU legislation (regulation 86/653/EEG).

Commision agent

  • No large starting capital required.
  • Mediates between principal and customer.
  • Receives a commission on sales they have negotiated.
  • Not a party in claims for damages due to product liability.
  • Usually does not offer maintenance and repair themselves.
  • Is protected by European legislation (regulation 86/653/EEG).
  • May claim a compensation when collaboration with the client is ended.

What does a broker do?

A broker acts as an independent intermediary between the supplier and the buyer. They do not act on behalf of either one. They facilitate the sales transaction but are not authorised to negotiate the sales price or conditions. The buyer knows who the supplier is.

A seller will use a broker when they want to keep control of the sale, but do not know the language or business culture of country where they are selling.

Record all agreements

Record agreements with foreign suppliers in an agreement. Which agreement you use depends on your role:

Document agreements

No matter which role you choose or agree on with a foreign supplier: make sure you document your agreements in writing. An oral agreement is legally valid, but harder to prove in case of a conflict.

There are model contracts available at the International Chamber of Commerce (ICC), the International Trade Centre (ITC), and the VNHI (the Dutch sector organisation for importers and agents).

Are you in doubt about your contract? Have your agreement checked by a lawyer who specialises in international contracts.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK