Find out what a sourcing agent is and if one can be a good fit for you.
For those starting a business, it’s of utmost importance to connect with a high-quality manufacturer that can supply the right type of materials for your product. Believe it or not, the manufacturer you work with will help form the very foundation of your business. They become a cornerstone of your overall worthiness—something that will ultimately influence how you are perceived by your customers. Working with a good supplier will result in acquiring superior-quality products, of which will translate into satisfied buyers and repeat purchases. If you are considering sourcing from China, then you should definitely get in touch with a China sourcing agent.
Globalization has dissolved geographical boundaries and opened up countless avenues for businesses of all types. Because of this China has become a major sourcing hub not only for the Southeast Asian countries but also for the western ones. The GPD of the country with a population of 1.4 billion was about $14.1 trillion in 2019. During the same period, exports and imports with China amounted to about $76.7bn, service exports totaled to $56.6bn, and service exports were $106.4bn (Source). Given its expansive market, importers across the globe can consider hiring a sourcing agent in China for their supplies.
Here are a few reasons why China has become an ideal sourcing destination for so many businesses:
Expansive supplier base: The supplier base of China is vast. While it certainly imports a significant chunk of materials and sub-components, the country is also home to countless factories that are engaged in the manufacturing and assembly of consumer products. China has a manufacturing network that supports a wide range of industries—be it textiles, apparel, electronics, toys, plastics, or automobile products. China resourcefully generates smart productivity by placing larger factory clusters along supporting manufacturing units. This pushes costs down and increases the efficiency of supply chains. Not to be overlooked; China has a robust infrastructure of ports, roads and railways, all of which lends support to its booming business environment.
Lower cost: This lower cost structure is one of the key reasons why so many businesses consider China as their main sourcing destination. Manufacturing has become an extremely viable option for the country because the cost of labor is low—a key component that provides significant cost advantages to factories here. Businesses can achieve good cost savings through molds and tooling, packaging, unit costs, and other engineering designs and functions. However, businesses have to be mindful of shipping, quality and total time to market because opting for too low of a low-cost sourcing strategy could prove detrimental to their overall product quality.
Increase capabilities: It is impossible to overlook the fact that China is one of the most technologically advanced nations in the world. Many of the factories in the country have superior manufacturing capabilities, sophistication, and efficiency. It’s not uncommon to come across a China sourcing agent who connects you with manufacturers that offer value added services which helps to push down the total cost of product development.
While so much has been spoken about China’s manufacturing capabilities and sourcing advantages, let’s get to know more about sourcing agents in China. A China sourcing agent can be a person or an agency that represents a purchaser to source materials and commodities, and buys them from a destination that the buyer cannot reach (for example, China in this context). The services of a sourcing agent in China can prove extremely useful when you are involved in international trade.
Speaking in a conventional sense, a sourcing agency can be treated as an entity that only sources supplies for the client, but the traditional role of a sourcing agent in China is to not only identify the right supplier, but to also negotiate the price, follow up with the production process, check the product quality, and ensure efficient and timely shipping. You can benefit greatly by choosing to have a full-time sourcing agent who can get your supplies from the China wholesale market and will also deliver to you, per your specifications, in a timely manner.
The basic function of every China sourcing agent is to identify, verify, and confirm a supplier that suits the needs of their clients. They will then negotiate the price with the supplier on your behalf and get the best price for your materials. Some individual sourcing agents are available on websites like Upwork or Fiverr. They are generally paid a fixed salary (either per day or on an hourly basis) or they may accept a fixed commission for a single consignment.
Essentially, the buyer (customer) pays the salary to the individual agent to get the supplier information. It then becomes the duty of the sourcing agent to provide the contact details of the supplier to his client–the buyer. After that, the buyer can choose to communicate directly with the suppliers for any ongoing negotiating of the price.
After identifying a trusted supplier, the China sourcing agent follows up with the production process. They coordinate with the staff working at the manufacturing unit and monitor the entire process. It is the job of the sourcing agent to ensure that production takes place effectively and completes on time.
Monitoring production, product testing and quality control— are all crucial functions performed by China sourcing agents. They coordinate with a specialized quality control company and inspect the finished goods for defects and deviances from specifications. Moreover, they ensure that the products are shipped to the buyer on time after keeping various logistics concerns in mind.
Finding suppliers and checking production are undoubtedly crucial functions of a China sourcing agent. But some highly organized agents will also have the capabilities to offer certain value added services to clients. These include product customization, packaging solutions, and free photography for various e-commerce platforms.
