By now, it should be obvious who would benefit from a sourcing agent and their services and why it makes sense to use a sourcing service. Many people are not completely convinced and think they can save money working directly with manufacturers. However, it is important to consider a sourcing agent for the following reasons.
Initially, consider that many manufacturers are reluctant to work directly with overseas buyers.
From a communication standpoint, many manufacturers would rather use Mandarin Chinese and communicate with fellow countrymen familiar with the business world and structure. Doing so does cut somewhat into profits, but there is less headache from a communication standpoint.
Many manufacturers want payment upfront for raw materials, maintenance and worker salaries. Most overseas buyers will not pay until they have a product inspection in person or even after sales are complete.
There is also the question of time. Many times in Chinese production, lead times are exceptionally tight with many different things happening at the same time. The time it would take to communicate with an overseas buyer is simply too long in these situations.
A professional purchasing agent is familiar with manufacturers and their timelines. The agents can select appropriate manufacturers for their customers, saving time for the manufacturer and buyer equally.
Lastly, a purchasing agent can communicate product details correctly and summarize the buyer’s needs via the Product Requirements Document – a tool that invaluable from keeping errors and mistakes in the order chain.
Ordering, paying for and shipping products from China is much more complex than many consider. Many things like the right supplier, production follow up, testing, quality control, logistics and the like are all important and vital.
There are tariffs, taxes and customs paperwork for when the products arrive in the destination country. If you are unfamiliar with any of this, your product order will be delayed, returned or even destroyed leaving you empty handed.
Even if you may have some small understanding of overseas purchases, export and import, a sourcing agent will streamline the process for you.
If you are looking for a single product to source from China, you may need to make contact with over ten potential manufacturers. The more products you wish to sell, the more contacts you will need to make. A sourcing agent will not only find the proper manufacturers but also consolidate your product order for ease of import.
The idea that a large company has no need for sourcing agents is ludicrous. In fact, the exceptionally complicated supply chains mean a sourcing agent will streamline their processes.
A grocery chain, for example, needs thousands of products in multiple categories. It is not possible to purchase every product individually.
Even large, multi-national chains like Walmart have sourcing agents and trading companies.
There are some products that require specialized manufacture and inspection. A sourcing agent is absolutely necessary in this case.
A sourcing agent will find the manufacturer best suited to you and your specific product. This is because they have already worked with a number of different businesses and products. Over time, the sourcing agent has built a solid network of contacts and businesses.
The agent will make sure all of your order is complete, in full compliance with local customs, has all applicable taxes and tariffs paid and shipping to your specified location. Covering all of this means the opportunity for mistakes are considerably lessened.