China probably sells more manufactured goods than any other country in the world. Manufacturing is often referred to as the “factory of the world” and drives a country’s economy.
Due to its low cost, China is one of the most important manufacturers of industrial products. Sourcing from China can be a good decision if you want your business to be cost-effective. However, language barriers and mixed business practices can be a hindrance for many foreign buyers, not to mention the wide variety of products to choose from. This is when a purchasing agent can greatly benefit you.
If the concept of a purchasing agent is new to you, let us help you. The simplest definition of a purchasing agent is a third party that helps you find suitable suppliers in a specific country. Generally, purchasing agents are familiar with business practices and customs in the country and may also speak the local language.
A simple internet search can throw up a huge list of purchasing agents. How do you know which one is right for you?
Things to Consider When Choosing a China Sourcing Agent
The location of the sourcing agent
The experience of sourcing agents in China
Check reference
Get the required documents
Check how they handle quality issues
Have the necessary licenses
Check language ability
Expertise in the product you want to buy
Choose a sourcing agent with good ethics
How to find the right China sourcing agent for you?
Record exactly what you need
Set a budget
What are the benefits of being a sourcing agent in China?
Save time
The communication link between you and your supplier
Help negotiate
Verify the manufacturer’s credentials
Huge connection network
Conclusion
Things to Consider When Choosing a China Sourcing Agent
When choosing a sourcing agent in China, there are a few things you need to keep in mind to make the right choice.
The location of the sourcing agent
Find the location of a sourcing agent when you browse Google’s list of sourcing agents in China. Are they Chinese, or are they foreign companies with offices in China? Doing business with foreign companies is much easier than doing business in China. China has strict internet policies which can make it difficult to check the credentials of your Chinese sourcing agent.
When you choose a foreign sourcing agent, make sure they have a fully staffed office in China. Be sure to check how long the office has been operating in China. Choose a purchasing agent with a proven track record.
The experience of sourcing agents in China
There are huge differences in the way Chinese companies and Western companies operate. These differences are mainly attributable to differences in culture, customs, and ways of thinking. It is wise to choose a purchasing agent with many years of experience in China. Sourcing agents with extensive experience working in China will have a large network of reliable contacts that are vital to your business.
Check reference
Choose a purchasing agent who can give you real references from other businesses. Make sure you take the time to talk to these references and check out their websites. Please find out how long they have worked with purchasing agents and the quality of their offerings. Ask if they would recommend a purchasing agent.
Get the required documents
Your purchasing agent should be able to provide you with relevant documentation for the purchasing and shipping process. The language on the document will give you a fair idea of how proficient the agent is with the entire process. The documents usually provided by purchasing agents are the certificate of origin, bill of lading, fumigation certificate, and detailed packing list.
Check how they handle quality issues
When sourcing products from abroad, the quality of the product is paramount. Check with the purchasing agent what measures they have in place to deal with quality issues. Make it clear from the outset that you will not accept a product of substandard quality.
Have the necessary licenses
All businesses in China are required to obtain a trade license. Chinese laws are very strict and you can only conduct certain types of business on certain licenses. Don’t forget to check their licenses before you start working with a purchasing agent.
Check language ability
The ideal purchasing agent should be proficient in both English and Mandarin. Make sure your primary contact has good written and spoken English. Ideally, the Chinese office staff is also proficient in English as you may sometimes need to talk directly to them.
Expertise in the product you want to buy
Different purchasing agents have different areas of expertise. You must check that your purchasing agent has prior experience sourcing the product you are interested in. You can ask your agent for previous order records, or you can ask for buyer references. You may not find a purchasing agent that handles only one product. So ask for buyer references that are in the same industry as yours.
Choose a sourcing agent with good ethics
We’ve heard of several purchasing agents taking rebates from suppliers. Such an agency may help you find suppliers faster, but the quality of the product may be questionable. Make sure you only say yes to suppliers that meet your quality and certification specifications.
China Sourcing Agent
How to find the right China sourcing agent for you?
Now that you’ve narrowed down your list, we’ve put together a helpful list to find the right one for your business.
Record exactly what you need
Create a document listing your purchasing agent and supplier requirements. Take the time to make sure you have listed all the requirements. Remember that business practices vary from country to country. Don’t assume something is understood just because it’s your country’s standard.
For your purchasing agent, you must include the scope of service, experience level, location, language ability, and payment structure. Make sure you also define your requirements for supplier working conditions, material type, quality, and lead time.
Set a budget
Your budget is an important factor in choosing the right sourcing agent for your business. Remember to be flexible with your budget, as unexpected expenses can arise at any time. Make sure you determine the number of units you want to produce. Also, determine the price you want to pay for your product and how much you are willing to pay the purchasing agent. Be realistic.
Determine the type of sourcing company you want to do business with
Purchasing agents can be divided into three categories:
Single Purchasing Agents: These agents work independently. The advantage is that they won’t be working with too many clients at a time, so maybe able to develop a personal relationship with your business. The downside is that a person’s network may also be limited. It is difficult to verify one’s credentials, which magnifies the risk.
