Procurement Agent China – How One Can Help Your Business Grow
Procurement agent in China can help you avoid poor quality products and make more money by reducing cost. You also get instant access to proven manufacturers and clear communication.
November 25, 2021
China has become one of the hubs of low-cost country sourcing - a trend that involves procuring raw materials and/or products from developing countries at affordable prices. While many businesses engage in this kind of product sourcing on their own, many others simply can't. Businesses, especially those that are small or medium-sized, typically can't afford to devote resources to sourcing products from low-cost countries. In such a scenario, they turn to product sourcing agents or procurement agents based in China.
But what exactly does a procurement agent in China do? And how can such an agent help your business to grow? Read on to find out the detailed answers to these questions in this post.
The role of a procurement agent
Simply put, a procurement agent locates supplies and products on behalf of businesses at affordable prices. Their goal is to lower the production costs of businesses that they work with. A procurement agent may work independently with one business at a time, or own a company that employs several agents and works with multiple companies simultaneously.
You can expect a reputable procurement agent in China to have the following qualities:
Good knowledge of manufacturing hubs in the agent's home country: A good procurement agent typically has excellent knowledge regarding the various manufacturing hubs in his native country. For example, a China-based procurement agent has contacts at various factories and manufacturing hubs. They can reach out to these contacts for making inquiries regarding the availability of the raw materials and/or products required by a business. Even if a procurement agent's talks with representatives of one manufacturer breaks down, he can turn to others for securing a good deal.
Well-versed in different languages and excellent communication skills: A top-notch procurement agent is generally fluent in not only English, but in a variety of different languages. As China has become the "factory of the world", it has seen businesses from all parts of the globe turn to it for its cheaper labor and production costs. You can also expect a procurement agent in China to have excellent communication skills that he employs to secure good deals for businesses in foreign countries.
Excellent coordination skills: Procurement agents should have top-notch coordination skills, as they are required to remain in contact with different people from different backgrounds to secure good deals. A procurement agent that works with a business that needs to source multiple products and/or raw materials from China should have the sense to coordinate in tandem with different personalities. Having a cool and calm head is important, as the procurement agent must keep lines of communication open and positive between himself and his contacts.
Awareness of compliance rules and regulations: When a business sources its products and/or raw materials from another country, a lot of legal elements become a part of the equation. In such a scenario, it's down to the procurement agent in China to stay vigilant regarding potential lapses in meeting industry standards by the manufacturers. It's also the procurement agent's responsibility to make in-person visits to factories on behalf of the business he is working with.
Does your company need a procurement agent?
We've mentioned this already - it's not compulsory for your business to engage a procurement agent based in China. However, if your business is faced with one or more of the following circumstances, we recommend reaching out to a procurement agent in China:
Lack of dedicated staff for managing product sourcing: Small scale businesses work with limited staff. If you own a small-sized business, you may not have the staff required to supervise and manage the sourcing of products from a foreign country. In such a scenario, your business' productivity and operations may suffer if you have to go out of your way to manage the product sourcing all by yourself. That's why if your business lacks a dedicated team for handling the sourcing process, it's better to engage a procurement agent. Sure, it'll cost you more money, but trust us, it'll be well worth the investment in the long run.
Sourcing from multiple suppliers: If your business offers a wide variety of products to customers, you may not be able to source products from only one manufacturer and/or supplier. In this scenario, you may have to source the required products from multiple manufacturers. This means being in touch with all the suppliers consistently and simultaneously, which can go on to become a major headache for you. To make things simpler, we recommend engaging a company based in China that employs multiple procurement agents. Such companies have the manpower required to coordinate with your business and with the suppliers to ensure that the products are sourced in a smooth and seamless manner.
Inability to make in-person visits to China: China has some of the world's most reputed raw materials and product manufacturers and/or suppliers. But that doesn't mean that you don't have to supervise the sourcing process. Nowadays, many businesses only communicate with China-based manufacturers through virtual meets and conferences. While that's completely okay, we don't recommend solely relying on virtual meets, as quality issues may crop up. If you're unable to make in-person visits to the manufacturers you source from, you should get in touch with a procurement agent in China. The agent can make those in-person visits to monitor and supervise the work of the manufacturers and/or suppliers.
Benefits of a procurement agent
A middleman who will work for the interests of your business: The biggest challenge that you'll have to face if you reach out to manufacturers and/or suppliers, through platforms such as Alibaba, is dealing with middlemen. These middlemen will only look out for their own interests and will try to make as much money for themselves without sparing much thought for your business' interests. However, this is not the case with procurement agents. While technically procurement agents are middlemen, they aren't like the ones who only think about their own interests. Sure, they'll charge you money, but once you engage them, everything they do will be for the greater interests of your business.
Access to high-quality manufacturers and suppliers: When you conduct market research into the best manufacturers and/or suppliers based in China, you may end up being incredibly confused. This is due to the fact that there are so many manufacturers and suppliers to choose from, with all of them claiming to be reliable and high-quality. However, a procurement agent in China already has a network of top-notch manufacturers. Once you engage the procurement agent and give him your product specifications, he will know the right people to get in touch with. This gives your business access to reputable manufacturers and suppliers. There's no wastage of time, and the time taken to secure good deals is only a fraction of what it would take if you do all the work yourself.
Contract negotiations on your terms: If you negotiate directly with China-based manufacturers and suppliers, there's a high chance that the negotiations will go their way. However, what you really want is to negotiate on your terms, isn't it? After all, what's the point of sourcing products from a low-cost country if it isn't low cost, right? This is where a procurement agent in China can step in and make contract negotiations easy for you. Throughout the entire course of the negotiations, the agent will represent your interests and negotiate with manufacturers to ensure that you get the best deal. This is possible only due to the expertise of procurement agents, who have learned the art of negotiating after spending years and decades securing deals on behalf of businesses just like yours.
Bridging the cultural gap: The cultural divide between businesses in the east and in the west is pretty big. You may think that when it comes to business, this cultural divide won't make much of a difference. But trust us, it does. This divide will be quite evident to manufacturers and suppliers if you attempt to do the negotiations directly by yourself. However, when you entrust the responsibilities of negotiating to a reputable procurement agent, you can expect that cultural gap to be bridged. The best thing is that a procurement agent in China can speak Mandarin, which will in turn make them more trusted by manufacturers and suppliers based in China. This bridging of the cultural gap is what procurement agents do so well, and it is of immense value in the long run.
Timely product deliveries and avoiding inventory crises: When you choose to coordinate with manufacturers and suppliers in China by yourself, there may be lack of coordination. This is due to the fact that you'll have to pay attention to several other areas of your business as well. However, when you engage a procurement agent to handle the coordination, you can expect product deliveries to be timely. Most importantly, procurement agents will assess your business' supply needs and ensure that you are never supplied less than what you need. In the long run, this can help your business steer clear of potential inventory crises such as product shortages.
So, now that you know all about a procurement agent's work and the benefits of engaging one, we hope that you'll choose a reliable option for your business. Remember, procurement agents don't just present an opportunity for you to delegate your business' product sourcing responsibilities. They're also trusted in their native countries, which is why they can ensure that contract negotiations go your way. They are skilled when dealing with manufacturers and suppliers, and that's why they are some of the most prized assets for businesses these days. This is especially true when it comes to businesses sourcing products from low-cost countries.
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.