If you’re importing from China and researching around the topic, you’ll have likely heard of sourcing agents. In this post, we will be exploring the use of sourcing agents and helping you to determine whether using a sourcing agent would benefit your business.
Finding a high quality manufacturer is the often one of the first steps for starting up your importing business — and it’s definitely one of the most important. Your manufacturer is the foundation of your business; they control your stock, which controls how customers view and interact with you. A good supplier means: high-quality goods, happy (and hopefully repeat!) customers, good reviews and more purchases. A bad supplier? Low-quality goods, dissatisfied customers, negative reviews, returns, a bad reputation and an unsuccessful business.
Sourcing agents are a shortcut to finding your ideal supplier. They cut out all the leg-work that you would have to do and negate a lot of the risk involved in trying a new factory.
What is sourcing agent or buying agent?
Sourcing agents are third party services that you can hire to find high quality suppliers in their native country on your behalf. They speak the language and are familiar with the customs. They liaise with the supplier — and they’re able to visit the factories and complete onsite verification. This means that you do not have to find a supplier yourself and it’s a way for you to minimize the risk of importing low quality goods.
Why should I use a sourcing agent?
There are many reasons to use a sourcing agent but the main one is that you are more likely to find a high quality product quickly and efficiently.
When sourcing from Asia, the reputation for producing low quality goods and prospect of the uncertainty that comes with having a supplier on the other side of the planet can be enough to put first time importers off. A large part of ensuring that the goods you receive are of a high standard and able to be resold in the country is finding a high-quality supplier. Sourcing agents are able to do this on your behalf and a lot more efficiently than you will often be able to.
What are the benefits of sourcing agents?
The main benefits of using a sourcing agent to find a supplier for you to use all center around the fact that sourcing agents live in your supplier’s native country. They are from your supplier’s country — and they know how to navigate it far better than you will.
Finding new products and suppliers.
Audit existing suppliers.
Manage negotiations and draft agreements.
Perform factory inspections and quality control.
Manage shipping and logistics.
What can go wrong without a sourcing agent?
Many businesses are in need of a helping hand when importing from China. This is when the purchasing agent (or sourcing agent, procurement agent etc.) becomes relevant. He, she, or the company, that acts as a purchasing agent shall be your right hand and an incorruptible ally on the front line in China.
However, It’s not a protected professional title and anyone can call him or herself a purchasing agent. If you don’t make an informed decision when selecting a purchasing agent you might end up losing a lot more than the commission or service fee.
Are there any pitfalls to using a sourcing agent?
Although using a sourcing agent can be a great way to ensure you’re sourcing from a trust-worthy supplier, there are a few drawbacks.
Blind mark-up. Sourcing agents are a middleman. This means that you have no contact with the supplier — which essentially turns your sourcing agent into your supplier. All prices you get are what they’ve given you (probably with a commission thrown in) and you have no idea if you’re paying a good price or not.
Sourcing agents can, on occasion, slow shipping. Your chosen shipping company will normally liaise directly with your supplier to sort out delivery dates and times — but, when using a sourcing agent, we/they have to go through them who then liaise with the supplier. Typically, sourcing agents won’t have the right knowledge to chase the supplier as effectively and this can lead to a lot of back and forth to get the right information.
Your agent doesn’t have to tell you who your supplier is. Your sourcing agent’s job is to get you the best quality product that they can find — end of. Sometimes, they might just tell you the price and the product details and that’s it. This means that you aren’t aware of who your supplier is — which is part of the reason it makes the shipping companies job harder!
Importance of finding a Good Purchasing Agent
The responsibility of a purchasing agent is to look for quality products and reputable suppliers and handle everything you need in China on your behalf while looking after your every interest in it. Below are some of the duties of a reliable purchasing agent.
It is his role to keep an organization’s inventory of either finished goods, raw materials, or important services at a satisfactory level in order to keep business tasks at minimum possible price or cost.
He should verify purchase requisitions and compare items requested to master list, clarify unclear items and recommend alternatives. It is the duty of the Purchasing Agent to forward available inventory items by verifying stock and scheduling delivery and also verify price and specifications in order to prepare purchase orders and obtain recommendations from suppliers for substitute items.
His duty also includes obtaining purchased items by forwarding orders to suppliers, monitoring as well as expediting orders. He should be able to verify complete receipt of items by comparing items ordered to items received and resolving shipments in error with suppliers. It is their duty to accomplish purchasing and organization mission by completing related results as needed.
A good agent company from China will act as your eyes, ears and nose. They would visit the factory, run background checks and insure that what you receive what you expect. Furthermore even the best factory can have delay or make mistakes. Then your sourcing agent in china should keep effective contact with vendors frequently to ensure your goals will be met.
The right sourcing agent in china can release your load up to 80%. You only need to follow the process by communicating with one or 2 people who can communicate with you via the languages you are familiar with, instead of talking to numberous of factories with some changlish you don’t understand.
It is impossible to implant your design ideas into the workers’mind. You need to have someone with technical knowledge then inform you the process and result after every communication with the vendors.