Purchasing agents: These purchasing companies employ several purchasing agents, each with their own area of expertise. These companies have more resources and therefore a larger network of suppliers. On the downside, these companies tend to be more expensive than individual purchasing agents.
Purchasing and logistics companies: These are usually larger companies and purchasing is one of many departments. These companies usually also provide logistics and quality inspection services. The biggest benefit is that all your tasks—from finding suppliers to shipping products to warehouses—can be done by one company. The downside is that they can be very expensive. Also, relying on one company for all your needs, especially logistics, comes with its own risks.
Since each type of purchasing agent has its own pros and cons, you need to decide which one is best for your business.
Research your purchasing agent
When researching your buying agency, don’t limit yourself to Google. Most of us tend to use the first result that pops up on Google. Instead, use other platforms for in-depth research. You should read reviews from other sellers and buyers. You should be able to narrow down your choices based on reviews and testimonials.
You should also talk to their referees to learn more about their service and product quality.
Request a written quote
In order to get the best price, it is wise to choose several purchasing agents. Ask each of them for a quote, including the price of each service, how the price is calculated, and the different payment structures they offer.
Don’t forget to ask for a copy of their business license. Choose now the quote that best suits your requirements and budget.
Try to negotiate a price
Once you’ve shortlisted an offer, try to negotiate a price. Larger companies usually have fixed prices. However, they sometimes have some wiggle room for discounts, which can sweeten the deal. Negotiations with independent purchasing agents can be better as their payments are more flexible
You may also want to know if the price will drop if you reorder.
Record everything you agree to
To avoid disagreements in the future, make sure to record everything you agree to. Document important factors such as what happens when a product is received of poor quality or a shipment are delayed.
Confirm the payment structure, including the amount and type of payment for both parties. Documentation is always helpful if things don’t go the way you expect.
What are the benefits of being a sourcing agent in China?
Many businesses are reluctant to use purchasing agents due to fears of unprofessional and unethical behavior. However, when you use the right sourcing agent, the benefits far outweigh the risks.
Here are some of the benefits of using a sourcing agent:
Save time
With a reliable purchasing agent, you can save a lot of time because you don’t have to rummage through supplier pages to find the right supplier. You also save a lot of time that you would otherwise spend vetting suppliers and negotiating for a long time. Your purchasing agent will handle all of this to save you valuable time.
The communication link between you and your supplier
When choosing a supplier, you need to provide a brief description of the product you want. Considering the language barrier between you and the supplier, your purchasing agent can help you fill in the exact details.
Help negotiate
When sourcing from China, the idea is to get a lower price than what is usually available domestically. However, when the price is too low, the quality of the product can be questioned. This is where a good purchasing agent can strike a balance. They can get you a good deal, but not so low that it compromises product quality.
Negotiations are easier when you have purchasing agents because they speak the local language. They understand Chinese culture and customs. As a result, negotiations with purchasing agents are faster and more efficient.
Verify the manufacturer’s credentials
It’s a good idea to check the manufacturer’s credentials before starting a business with the manufacturer. Note that all their certificates and licenses must be in Mandarin when you ask them. If you need to verify them, you will first need to pay for a professional translator to translate these documents. This in itself is quite expensive. It’s also possible that the manufacturer just handed over a bunch of fake documents.
When you hire a purchasing agent, they know exactly what the original certificate will look like. They understand the requirements that inspection agencies and manufacturers must meet. With a purchasing agent, you can greatly reduce your chances of being cheated by your suppliers.
Huge connection network
In addition to their services, you also pay a sourcing agent for their experience and vast network of contacts. Since they work with multiple suppliers, they know exactly which one is right for you.
Conclusion
If you are considering sourcing products from China, finding the right China sourcing agent is a crucial step. Getting quality products at the right price and time can help your business leapfrog. Take the time to choose the right purchasing agent. The future of your business depends on it.
Most importers are content to begin working with a supplier following a supplier review. But there are several other types of audits common in manufacturing that some importers insist on conducting, such as:
1 Social compliance / ethical sourcing audit – importers distributing through various retailers, such as Target and Walmart, often require this type of audit to ensure their supplier meets the retailer’s requirements. Auditors check areas like workplace safety, labor practices wages and social benefits (related: How Importers Meet Walmart Ethical Sourcing Standards).
2 Good manufacturing practices (GMP) audit – this audit is common among manufacturers of food products, medical devices, cosmetics and pharmaceuticals. The U.S. Food and Drug Administration (FDA) and the World Health Organization (WHO) commonly set guidelines for GMP (related: GMP Audits and Why Manufacturers Need Them).
3 Customs-Trade Partnership Against Terrorism (C-TPAT) audit – this is less common among audit types and seeks to confirm the security of a manufacturing facility. Auditors will check for monitoring of computer access, inspection of incoming trucks, security training of facility staff and other areas.
