Finding a Good Sourcing Agent
If you are planning to import from china, you must have heard about sourcing agents. Sourcing agents make doing business with suppliers from China a lot easier. There are basically three types of sourcing agents.
Regardless of the type of sourcing agent you choose, they do the same things for you in so far as the procurement process is concerned. It is also assumed that all concerned are knowledgeable and skilled to handle the procurement process for you in China.
This is an individual who has extensive experience in the product you want to buy from China. You usually pay him a commission for the orders he worked on. The commission is based on the order’s FOB price and is between 5% and 10%.
This is an ideal if you are buying in small volumes and you do not want to get involved with all the details of the procurement process. Traders work with small factories who can accommodate your small volume of orders. More often than not, these small factories do not have the capability to directly talk with export clients.
Traders earn by adding a mark-up to the supplier’s price. A professional purchasing agent would prefer to go direct to the factories thinking this will cost cheaper. Fact is a trader’s price will still come out cheaper, if you negotiate correctly, than that of the bigger factories. This is because in China, the bigger factories are more expensive than the small workshop-type suppliers.
If you purchase from a trader you should inspect the quality of the product. An exception is when the trader shows you a report from a third-party quality control company.
- Third Party Service Provider
If you are ordering large volumes, a third party service provider is the best type of sourcing agent to work with. Suppliers will always be very accommodating of inquires of third party service providers because of the large volume of the order. Their service fees are also most likely to be low in relation to the size of the order.
These companies however require an upfront investment. This is justifiable because they provide professional sourcing and screening of products and they also inform you of the supply chain. Most of these companies position their services as supply chain management. Some of these companies though sometimes possess the products and become a trader for your order.
For first time importers, choosing the best sourcing agent can often be daunting. Whichever type of sourcing agent you choose, trust and legitimacy are the most important factors to consider.
To make sure you are going to be dealing with a trustworthy and legitimate individual or organization, have them supply you with a list of 3 or 4 clients from your country they have rendered procurement services.
Let it be reiterated that China is the cheapest source of most quality parts and products. With a good sourcing agent working with you, you can benefit from this and make your business flourish in no time.