Like one stop shopping, the value added from these services should help reduce overall costs because you won’t have to hire an additional service provider to take care of these aspects. However, it’s important to work with the right China sourcing agent that strives to attain both adequate cost-savings while prioritizing that your desired quality is achieved.
You may consider getting a sourcing agent in China if you are faced with the following circumstances:
You should know that importing materials from an international destination like China isn’t always as easy as people say. There are several complicated procedures involved in the process—it can be quite daunting to embark into unfamiliar territory. You will need to get in touch with the right suppliers, take care of product and quality testing, as well as deal with shipping issues.
Lack of experience in any or all of these areas can make the task more challenging than it needs to be. You can ease the burden and fulfill all these requirements by getting in touch with a sourcing agent in China. The agent will take care of all these processes so that you won’t have unneeded stress added to your new venture.
You will surely need a sourcing agent in China if you wish to choose two reliable suppliers for your single product categories. Handling the sourcing aspect all alone can be a major hassle for you, especially if you don’t know the market. You may have to contact many suppliers to fulfill your requirement—something that can prove extremely tedious if you are just starting off with your venture.
To bypass the hassle of contacting several suppliers on your own, you can hire a sourcing agent in China. They will be able to consolidate your sourcing needs by connecting with the right suppliers that can deliver top-quality products at affordable prices.
There may be some products or materials that are hard to acquire. It could be an innovative consumer product, proprietary building materials, or restrictive medicine, etc. These special product categories are catered to by special suppliers because the ingredients or raw materials are only available to a select few. As such, finding a supplier for your specialty product category may be difficult.
This is when a China sourcing agent can come into the picture. They will know where to locate top-quality materials or ingredients for your product and should be able to connect you with the source directly if needed. You can then indicate your detailed specifications and ultimately strike a deal with the supplier.
Now that you know what a China sourcing agent is and how this individual can benefit you, it’s time to know a few ways to choose the right agent. The harsh reality is that China does have a blemish on it’s reputation due to manufacturing scams and even fraudulent sourcing agents. These agents often promise to provide goods of a particular quality at rock bottom prices but rarely live up to buyers’ expectations. This can be avoided if you use due diligence. In order for your business to flourish, it is crucial to carefully screen potential agents in your search to secure a reliable sourcing agent in China.
Below are some tips to follow while choosing a China sourcing agent:
A trusted and experienced China sourcing agent will be able to take care of the sourcing process as a whole. From getting the right price quotes from authorized factories to taking care of the shipment; your sourcing agent should know each step in the process verbatim. Do choose an agent that operates both a state side office and an office in China. Working with such an agent will help you get past the cultural and linguistic barriers, which will assist you in understanding the supplier market better.
It’s extremely important to verify the credentials of the China sourcing agent you intend to work with. While searching for sourcing agents, you may come across many options. Use caution while making your choice because not all agents will have the experience or the knowledge of the complete process. You should always take your time to research different sourcing agents in China and it is crucial to verify their credentials.
While verifying the credentials of your sourcing agent, you should check the following:
Chances are always high that the products you receive are of noticeable variance to the specifications you had initially given. To avoid such issues, you should insist that your agent provide you with a sample beforehand. It’s not always necessary for the first sample to meet your specifications, but subsequently you should not give the go-ahead for production without receiving an acceptable sample. If the products don’t match, you should certainly let the manufacturer know about it.
The sourcing agent in China that you choose should be able to get you in touch with dedicated suppliers and manufacturers. The agent should have the ability to bridge the communication gap which is imperative to ensure that the supplier understands your specifications clearly and manufactures your desired product. It’s the agent’s responsibility to provide you with a sample of the product and collaborate with the manufacturer to adjust it per your specifications.
You may come across sourcing agents in China who are not always well-versed with quality control. Ideally, it’s the agent’s job to monitor the quality of the manufactured products, so you should have as much background knowledge as possible to help yourself in locating a sourcing agent that fully understands the importance of quality control.
From the above discussion, it becomes clear that hiring a sourcing agent in China can prove extremely advantageous if you wish to explore China’s expansive business avenues. They can greatly simplify the sourcing process for you and they don’t always charge an arm and a leg to do so. Ultimately you minimize your business risks when you hire a China sourcing agent, with the added benefit of recurring cost savings every year.
Sourcing Allies is a team of expert China sourcing agents that has helped western customers manufacture and source products from low-cost regions since 2006.
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