NSSC Revises Distributors’ Commission System

Nippon Steel & Sumikin Stainless Steel (NSSC) announced on Wednesday the firm starts new commission system for distributors with direct transaction with the firm in mixture of fixed rate and fixed amount for stainless steel sheet, plate, bar and wire rod trading at home and abroad except for automotive industry for April order compared with current fixed rate system. The firm keeps studying to decide appropriate pricing for distributors’ functions after April. The firm will pay fixed rate commission for functions with variable distributors’ cost depending on selling price and fixed amount commission for functions with same cost in any selling price level. The firm expects the new system encourages distributors’ sales persons to develop new users due to higher commission. Selling price of stainless products depends on grade, gauge and surface finish while nickel price changes heavily the stainless selling price due to the high portion of raw materials cost. With traditional fixed rate system for distributors’ commission at 2% for domestic trade and 2.5% for export, the commission changes widely without change of functions depending on the stainless selling price. The traditional system doesn’t always rewards distributors’ functions including processing and delivery management even when distributors improve the function. The stainless steel maker reviews the functions through consultation with distributors to decide appropriate reward for each function. The firm will pay fixed rate commission for merchandise credit, interest cost for advance money to customers and price negotiation support while the firm pays fixed amount commission for order input agency, delivery management and information service for users and market. The firm revises the commission for distributors without direct transaction, which have role for some domestic sheet and plate sales to contract users. The firm also revises processing charge for some domestic sheet sales to contract users.