5 Percent


Here is a topic not really discussed much on the blog circuits.  5 Percent.  For the average Expat tourist, visitors and short timers in Vietnam, this probably does not mean much to you.

Unfortunately, whether you know it or not, the 5 percent rule is all around you.  You are affected.

When I dealt with potential American clients a couple years ago, they all laughed about the 5 percent rule.  I was helping them find some suppliers in Vietnam.  Each person they met all wanted a 5 percent commission.  Sometimes it may be higher then 5 percent.  If they were not asked about the commission, they found out later that one of their Vietnamese assistants were asked to give the 5 percent commission.

It can be quite ridiculous at times but it is quite common from business referrals, to hotel referrals to shopping and finally, yes to charities.  Sadly, charities in Vietnam are a good way to make money and a 5 percent commission, especially in Hanoi and HCMC.  That is one primary reason why Vietnamese, in general, do not trust charities.

How to know if somebody is getting a commission from referring you?  It is quite easy.  Many times “friends” will give you a business card of, lets say a shop, and then either right their name on it or just leave a mark.  Some friends just go with you.  After you make a purchase, they will come back to the shop later for the “agreed” upon commission.  This works for hotels, restaurants, travel agencies, you name it.

Your staff may receive a “commission” when they purchase an airline ticket for you.  I know some grab business cards from taxi drivers for referrals and a commission.

Investment funds and securities firms have commissions of various percentage ranges.  In the past, directors and investment fund managers have been able to make a little extra money on the side through these commissions.

Some Vietnamese and Expats residing in Vietnam are very eager to help visitors to Vietnam find shops, hotels, taxis, etc.  I still have not figured out how they can keep track of the commissions owed them.  It is good business and that is why they do it.

I am curious to hear your stories in regards to the 5 percent rule.  I know there are a lot of them…