Commission, daily rate or project fee: how sourcing agent charges are built
Two agents can quote for the same order and send you numbers that cannot be compared at a glance: one asks for a percentage, the other for a rate per day. The way to compare them is to look at what each fee is tied to, then work both out for your own order.
This article describes structures only. It gives no typical rates, because this site holds no sourced data on what agents charge.
The three structures
Percentage commission
The fee is a percentage of the value of the goods the agent buys for you. It rises with the size of the order and with the unit price. Some agents add a minimum fee so that small orders still cover their work.
Check which amount the percentage is taken on. A commission on the factory price alone is a different sum from a commission on the factory price plus domestic freight and other costs.
Daily rate
The fee follows the agent's time: days spent visiting factories, negotiating, checking production. It does not move with the order value. It rises when the work takes longer than planned.
Check what counts as a day, whether travel time and travel expenses are charged on top, and who approves extra days.
Fixed project fee
The fee covers a defined piece of work, for example finding and vetting suppliers for one product and reporting back. It does not move with the order value or with the days spent, as long as the scope stays the same.
Check what is in scope, what you receive at the end, and what is charged if the scope changes.
Mixed quotes
Quotes often combine structures: a project fee for the supplier search, then a commission on the orders that follow. Treat each part separately and add them up for the order you expect to place.
How to compare two quotes
- Fix the order: the goods value at factory price and, if you want a per-unit figure, the number of units.
- Work out each agent's fee for that order under the structure they quoted.
- Add the costs you pay whoever you choose — inspection, domestic freight, samples.
- Compare the totals, and look at the break-even point: the goods value at which a commission equals the other agent's daily-rate or project fee. Below that value the commission is the smaller fee; above it, the other structure is.
The cost estimator on this site does steps 2 to 4 from the figures you enter.
What the fee does not tell you
A lower fee is not the whole comparison. The structure also shapes the agent's interest. A commission grows when you spend more. A daily rate grows when the work takes longer. A project fee is earned when the defined work is delivered. None of these is wrong; each needs a matching control on your side — a price check for the first, an agreed number of days for the second, a clear scope for the third.
Questions
Is a percentage commission always more expensive on large orders?
It grows with the order value, while a daily rate or project fee does not. Whether it ends up larger depends on the figures in the quotes; the break-even goods value shows where the two cross.
Should the commission be charged on freight as well as goods?
That is a term to agree in writing. Ask which amount the percentage applies to before you compare quotes, because the same percentage on a wider base is a larger fee.
Can I ask an agent to quote in a different structure?
You can ask. An agent who normally charges a commission may give a project fee for a clearly defined task, and the comparison becomes simpler when both quotes use the same structure.
Sources: this article describes fee structures in general terms and cites no rate data. Figures in any worked comparison come from the reader's own quotes.