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Sourcing Agency 101: How to Find the Best China Sourcing Agency
Today I’m going to show you how to find the best China sourcing agency that gets:
6 points a China sourcing agency can help for you.
8 features of a perfect Chinese sourcing agent
And the fee of a China purchasing service
Let’s move on.
Chapter 1: China Sourcing Agency Basic
Are you a business owner or an entrepreneur seeking high-quality products at low prices in China? If so, you need a Chinese sourcing agent. They will help you find the best suppliers. But there are crucial things you need to know and consider. Read on.
What is a China Sourcing Agency?
A China Sourcing Agency is a licensed company in China that can assist you in the overall process of buying a product from reputable suppliers. In addition, they can mediate and negotiate with them. Since they speak their local language, they will help you ensure you’re getting high-quality products.
There are thousands of factories, manufacturers, or suppliers in China. And you may face a lot of struggles if you’re not familiar with their business processes. Thus, a China sourcing agent can assist you from the beginning until the end of a transaction.
Why is China Sourcing Agency Important?
Looking for a qualified supplier that can cater to all your requirements is complex. At times, it can be confusing. Hiring a Chinese sourcing agent from a reputable agency will simplify the job you need to do. It starts from locating the right supplier and making transactions on your behalf.
It is beneficial to hire the services of a China sourcing agency. The reason is they know the Ins and Outs of dealing with several suppliers. They can help you from the risks of getting scammed. They can do a wide array of services for you, such as:
1. Communicating and checking the company’s profile and business certificates
2. Negotiating with the suppliers and ensuring the production is going smoothly
3. Give you timely updates about the orders
4. Inform you of the following process
5. Conduct quality inspections of products
6. Picking storage or warehouse for your goods
7. Getting the best shipping offers and options from the factory to the destination
8. Provide you with a hassle-free transaction
9. Best experience from agents for importing goods from China
The role of a sourcing agent is to protect its client from supply scammers. Some manufacturers and suppliers are too good to be true. But, they could be illegitimate companies. In the end, the client will lose money or turn to legal actions to resolve the issue.
Chapter 2: Types of China Sourcing Agents
In this section, you will learn the three types of China sourcing agents. It will help you decide which service is better. Also, you’ll know how you can benefit from each.
A sourcing agency has a pool of expert sourcing agents that can do the work for you. So whether you’re looking for a China buying agent, China import agent, or China purchasing agent- a reputable sourcing agency has them.
The advantage of hiring from a sourcing agency is that they have a rich and more extensive network. They have more experience when it comes to locating the products you require. Since they are experts, you can demand a specific agent to work on your niche.
In terms of fees, they are higher than other sourcing types. However, they can do background checks and verify a supplier’s profile for you without a hassle. Also, you can rely on their sourcing process because they can provide transparency throughout.
Independent China Sourcing Agency
An independent sourcing agent is an individual who works independently by contacting the factories or suppliers that they know. You will need intensive research to qualify as an independent China product sourcing agent.
You pay them by commission or per service that they do for you. When you choose to hire an independent sourcing agent, you must know that there are risks. Before starting a project, qualify the individual you have selected by asking and proving their qualifications.
Most of the time, an independent China sourcing agent has a small or limited network. Unless someone you trust referred them, they have a little list and connections to major suppliers.
Since working with an independent sourcing agent involves risk, you should be wise enough to discern how far you want to work with that person. You can ask for references to their previous works to see their expertise.
When you hire a trading or logistic company, they act as the supplier for your desired goods. However, you will not have any control of the supply chain. Instead, the traders will negotiate with the manufacturers. You will only purchase from them.
According to QualityInspection.Org, there are many advantages once you have chosen the right trading company. It is because China’s export agent is more experienced in finding the right local products and understands all the requirements for importing.
Logistic companies have the highest fee when opting for their service. It is due to their extensive database of suppliers from different markets. As a result, they can take over all the responsibility. So you can sit and wait while they work and deliver the products to you.
For example, if you want to sell in Amazon, you can hire a trading and logistic company. They will source the product based on your preference and get you the proper manufacturer.
They will be in charge of supervising the production, inspect and ensuring quality assurance. After which, the china trade agent or company will find the best shipping option to deliver it. You can either choose from an Amazon warehouse that will manage the goods or your preferred location.
Chapter 3: Why Do You Need A China Sourcing Agent/Agency?
Your profit in business will determine if your company becomes stable in the long run. So if you want to sell a product and make profits, you must look for a reliable manufacturer. A reputable manufacturer will not fail you. It becomes your partner to grow your business.
