A service Tmall Partner runs your store for a monthly fee plus a cut of sales. You own the stock and you set the price. A buy-out partner buys your stock and sets the price itself, because the sale is now its sale. Decide how much control you need first, then pick the partner.

Most foreign brands meet the Tmall Partner agency vs distributor model question in the first meeting, when the partner asks whether you want to sell to it or sell through it. Every figure below was checked on September 24, 2026.

A Tmall Partner, or TP, is an outside company that runs a store on Tmall Global, Alibaba’s cross-border marketplace, for a brand. Some TPs sell only their service and others only buy stock. Some do both, and a few add consignment, a third arrangement that sits in between. Our guide to finding a Tmall Partner covers how to vet one. This piece covers which deal to sign with it.

Line	Service TP (代运营)	Buy-out TP (经销)	Consignment
Who owns the stock	You, until a shopper buys it	The TP, once it pays you	You, stored in the partner’s warehouse
Who sets the retail price	You	The TP	You
Who holds the store	Your overseas company	The TP’s overseas company	Usually you; check the contract
Cash you put in	About 480,000 RMB of deposits and prepayments before the first order, plus the stock, plus the TP’s fee	Your stock, sold to the TP at a discount; often a marketing contribution	The stock, plus the partner’s warehousing and service fees
What goes wrong	The retainer eats a small store alive, and a commission on sales rewards discounts	The TP discounts to clear stock and you cannot stop it	Slow stock sits in someone else’s warehouse, still on your books

Cash line: TheChinaPath calculator data, September 2026, food category.

Agency vs distributor in Tmall Global’s own rules

Tmall Global certifies the outside companies that run stores on its platform, and it sorts them into two groups.

A distribution-type partner (经销类服务商) is not the brand itself, and all of its stores work with the brand on a distribution basis. An operating partner (代运营服务商) is not the brand either. It runs at least one store that a different company opened, under an operating arrangement, and it already operates one or more stores on Tmall or Tmall Global. Source: Tmall Global service provider market (天猫国际服务市场), service provider certification process (天猫国际服务商入驻认证流程), September 30, 2025. https://globaltp.tmall.com/import_tp/TP/informationDetail?id=788

Ask any TP which certification it holds, and which company will be the registered seller of the store it proposes. Both answers should match the model in the contract.

The line matters because of how cross-border retail works in China. The company that sells to the shopper is the company that owns the goods.

Under China’s cross-border retail import rules, the seller to the Chinese shopper is an overseas-registered company that owns the goods, and it carries primary responsibility for product quality and safety, returns and recalls. Source: Ministry of Commerce (商务部) and five other bodies, 商财发〔2018〕486号, November 2018. https://www.gov.cn/zhengce/zhengceku/2018-12/31/content_5437823.htm

Under the service model, your overseas company is that seller and the TP works for you. Switch to buy-out and the TP’s overseas company becomes the seller, with your brand as one of its products.

In practice the labels blur. A company stays in the distribution group only while every store it runs is a distribution deal. One operating store moves it to the other group, even if it still buys stock for its other brands. So the certificate tells you what the company does somewhere. It doesn’t tell you which deal it’s offering you.

The contract settles it with one line: who pays for the stock, and when.

Who sets the price under each model

China’s accounting rules draw the line in the same place the contract does.

A company that controls the goods before they reach the customer is the principal in the sale and books the full amount. Otherwise it is an agent and books only its commission or fee. The signs of control include carrying the inventory risk before or after the sale and having the right to set the price on its own. Source: Ministry of Finance (财政部), Accounting Standard for Business Enterprises No. 14, Revenue (企业会计准则第14号), article 34, 财会〔2017〕22号, July 2017. http://m.mof.gov.cn/zcfb/201707/t20170719_2653110.htm

A buy-out TP passes that test. It owns the stock, carries the risk and books the whole sale, so the price is its call. A service TP books a fee. Under consignment the goods stay yours until a shopper buys them, which leaves the partner on the agent side of the line and the price with you.

A price floor written into a buy-out contract is legally shaky.

China’s Anti-Monopoly Law bars an operator from agreeing with a trading partner to fix the resale price or to set a minimum resale price, unless it proves the deal has no anti-competitive effect or its market share is below a threshold the regulator sets. Fines run from 1% to 10% of the prior year’s sales. Source: Ministry of Commerce (商务部) policy database, Anti-Monopoly Law (反垄断法) articles 18 and 56, as amended June 2022, in force August 1, 2022. https://policy.mofcom.gov.cn/claw/clawContent.shtml?id=97047

A suggested retail price is fine. Getting a buy-out TP to hold it through Double 11 (China’s November 11 shopping festival) with a full warehouse is another matter.

