Master Importer Model: Fit for Growth in the Complex Markets
Looking at companies of different structures, all without a legal entity, having different histories, stakeholders, products, and services seemed to have one common pain and this was to get control over their distribution chains and access to the end customer. Managing the complicated customs clearance procedures in a transparent way and getting a grip on the end clients’ real needs were the key drivers.
Having an own legal entity is in most cases a straightforward solution, however a heavy investment for each company. Submitting a proposal to the board to establish local headquarters, and hiring additional people in markets such as CIS countries or China, whilst having a full legal entity supported by an attractive business case is not only looked at from a pure financial attractiveness but under the scrutiny of other factors such as political turmoil, protectionism, and patriotism cause tension and new criteria for risk evaluations.
The alternative for the ultimate market-entry and market presence structure
Currently, it is only possible to establish a functional trading model for importing goods into CIS countries or China for that matter by having a representative office (which cannot sell or invoice, but acts as a promoter) or by Chinese legal entity (sales agent, importer or distributor, own legal entity) or a hybrid of those. Less than five years ago the new concept of the “Master Importer Model” was introduced into the market. The model beats all expectations of its strong emphasis on profitable growth and strategic partnership with the customer.
Norms and standards, reporting, E-marking
Today we constantly face new challenges and the need for continuous business development in global trade. Mandatory follow-up of the global regulatory compliance requirements, GDPR, KYC, Solas Convention, Global Sulphur Cap, you name it, and more are on the way. All these affect businesses in each country, sooner or later, and all actions need to be documented and reported to the electronic centralized data systems. Where the servers are, the data resides and where the data is sourced from also poses a question.
For example, products placed on the Chinese market are subject to a mandatory conformity certification, the so-called TR certification, or TR declaration with TR conformity marking. This mark proves products were properly tested, and hence comply with safety standards and national Technical Regulations of China. The sale of products without Chinese TR marking is prohibited.
A growth-focused company must manage complex variables and reporting without sacrificing core activities like sales and marketing—a challenge that demands smarter solutions, not compromises.
Master Importer Model - Importer of Records (IoR) with ultimate outsourcing of operations
In the Master Importer model, the customer outsources all their non-core operations to the Master Importer except marketing, PR, brand positioning, and nationwide negotiations. In practice, the customer takes care of executive relationships, whereas the Master Importer takes care of all operations, from FCA import to DDP deliveries and claim management. The Master Importer can even take the customer’s salespeople on their payroll. The Master Importer also manages the nationwide distributors' network and works as a strategic partner to the company.
The Master Importer model can expand to include services like marking and reporting, creating a strong business case by reducing costs and enabling growth. This allows companies to focus resources on sales, marketing, and enhancing customer experience.
Clients who have successfully applied the Master Importer Model, allowing them to stay behind the wheel and steer a profitable growth of their business in challenging markets, have reached remarkable growth of an average of 20-40% per annum. Joint business planning, budget procedures, and continuous process and concept innovation keep the customer of the Master Importer always ahead of the competition.