But looking for a manufacturer in a foreign country is not easy. There are barriers like communication and cultural differences. There are negotiation skills you must acquire. Therefore, you need a China sourcing agent or agency.
The services they offer will provide you convenience and the following:
If you want to import products overseas but know nothing about the process, you need a lot of time to know everything. Time is everything! If you’re going to save your precious time, hiring China agents for import-export will speed up the process.
Sourcing can be very frustrating when you experience complex matters. Let’s say the product you’re looking for is rare and specific; it will save you time if you hire someone to source it for you. Researching online is not enough to find the best sourcing agent in China.
Cost savings and product variety
Collecting reliable resources for international products requires hard work. Sometimes it needs a big budget. But when you hire a Chinese sourcing agent, you will get plenty of options. Moreover, due to their long list of reliable resources, you’ll find credible manufacturers in the market.
You don’t need to go to China’s trade fair to check on companies and their products. A China sourcing agency can do that job for you. It is their responsibility to look for China product manufacturers that can produce low-priced goods without compromising the quality.
You can shortlist the China wholesale suppliers and see who can meet your requirements and expectations. You can compare and even ask for a sample with trustworthy manufacturers. However, you cannot easily find a list of these manufacturers without the help of China sourcing agents.
China sourcing agent fees can be expensive depending on the service you will get. Nevertheless, hiring one will save your business costs and reduce risks. In addition, you will find it convenient because this China sourcing agency will mediate and do transactions for you with ease.
To check on legalities and company certificates
You may have heard of horror stories of importers who suffered due to the illegal practices of some manufacturers. If you want to ensure you’ll not get into a fraudulent transaction, you need help verifying if the manufacturer is legal.
Your China buying agent can verify compliance certifications like ISO or COC. Additionally, they can check company licenses and other business certifications that you may not understand, primarily when written in their language. With their help, you will avoid transacting with illegal companies.
Help to negotiate
Due to communication barriers, negotiation can be an obstacle. Negotiating will be difficult if you do not know how to speak your supplier’s language and vice versa. Therefore, a China buying agent can be beneficial to talk to them and translate the conversation for two parties.
For example, when you want to reiterate the specifications you want for a product, your China sourcing company will guarantee that for you. When you wish customization done, your China sourcing company can negotiate it on your behalf.
To create favorable terms and agreements with your supplier, looking for a reliable sourcing agent will make it possible. Negotiating from the beginning until the end of the transaction will be a breeze once you hire a China sourcing company.
Expand your network
Expanding your network can only happen through connections. Once you find efficient manufacturers and suppliers for your business, your network will grow continuously. It can happen when you hire the best China sourcing agent.
A good backup plan for your business is having not just one or two but additional China wholesale suppliers. When you hire an experienced sourcing company, you’ll meet several manufacturers that can fit perfectly into your criteria. The more connections you have, the quicker your network will expand.
Successful partnership and business growth
Your supplier can make or break your business. When you find the appropriate China wholesale supplier, you establish a lasting business partnership. In the same way, your profit will grow, and your business will run a smooth operation.
Through the help of a Chinese sourcing agency, you will find benefits you will gain when selecting China wholesale suppliers. There are several factors you need to consider when picking or sticking to a supplier. Some of it are their delivery commitment, payment terms, discount on bulk sales, and more.
Finding a supplier from China is more convenient when you hire a reputable China sourcing agent. Once a good relationship has been built, your business will be successful. According to John Russel, guanxi is the most critical factor in Chinese business culture. That means building a relationship.
Chapter 4: How Do I find a Good China Sourcing Agency?
Researching online is the first thing to do. After choosing a few, the next step is to check, probe, and evaluate. Doing these steps will get you closer to finding the right China sourcing agent.
There are factors to consider when choosing a sourcing agent in China. But, first, you must check on the following:
Experience and Expertise
Experience doesn’t only refer to the number of years an agent is doing the job. It is also how knowledgeable the agent is regarding the intricate details of the whole sourcing process. Moreover, they know the peculiarities that can arise during a transaction.
Check the agent’s specialization and see if it meets your criteria. His expertise should be around your niche so that the job will be quick and precise. Otherwise, you’ll look for another China sourcing agent, and that’s a waste of time, effort, and money.
According to Harvard Business School, negotiation skills are one of the top skills needed to prosper. Hiring an agent with excellent deal-making skills will get the job done seamlessly. You must ask the agency to provide you with an expert agent in your field with rich experience.
When you choose a sourcing agent, you will notice how well they understand you. For example, do they speak English very well? Or, if you prefer a different language, can you get an agent that speaks it?