The service model has a price problem of its own. A service TP usually takes a cut of GMV, the gross value of sales (10% in our calculator). A partner paid on GMV gains from volume, and discounts buy volume. Write your price floor into the brief and hold the store to it every week.

What each model costs you in cash

Then there’s cash, and the service model needs a lot of it up front.

Our Tmall Global calculator starts a food store at a 50,000 RMB platform deposit, a 30,000 RMB annual fee, a 100,000 RMB bonded warehouse deposit and a 300,000 RMB tax prepayment. That is 480,000 RMB before the first order, 450,000 RMB of it refundable, and the stock and the TP’s fee still come on top.

Store size shows up in the TP fee, which the calculator sets by default at 35,000 RMB a month plus 10% of sales.

First-year sales, RMB	TP retainer, RMB	TP commission, RMB	Total TP cost, RMB	Share of sales
1,000,000	420,000	100,000	520,000	52%
3,500,000	420,000	350,000	770,000	22%
10,000,000	420,000	1,000,000	1,420,000	14.2%

TheChinaPath calculator data, September 2026. These are the model’s default fee settings, a yardstick for real quotes, which move both ways.

At 1 million RMB of sales, half the revenue goes to the partner before you pay for ads or stock. Run the same retainer against a store that sells ten times as much and the partner’s share falls to about a seventh. That arithmetic is why small brands get steered toward buy-out and large ones rarely are.

Buy-out moves the risk to the TP. It pays for the stock, waits for it to sell and absorbs the markdowns when it doesn’t. It prices that risk into what it pays you.

That price is negotiated deal by deal. Ask the TP to show its build: the landed cost of your goods, the retail price it plans and the margin it keeps in between. The margin should be wide enough to cover slow stock. Much wider than that, and you’re the one paying for its room to discount.

Which model fits your brand

Start with the sales plan. Below about 1 million RMB in year one, the calculator’s default fee takes half your revenue, and a buy-out deal or a smaller retainer starts to look sensible. At 3.5 million RMB the same fee is 22% of sales, and control gets cheaper with every step up from there.

A brand with cash and a price worth defending should be the seller of record. That goes double if gray-market sellers watch your European price list, or if you want the customer data.

Buy-out suits a brand testing China on a small budget, in a category where price is not the brand. It also suits a company that already sells to distributors at home and thinks in sell-in.

Consignment is a trial run. You keep title and price while the partner keeps the warehouse, so neither side has sunk much.

Our comparison of a China distributor vs your own store prices the wider version of this choice.

Switching models after you sign

Service to buy-out is the simple move. You sell the TP your stock, at a discount, and your own store goes quiet or closes.

Going back is where brands get stuck. A buy-out store belongs to the TP’s company, and it cannot hand the store to you on a whim.

A Tmall Global merchant may not transfer its account, or let anyone else use it, without Tmall Global’s prior written consent. Source: Tmall Global Merchant Service Agreement (天猫国际商户服务协议), clause 5.1, last updated October 2022. https://terms.alicdn.com/legal-agreement/terms/suit_bu1_tmall/suit_bu1_tmall202111051504_43705.html

So the switch usually means a new store in your own name, with no reviews and no sales history. It’s the story we hear most when a brand calls to replace its TP. Write the exit into the first contract: a notice period, a buy-back price for stock left in the TP’s warehouse, the date its store stops selling your goods and the handover of your product photos and listing copy.

Frequently asked questions

What is the difference between a Tmall Partner agency and a distributor?

An agency, or service TP, runs your Tmall Global store for a monthly retainer and a commission on sales. Your company stays the seller, so the stock and the price are yours. A distributor, or buy-out TP, buys your stock and resells it through a store its own company holds. From then on the retail price is its call.

Can I set the retail price if my TP buys my stock?

You can suggest one. China’s Anti-Monopoly Law bars agreements that fix a reseller’s price or set a minimum resale price, with narrow defenses for deals that don’t restrict competition or for small market shares. Fines run from 1% to 10% of the prior year’s sales. Treat any price clause as a legal exposure.

How much does a service TP cost?

Our calculator’s defaults are 35,000 RMB a month plus 10% of sales, which comes to 770,000 RMB a year at 3.5 million RMB of sales, or 22%. At 1 million RMB of sales the same terms take 52%. Real quotes move both ways, and paid media comes on top.

Is consignment the same as the service model?

Close. In both, you own the stock and set the price. Under consignment the partner also warehouses and ships your goods and bills you for it. That suits a trial, since neither side buys stock it may not sell. Confirm who holds the store account before you sign.

Once you know the model, Compass finds the partners that run your category that way.

Get a shortlist of Tmall Partners that run your category, in the model you want