To help you find the ideal sourcing agent for your business, we compiled this helpful checklist:
Step 1: Define what you need
The first step is to become aware of what you need and what requirements you have for your sourcing agent and supplier. It’s helpful to write a document describing what is important to you.
With your sourcing agent, this includes the scope of services, language skills, location, level of experience, payment model, etc. Your requirements to the manufacturer should also be clearly defined: Which working conditions should prevail, which material type and quality should be used, how long should the delivery times be etc.
Once you know all this, you can continue with step 2.
Step 2: Set your budget
In the second step, you should think about your budget.
How many units do you want to produce, how much can you spend on your products and how much can you pay your sourcing agent? It is best not to set a 100% fixed budget, but a range, as unexpected costs can always occur.
Step 3: Choose a type of sourcing company
As we have seen before, there are different types of sourcing companies.
Each type has its own advantages and disadvantages. Decide for yourself whether you prefer to work with a single agent, a larger sourcing company or a full service sourcing & logistics company.
Step 4: Research & Compare
Now that you know what you need and what kind of sourcing agent you want to work with, you can start your research.
But don’t just google and use the first result that pops up. Rather use platforms where you can read different independent reviews from other sellers,
Then pre-select 3-4 sourcing agents that meet the criteria you defined in step 1.
Step 5: Get different offers & ask for business licenses
Now get offers from the sourcing agents you already included in your pre-selection.
The offer should include the price for each service you want to use, the pricing structure and how the price is calculated.
Important: Get a copy of the business license together with the offers! Then choose the one that fits your requirements and budget best.
Step 6: Negotiate payments
Now that you have chosen a sourcing agent, you still have to negotiate payment with him. While larger companies usually have a fixed price structure, you can often negotiate a better price with agents who work independently.
Also, clarify whether the price for sourcing services will decrease over time when you re-order.
Step 7: Write down everything that was agreed on
In the last step, you should write down everything that was agreed upon.
Then both parties, i.e. you and the sourcing company, should agree (e.g. via mail or weChat). For example, it must be clear who is responsible in the event of poor production quality or if the delivery is delayed.
The type of payment and the amount should also be written down and confirmed by both parties. This way, you will have a document on which you can rely in case anything goes wrong.
A good sourcing agent will accomplish some combination of the following for you, depending on your own priorities:
Find you a manufacturer that can make your product, or tell you that is not possible.
Find you a manufacturer that can make your product at the quality standard you need, or tell you that is not possible.
Find you a manufacture that can make your product at the price point you need, or tell you that is not possible.
Not cause you to lose your vulnerable IP at any stage of the process. This means your sourcing agent should either not reveal your IP or turn you over to legal counsel to protect it.
Continue working with your manufacturer after it has been chosen to ensure high quality or even to ensure that your products are evolving to meet changing technologies or demand or whatever.
Look for a sourcing agent with plenty of experience and a proven track record. Becoming an expert takes time and the best qualifier is delivering results for clients. There are many different facets to sourcing products from China, so finding an agent that understands all of the moving parts is key. A top sourcing agent will be able to step in at any stage of the process and provide advice and solutions. Testimonials, reviews, and case studies are an excellent place to start when trying to gauge the experience of a sourcing agent.
Look for a sourcing agent that understands your industry and has had success sourcing the type of products you are looking for. Different regions within China specialise in different products, so it helps if the agent understands where to go for the type of products you seek.
Simply looking for the cheapest option isn’t a great strategy when looking for a sourcing agent, but you still want to know you are getting a good deal. There is significant variability in sourcing agent fees, so it pays to shop around. You might find that a certain type of fee structure works for you, more so than the pricing itself.