Another critical factor is your agent’s proficiency in the language of your preferred market. There are several languages spoken in China. It would help if you made sure that your China sourcing agent could communicate with the suppliers excellently.
Checking on the language proficiency will make you confident that negotiation will be smooth. Miscommunication can create problems if the manufacturers cannot understand the requirements because the agent was misinterpreted.
A professional Chinese sourcing agent should be conversant not only in Mandarin. But they must also be knowledgeable about the country’s cultural language. You can rest assured they can assist you based on your demands.
Track records and license to operate
Track records refer to performance or proof of past or current transactions with clients. So, for example, if you are looking for a Shenzhen sourcing agent, check if they have done digital and electronic products transactions with reputable clients.
On the other hand, checking if your agent is licensed will help you stop worrying if they are legal to do the work for you. Before you do business transactions, ask if they have a license. The license to operate will serve as your protection in case a bad scenario happens.
A legal sourcing company should present a valid license and have proof of records of their transactions. If you are importing and exporting for the first time, never deal with any company that can’t show a license, regardless of their promises.
A straightforward way to check if a China sourcing company is credible is when they can immediately suggest or have a manufacturer in mind after you tell the product. Being credible means being accurate with their recommendations.
A credible China buying agent can be found in Google and trustworthy freelancing sites like Upwork. The years of service in the sourcing industry are also a good criterion. Nowadays, the credibility of a company is also measured in its social media existence.
When you don’t feel enough that the company is reliable, check their registration status. You can ask for the company’s complete name and go to National Enterprise Credit Information Publicity System. You can find helpful information here to qualify your choice.
Sourcing agents are a great approach to identify the best supplier for your needs based on location. If you want to save on travel or transportation expense, get one within the manufacturer’s site. It will avoid all the time-consuming travel when checking on a manufacturer.
In China, the industry category is grouped or located in a geographic area called a cluster. For example, if you want to purchase cosmetics, find a Guangzhou sourcing agent since Guangzhou is a specific location where cosmetics are manufactured.
When you hire a China buying agent who can check and inspect a few suppliers for you, always consider the location. They can do updates and necessary follow-ups easier with a minimal travel cost.
Scope of Network
Your China import agent should have a remarkable market network. The wider the scope, the bigger the access there will be. This is very important if you are very meticulous in the selection process. Your agent can provide you with a list of all qualified and trustworthy suppliers.
A good China sourcing agent will agree to become transparent in all aspects of the transaction. That means they will avoid bribery or extra commissions from the supplier without your knowledge.
Also, before you close a deal with your agent, you can elaborate on matters you want to become transparent on. If both of you have agreed on product price and other information, your China purchasing agent should be honest and willing to commit to it.
Reviews and Testimonials
When you search in Google, you can find reviews and testimonials of a sourcing agent or company. In addition, most forums will mention or say something about their experience with services.
Search if your agent can be found on social media platforms like Facebook, Instagram, Pinterest, Twitter, Linkedin, etc. You can find reviews there as well. It is better to choose a China trade agent with social media existence since they are more credible and reachable.
Chapter 5: How Much Does a China Sourcing Agent Cost?
The price varies on the services you need. Aside from the primary services that they offer, the China sourcing agent fees depend on the scope of work you require.
Below are different options on cost:
Flat Rate Commission
An agent usually asks for a 10% commission for the order you will place. However, this is not fixed. Commissions can go between 5-10% of the total value, depending on your agreement.
Don’t go for those agents who will offer you a low price because you get what you pay for. But with higher and reasonable commissions, you can expect a robust supply chain of manufacturers. You can negotiate on the commission based on the price and quantity.
If you are entirely new to sourcing, a sourcing agent can change the price of the goods they will present to you. They act as a middleman between you and the supplier.
In a price markup, the client is unaware of the true cost of the items. You only pay a rate determined by the Chinese buying agent.
Commission from Factory
A China sourcing agent can get commissions from the factories after a successful sale. If a China sourcing agency works solely on commission from a manufacturer, this is more akin to a trading or logistic company.
They find clients looking for products on behalf of the factory. They have current links with factories to collaborate with the client.
For a flat fee, the charge is decided at the start of the project. You will talk to the sourcing agent about your product details and requirements, and they will work from there. They will provide you with suppliers fit for your needs.
The downside is, you need to pay them for finding you a list of manufacturers even if you don’t like their recommendation.
Hourly Rate Fee
A Chinese sourcing agent and agency can charge hourly. You compensate them based on the number of hours they worked, regardless of the supplier arrangement.
