Are you wondering What is a China sourcing Agent?
Are you aware How to choose the right one for you, questions to ask, and traps you must know before working with any China sourcing company?
A sourcing agent is a person or a company that represents a buyer to source commodities, buy products that are out of the buyer’s reach.
In the traditional sense of the term, a sourcing agent is only to source suppliers for his client.
Indeed, the services provided by sourcing agents can include selecting the right supplier, price negotiation, following up production, quality control, product compliance & testing, shipping & logistics. etc.
It’s not said that sourcing agents/companies are due to provide the full range of services. The work scope depends on the agreement/consensus reached by both sides.
For this, a deep understanding of China’s sourcing Agent, how to choose, and tips to know. Read on to learn all about sourcing companies in China.
Table of Content
Must-Ask 12 Questions When you Choosing a China Sourcing Company
How to Choose your Best China Sourcing Agent?
4 Traps You Must Know When Working with China Sourcing Company
Table of Contents
Must-Ask 12 Questions When you Choosing a China Sourcing Company
1. Are you an individual service or company service?
It is always better to work with a sourcing company because they have more experience, an expert team, a professional system, provide payment security, and is data-driven.
A sourcing company will always want to work long-term to sustain its business.
Whereas an individual service is not stable, they may want to make quick money and can disappear overnight. Also, they will ask
2. How long have you been working in the sourcing area? And how about your company scale?
This is important to know about the sourcing agent, the longer they have been in the industry, means they have more experience and resources. Also, it shows that their business is good and growing. These are signs that the company is reliable.
They will be more capable of finding the best-matched supplier and solve the potential problem throughout the whole process.
3. What kind of service can you provide?
Service scope is a way to calculate their working process, the more experienced sourcing agent, the more service they can provide, besides that.
You will have to make sure as well if they charge separately for any of these services, make it clear in the beginning to avoid any hidden or surprise charges in the end
4. What’s the difference between your company and other sourcing agents?
Almost, all of the sourcing agents are doing the same job, asking this question is to see if the sourcing agent is confident enough about their own service and if they can provide any extra value-added service that meets your sourcing requirements.
5. How do you charge?
Some sourcing agents may charge a fixed fee or percentage of commission. Some sourcing agents will charge separately for each service and some will have different packages to choose from. Knowing this will help you to estimate the cost of your product.
Also read on; Sourcing Agent: Who are They? How Do They Charge? How to
How to Choose your Best China Sourcing Agent?
In our last video, we have revealed some guilty behavior of the bad sourcing agent, any of the trap you get involved in will cause you a huge loss and damage your business reputation, that is really a disaster.
But don’t be scared, keep cautious with those bad agents, and work with a good sourcing agent, you can still free up yourself from those complicated process, and win your business at a competitive price.
Also read on; Best 15 Shenzhen Sourcing Agents
In today’s video, we will introduce you to what quality a good sourcing agent should have so that you can..
1. Reliable/Trustworthy Sourcing Agent
- Transparency
The best sourcing agent will always be transparent. It means that he will always provide you true information and will not hide anything from you.
- No hidden charges
When we will quote you the price, it will not include any hidden charges. He will be honest with you every step of the process and will help you at every step of the way.
- Will keep the promise
He will keep his promise and will source the right products and make sure to deliver them to you at the right time by the right delivery.
2. After-Sale Service
Once you receive the goods, the best sourcing agent will keep in contact, will take your feedback, and will solve any issues related to the quantity and quality of the product. This will mean that he has high standards for after-sale service.
3. Professional & Experience
The best China sourcing agent will be an expert in trading. He will have years of experience, showing his ability to avoid any potential problems before they happen.
- Prompt Service – Skilled Language
He will provide prompt replies to your inquiries and will be skilled in language to avoid any language barriers.
A good English speaking skill will mean he will always have efficient communication, understand your requirement clearly and provide the right response to you.
- Support Your business needs & growing
Better use company, not individual. It is important to know that you should always use a large sourcing company for your needs.
They will have a large team which means everyone is an expert in a specific field. Avoid working with individuals.
- Supplier network.
A large company will have a huge reliable supplier network which means that they already have the best suppliers you will need to source the best product.
- Customized Service / Flexibility
A sourcing agent who provides you with customized service and flexibility will be able to provide you flexible service to help you expand your business.
If you need QC services, Branding, Amazon FBA, Labelling, Consolidation, etc. He will provide all of these.
- Long-term Cooperation
The best sourcing agent will always think about long-term cooperation rather than try to make quick money from you. He will always take care of your sourcing needs and will go out of the way to support you.
4 Traps You Must Know When Working with China Sourcing Company
Using a sourcing agent when buying from China is definitely a good way to improve your sourcing efficiency.
