Agent Policy
(I) Regional exclusive agency
1. Term
Exclusive Agency Contract or Special Agency Contract is valid for one year.
2. Agents definition
TIANXS has following agents in 2010:
A. Exclusive Agents in the provincial administrative region
B. Special Agents in secondary regions
Note: the region refers to the administrative regions under or above the prefecture level
(II) Application program
1. Agents qualification
A. Applicants must be authorized by their Business License to implement the business of our products, their Business License, Tax Registration Certificate and Organization Code Certificate shall pass the annual inspection of corresponding industrial and commercial bureaus, and applicants shall also be the general taxpayer;
B. In order to apply for provincial regional exclusive agency, applicants’ registered capital shall be not less than RMB 500,000; and to apply for the special agency of secondary regions, their registered capital shall be not less than RMB 300,000;
(III) Responsibilities and obligations
1. TIANXS responsibilities and obligations
A. Supplying products to satisfy market needs and establishing the uniform marketing network system which shall be operated in normative ways;
B. Responsible for training agents about products and marketing knowledge;
C. Assigning business personnel to instruct agents’ sales management;
D. Responsible for supplying management information and materials for agents;
E. Convening regularly National Agents Meetings to exchange sales experience;
F. Responsible for cracking down on all types of illegal market behaviors to maintain agents’ interest;
G. Responsible for assisting agents to implement promotional activities;
2. Agents’ responsibilities and obligations
A. Agents can only sell our products within regions specified in contracts to prevent cross-regional business;
B. Agents shall complete sales target and network development goals specified in exclusive agency contract, and maintain the uniform market price;
C. Agents shall provide series of reports and market information in written form to TIANXS headquarters;
D. Agents should actively collect market information of competitors’ relevant products;
E. Agents are obliged to provide successful materials and experience to TIANXS headquarters and other agents;
F. Agents should actively maintain commercial interests, image and business reputation of TIANXS, and shall also maintain the market order;
G. Agents are obliged to develop and manage subordinate agents to improve the market coverage and share;
H. Agents shall strictly comply with TIANXS Agency Management Rules;
I. Agents shall provide the sales assistance and service for subordinate agents, franchisees and outlets developed by themselves or managed by themselves based on TIANXS authorization in accordance with TIANXS requirements.
3. Confidentiality
A. TIANXS and agents have the obligation to keep business secrets of opposite parties. The confidential information includes all conventions and sales policies in agency contracts, pricing system, products, product development strategies and corporates’ development direction and others; and the party who fails to fulfill its confidentiality obligations should bear consequential losses of the other party;
B. Both parties still have an obligation to keep their trade secrets even after agents give up or terminate the power of attorney. Otherwise, one party’s loss caused by the
(IV). Sales Management
1. Pricing policy
A. In this year, the uniform national purchase price is applicable for all agents.
B. Agents’ purchase price is subject to the price published in the year, and the price adjustment will be informed to agents 10 day in advance.
C. Based on the uniform retail price, agents can adjust their local price depending on the particular local circumstances, but the adjusted price shall be not more or less than 5% of the uniform retail price;
D. TIANXS shall issue purchase invoices to agents for purchases within the month.
2. Contract sales and network coverage
Exclusive Agency (Special Agency) Contract will specify the sales quota, minimum sales volume and market shares of all agents, and see Attachment 4 for details
3. First purchases
The Exclusive Agency (Special Agency) Contract will specify the the first minimum purchase amount.
4. Return and replacement principle
The return system is implemented
A. All products with quality problems can be returned or replaced completely;
B. Agents shall ensure that all returned products are clean and tidy with complete package and are proper to be sold at second time;
C. Agents can return products after their return application is approved by TIANXS.
5. Transportation
A. TIANXS is responsible for the transport.
B. Delivery location: TIANXS warehouse
C. Arrival location: locations designated by agents
E. TIANXS delivers products ordered by agents in time, and agents shall inspect and accept products in the day when products arrive at the destination, and the damaged products found during the acceptance can be returned to TIANXS. All damaged products found after the acceptance shall be treated by agents.
(V). Development and management of subordinate network
In order to maintain and expand the TIANXS sales network, protect agents’ interests, increase market shares and expand market coverage, agents shall satisfy following requirements:
1. It is necessary for agents to develop the subordinate network;
2. TIANXS will assign salesmen to assist agents for developing secondary and retail customers.
(VI). Marketing support
1. Effective and initiative staff support
2. Effective and initiative training support
3. Support of terminal building (see details in Terminals Definition Standards and Cost Support)
4. Advertisement and publicity support (our company invests to implement the propaganda with printed materials and online Ads)
5. Marketing promotion activities (our company invests to help agents’ hold large riding activities, riding competitions, road shows and outdoor publicity)
(VII). Reward and punishment mechanism
1. Reward
A. Year-end Above-quota Reward: if the purchase amount in a whole year exceeds the agent’s purchase target, and then 2% of excess part can be returned to the agent;
B. Above rewards can only be used to offset the products payment;
2. Penalties and exit
A. Agents will be penalized in some ways including the deduction of margin, sales discounts, year-end rebates and the abolition of power of attorney if the following issues happen:
1) Inter-regional sales (malicious products fleeing);
2) Sales of other bogus or shoddy products with TIANXS brand;
3) Supply of false or seriously inaccurate information.
4) Sales price higher or lower 5% than the price specified by our company;
B. The exclusive agency right will be abolished if they have more than three times of violation records (margins will not be returned);
C. The exclusive (special) agency right may be abolished if they fail to reach the minimum contract sales at the end of year;
D. Exit voluntarily
Agents can apply to abolish the exclusive agency rights, and their left margins can be returned after following conditions are satisfied:
1) The Abolition Application is submitted one month in advance;
2) The products payment is settled;
3) There is no obvious behavior damaging TIANXS brands within one month after the application.