Paying by the hour is only recommended when you are familiar with sourcing, and you only need a specific type of service. Some agents or firms charge more than the hours rendered to complete the work.
In this structure of payment, a China sourcing agency can benefit from two or more options mentioned above. For example, you can pay a flat fee for searching the suitable suppliers and pay them a commission when you order based on MOQ.
Often, the combined fee model motivates the China agent for import to work at their best. The more that they make the client satisfied with their service, the more they earn.
Chapter 6: How Do I Qualify A Sourcing Agency in China?
China is the biggest marketplace in the world. However, you must bear in mind that there are unethical people in the business, one of which is the sourcing agent. Thus, you must be selective and careful when hiring one to avoid frauds and scams.
So you can hire a qualified sourcing agent in China, make intensive research, and shortlist a few of them. Do not jump immediately on hiring them when they offer their services. There are a few questions you can ask when hiring a sourcing agent, such as:
- How are you getting paid?
- Do you have references or good reviews from those who have previously used your services?
- Do you visit the factory and inspect the products?
- How do you ensure that the products are high quality?
- How do you give updates, and what management systems do you use?
- How do we resolve issues with the supplier?
This set of questions should be part of your checklist when looking for a Chinese sourcing agent. Be wise to distinguish good and bad through their answers and legal qualifications before hiring them.
Chapter 7: What are the Bad Practices of Some China Sourcing Agents or Companies?
Manufacturers can offer bribes to a sourcing agent to persuade the client to close the deal with them. In the same way, a sourcing agent can bribe the factory or supplier by asking for an extra fee to get the products from them.
At first, the sourcing agent can show great intentions, such as being transparent in all the details of the negotiations. But it is still inevitable to change their minds when a tempting bribe is offered.
Kickbacks are illicit payments that a China import agent can initiate or accept from the factory. A trustworthy agent will never be tempted to do and take such. That’s why clients are also expected to make a decent fee to the agents because lowballers will get what they pay for.
There is a wrong side when the sourcing agent takes a kickback from the manufacturer. If there are problems after sending the goods, the sourcing agent will take the supplier’s side and defend them instead of protecting the client.
Aside from bribes and kickbacks, dishonest agents or companies can trick you with their schemes. Be careful how you deal with China’s purchasing agents when giving you a supplier. Are the suppliers they provided legal? Do they have valid company certifications and registration?
For instance, you want to import home décor products, so you look for a Foshan sourcing agent who gives you a list of suppliers. If your chosen supplier does not agree to the kickback request of the agent, the agent can favor another supplier even if they are credible.
In other cases, the sourcing agent can prefer a relative or a friend who can fake some qualifications instead of the more qualified factories.
Chapter 8: Tips to Find a Reliable and the Best Sourcing Agent in China
To get the best sourcing agent in China, here are some helpful tips you must consider:
Decide on the product that you need
As mentioned, the product category is grouped or located in a geographic area. Before you decide to hire a China import agent in a specific location, you must finalize your product requirement and pertinent details.
If you need several products, check if they fall into different categories to estimate service costs and if you need to hire other sourcing agents.
Define your budget and limits
Before you close a deal with your sourcing agent, you should strategize how much budget you have. Plan how you will distribute your budget and how much buffer you can allot for unnecessary expenses.
In the same way, set your China purchasing agent’s expectations if your budget is limited. This way, they will work accordingly and as expected.
Do your research
Do as much research as you can about a sourcing company. Use Google and see if there’s anything you can read about their practice and service. Evaluate their performance and see if you can find any references for their work.
Pick the right type of sourcing company
By knowing the pros and cons of each type of sourcing company, you can decide which service is better for you. Weighing up the risks and benefits is crucial when deciding who’s service you should get.
Shortlist companies and review offers
Get in touch with different China sourcing agents and see what they offer. Compare their sourcing process and if they can communicate with you well. Work only with honest and professional sourcing agents.
Discuss payment terms
Discussing the payment terms will tackle the payment method and schedule of payment. It is better to set the commission thresholds and rate brackets before you start any transaction.
Create a Contract
A written and signed business contract will protect both parties from legal commitments to avoid conflicts and mitigate risks. It outlines and states the responsibility and scope of work, so make sure to get everything in writing before starting a deal.
To establish a partnership with a sourcing company, you must always think about a win-win strategy. By setting clear goals and objectives, you will build lasting alliances instead of a one-time transaction.
Grow your network
A reputable sourcing agency will help you grow your network by connecting you to highly-commendable and credible suppliers and factories. They will not hesitate to go the extra mile to provide you with a good list of qualified resources so you can expand your network.
Chapter 9: Top Sourcing Company in China
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