It can largely save your time and your energy so that you can pay more attention to your own marketing strategy for business expanding. This will make your buying from China easier.
But. many people had bad experience when working with the sourcing agent. They may tell you don’t use the sourcing agent any more. On the following is some commom trap most of the sourcing agent will do
1. Kickback from the Suppliers
- Kickback happens to both individual agents and sourcing companies.
For example, suppose you get two equal prices from supplier A and supplier B. But supplier B is willing to offer some kickback to your sourcing agent.
The agent will be likely to choose B as your supplier no matter the product quality from supplier B is good or not. This will also increase the price of the product.
Or let’s suppose another example, your sourcing agent take you to the market and place the order, whileafter you leave the shop, your agent will go back to the shop and ask for kickbacks from the suppliers actively.
So in order to balance their profit, the supplier will have to choose to change the material or change the product size a bit to save their cost.
- When trapped in these two situations, what result you will get?
Maybe the products you received can not meet your quality requirements, or product in non-compliance with the certification requirements in your market and thus illegal to sell.
but when you report this to your sourcing agent, they will not stand on your side or try to defend your interests for you, but more likely to excuse the supplier for various reasons.
2. Provide a lower quality product or Less quantity
Send samples with good quality, but rather poor quality for bulk order, ask for a sample before placing an order is relatively a safe way to confirm the product quality, for you can see the product design and feel the material by your own.
While sometimes, the agent will purposely make the sample in a really good quality to make you satisfied and get your order.
But during the mass production, they will change the material with lower quality to save their cost and gain their profit.
By this way, you can hardly tell the difference from the apprearance until your customers use it.
- Change your suppliers easily
or when you provide your own suppliers to your agent, after knowing your price, they will personally change your supplier, and try to find another supplier with lower price.
Or they will just inform you that they have the suppliers with lower price and persuade you change it, but don’t expect those suppliers are producing the same quality product as you expected.
3. Hidden charges
- Low commission or free service
when you are looking for a sourcing agent, you will find that some agents may only charge 1% commission, or even free service. In this case, you may feel happy that you find a good agent by paying a lower cost.
But actually when you encounter this situation, you should cautiously rise up a red flag. The truth is that all the agents are existing to make more profit for their business.
So if they only charge 1% commission or do free service, how can they survive themselves, so they will definitely find some other ways to gain their profit, for example, they will increase your unit price, your product from the factory maybe only $3.0.
While you will receive the quotation from the agent at $3.5 or even $4.0, this is the common way an agent with lower commission will use.
So be noted that lower commission or free service doesn’t mean you can pay less, that’s only a way the agent uses to attract your attention, you will never know how much extra hidden charges you will need to pay by this low commission.
- Quote you a competitive price in the beginning, then ask for extra fees during production for different reasons.
There is another situation, you may receive a really competitive price from the agent to attract you to place the order, As soon as you are going to send over the deposit after confirming all the details for packaging, samples, etc,
They’ll ask for a higher price with the reason that the supplier increase the price, or the material price goes up, or ask for some other extra fees like QC fees, documentation fees, custom declaration fees, etc.
This is rather common, as the suppliers know you are not going to spend too much time on sourcing other alternatives and repeat the sampling process again. So if the final price is acceptable, you’ll have to bear the additional cost.
4. Never take responsbility
promise everything before you place the order, but release responsibility by finding any excuse when problems arise for example, when your products are delayed to delivery.
The agent would easily transfer the responsibility to the factories, they would say “it’s the factory problem, they are just too busy.
It’s out of our control, so what you can do is to wait” or when you receive your container, but find that most of the packages are broken, when you take this issue to the agent for a solution.
You will just get the reply like “all the packages are fine when we receive the products in our warehouse, so the broken may caused by the unproper process of the shipping company, so it’s not our problem, we can not do anything”.
Any of the traps you get involved in will cost you a big loss, and damage your business easily, so finding a good and reliable sourcing agent is exremeely important for your business and help you sucesefully buying from China.
So in next video, we will talk about how to find a good sourcing agent, if you are interested in, please make a subscribe to stay connected, or if you have more questions about China sourcing agent, just leave a comment below, and we will get back to you soon.
Should I Use a Sourcing Agent or Source by Myself?
1. What is a Sourcing Agent?
A sourcing agent or a company assists the buyers who want to import products from China and get them delivered to their countries.
The sourcing agent will help in finding the products from local suppliers, negotiating their prices, perform inspections, and then help the buyer to ship the products from China to the buyer’s country.
Sourcing agents can be individual people as well as a large company having hundreds of employees. They provide all these services in return for a fee. Sometimes this can be a fixed fee or a percentage of your invoice value.