No matter which type you choose to conduct, an audit before beginning production goes a long way in evaluating a potential supplier. Audits not only can identify potential problems in a factory. They can also help you choose the best supplier to begin sourcing from China.
There are many types of agents ranging from buying agents to inspection agents to shipping agents. But regardless of what type you are looking for, here are some tips:
Tips for selecting a third party service provider:
1. Are they a legitimate company with proper business licensing?
2. Do they have a clear track record of performance? If they can’t give you some client references, run away. That is a very big red flag.
3. Are they focused on a certain set of services or do they try to do everything for everybody? Yes, even the third party service providers have been known to outsource to others just like some factories outsource production without telling the buyer.
4. Is their pricing structure and service agreement well defined and transparent?
5. It is a major pitfall to do business with a third Party service provider without a clear contract in place that outlines the service, costs, time frame and other desired attributes of the partnership.
Let me talk about what qualifies as a good sourcing agent. You can use these points to judge the sourcing agents you are using now or find a good sourcing agent in the future based on these points mentioned below.
a. Communication: Fluent English, High-efficiency
A good sourcing agent must have a strong command over English in both writing and speaking and should be able to communicate with you smoothly by phone and email. Smooth communication is the foundation that helps develop cooperation and seamless workflow.
Ability to communicate fluently and confidently in English also reflects that the agent can be trusted to carry out his tasks efficiently and with ease. On the other hand, if your sourcing agent’s English is weak, it will only cost you time as you will have to communicate your requirements time and again until he understands them correctly.
A good sourcing agent must also be highly-efficient and prompt in responding to the emails. There is a time difference between China and most countries. China is 12-15 hours ahead of the US and is 7-8 hours ahead of Europe.
Usually, your questions will not be answered until the next day. If your sourcing agent never responds to your emails and messages after work or on weekends, they are not a good fit.
b. Understand your requirement
In addition to knowing English, it is also essential for the sourcing agent to be quick in understanding the precise requirements of his clients.
For example, if the product is complicated and you require a little customization with the material or redesigning some parts, the sourcing agent must be able to understand your requirements so that he can convey the same to suppliers.
They can communicate with the factory on behalf of you according to your product ideas. If your sourcing agent can‘t understand your real need very clearly, then it will take more time to modify the product back and forth.
c. Professional product knowledge
There are two main types of sourcing agents, and you need to choose an appropriate sourcing agent according to your own needs. One, those who assist in finding a particular kind of product, such as drugs, machinery, etc. and the others are who specialize in finding products of daily use for consumers.
Sourcing agent who specializes in finding suppliers of a specific type of product needs to have a good understanding of the products and relevant professional knowledge as well. Customers who come to procure such products are professionals with sound knowledge of those products. The knowledge and experience of the sourcing agent should at least match his customer so that he can understand client requirements and deliver the same.
The agents who deal in all kinds of products have an extensive network of cooperative factories and suppliers. So, they can find the best suppliers for the products you want in a very short time. If you open a supermarket in your country and need hundreds or even thousands of different categories of products, the procurement management can be challenging. In this case, sourcing agents that specialize in providing all kinds of products can prove to be an asset.
d. Professional import & export experience
Any good sourcing agent must have a good understanding of the legalities and paperwork involved in import & export. This includes the process of import & export, certificate and document requirement, licenses, etc.
The agents should also know about international transportation. They should have an understanding of what kind of products can’t be transported by air or by sea, or what type of compliance certificate is required for air transportation. In addition to this, the sourcing agent should have knowledge of patents to avoid potential inconvenience while importing.
China becomes the top sourcing destination for majority of the countries because of its revolutionary rise of manufacturing processes. Many top countries like India, US and many other countries are approaching the China for sourcing the products. But, the main issue that everyone was facing with China was poor quality offering by some middle men of different companies. Actually, China provides the best quality and best cost to its customers. These companies taking away the reputation of the Chinese sourcing.
Many people just looking at the cost of the product sourcing and didn’t bothering about the various quality of the raw materials to the manufacturing capacity availability. This makes the buyers to step on the wrong side of the path and facing many problems related to the quality of the products. So, the best thing that every buyer must go with is searching a right sourcing agent. Many companies offer good sourcing agent services for the buyers.
Capabilities of Chinese sourcing agent are
Fluent in Chinese mandarin language
Proficient in business culture and the knowledge related to it
Managing of the suppliers in china
Experience in sourcing process
Experience in Quality controlling process
Also provides an experienced person in Audit as well as in Logistics
The above qualities must be required in a right sourcing agent to maintain upon product quality and supervision.
The entire world is familiar with the manufacturing capabilities of China based industries. One of the leading goods production hubs of the world, China offers highly competitive rates for all kinds of products, which is what makes it the preferred destination for sourcing goods. Issue arises when buyer countries/companies have apprehensions about quality. It is precisely to address this need that。
We are the best sourcing agents in China, capable of providing you with the highest quality manufactured goods at attractively affordable prices. Our entire network is comprised of quality manufacturers that strictly and diligently adhere to global quality standards.