For a buyer, it is very important to understand when should he use a sourcing company or when he can directly source products himself.
There are advantages and disadvantages of both. In this video, we will help you understand and make the right decision on when to hire a 3rd party sourcing company.
2. Benefit of using a Sourcing Agent
Let us understand what are the different benefits of using a sourcing agent. It is also very important to know that after the Covid19 pandemic, it has become very hard for many foreign buyers to physically visit China.
This has increased the demand for the services provided by a sourcing agent.
- Save your time
If you want to source products directly from China, you will have to spend a lot of time finding reliable suppliers. You can be a victim of many scams and frauds too.
Also, it is very hard to be physically outside of China and communicate with the suppliers which can be hard due to time zone differences.
All of this will take a lot of your time and still, you cannot be sure that you will find the right supplier, the right product at the right price.
Having a sourcing agent to help you will save a lot of your time. He will bear all your buying risks. Sourcing agents are doing this work day and night, which means they already have a large database of suppliers.
They know the markets inside out and know the best suppliers in wholesale markets. Many of them may have worked in your product before, which means they can provide you with instant prices helping you make a quick decision.
- More focus on your sales
Since working with a sourcing agent helps you to save your time from sourcing, inspection, and arranging delivery of the product. This means you can focus all your time on sales.
You leave all the buying worries for the agent and let them handle everything on your behalf. All you need to focus is on marketing and sales of the products to increase your profits and grow your business.
- Reduce Buying risk
A Sourcing agent takes all your buying risks on to himself. Remember that the sourcing company is responsible for the products when they are in China. So if they source bad quality products or the products are damaged or not working as they should be.
The sourcing company will bear all this loss. So this gives you peace of mind as a buyer. Once the goods are ready and you have received inspection reports from the agent and give him your permission to ship the goods.
That is the time when you are responsible for the goods are they leave China and being delivered to your country.
- Make your buying much easier
Sourcing agent makes the whole buying process very easy. They have local connections with factories, suppliers, and shopkeepers in the wholesale markets.
They have on-ground teams and people who can perform quality control. You cannot do all of this while being outside of China. It is near to impossible.
A sourcing agent will help you to find the best suppliers, perform supplier audits, visit their factories to make sure they are legitimate.
The agent will also help to place orders, make payments to multiple suppliers, do inspections of the goods and help to arrange for delivery.
All of these steps will be handled by the agent which means that you will have a worry-free buying experience.
3. Should I use a Sourcing Agent or Source by Myself?
This is a very important question for the buyer. Many buyers think that if they source products directly they will save a lot of money. This is in fact not very true because sourcing companies nowadays also have a lot of competition and their charges are not very high.
Also if you plan long term to import products from China, it will be hard to source products yourself due to many challenges throughout the process.
If there will be any issues on any of the stages, it will be very hard for you to solve them while being outside of China.
Let see some factors which can help you to make this decision.
- Depends on your Budget
If your budget is small, for example, less than $5000, then it is better for you to source products yourself.
Because of such a small budget, there won’t be many agents or sourcing companies to help you source products. Less budget also means there is not enough commission for the agents.
If your budget is huge, then you should take advantage of the services provided by sourcing agents/companies.
- Depends on your Stages of the Business
If you are a beginner in importing from China and do not have a lot of experience, then you should definitely use a sourcing agent. If you source yourself there are huge chances of loss because of lack of experience.
However, if you are an experienced importer, who has visited China multiple times and has been importing products for a long time, and have reliable suppliers, then you can source products yourself.
- Depends on the Products
If you have multiple product categories to deal with then you should take the help of a sourcing agent.
For multiple products, you will need to talk to multiple suppliers based in different cities, negotiate with them, visit different factories in different cities or visit multiple shops in wholesale markets. All this work will be very hard for you to do individually. It will take a lot of your time and effort.
- Depend on your Profit Margin
Let’s say you are buying a product that is costing you 10$ and you are selling it for 13$. This is a very low-profit margin.
If you take the services of a sourcing agent for this product, then after he takes his commission your profit margin will decrease which will not make working in the product profitable for you. In this case, you should source directly by yourself.
However, if your product is a high-profit margin, let’s say more than 30%. Then you can easily hire a sourcing agent because now you can pay their service fee and still you will be able to earn good profit.
Conclusion
From the discussion above, it becomes clear for you to know what a sourcing agent is and how to choose the right agent for you.
Hiring a sourcing agent in China can be very beneficial if you want to buy and import products from China.
EJET Sourcing can greatly be you sourcing agent with the added benefit of saving recurring costs and time also expand your business.
