Table of Contents
1 Why you need Sourcing Agents start Your Business?
For first-time importers, the task of finding suppliers is very difficult, and you should consider your cost budget and the number of products you need to order. Since commercial transactions are most likely online, it is difficult to deal with someone, at least not to meet your contacts in person. Even more worrying are the horror stories in which business owners are deceived by scammers online.
Starting a business imported from China is a tedious process. You must develop a reasonable business plan to run your business and ensure that it can create long-term profits. More importantly, you should have a reliable and trustworthy supplier who can sell high-quality products to target customers.
In this case, hiring a sourcing agent to help you deal with the supplier will help a lot. Hiring an agent can make the transaction easier and less troublesome. In terms of relationships with Chinese suppliers, reliable procurement will make your job easier.
This article will discuss the work of sourcing agents and how important they are to your business. Regarding the tasks of sourcing agents, you need to know the following:
1.1. The sourcing agent are responsible for the import process
In short, a purchasing agent will conduct import transactions with suppliers for you. They assume the main responsibility for all related work related to product import-from order to delivery. A reliable purchasing agent should also be familiar with the import process and prevent risks that may affect your operations.
1.2. The sourcing agent speak the local language
If you are importing from China, then it is logical to hire someone who speaks your own language. This can help communicate better and prevent poor communication from disrupting your business.
1.3. The sourcing agent represent your business
Since the purchasing agent will represent your business, it is important to hire enough reliable and trustworthy personnel. The sourcing agent will also help you find suppliers and conduct on-site factory visits if necessary.
1.4. The sourcing agent act as quality controllers
A reliable agent should know the roundabout of the import process. At the same time, the agent is also responsible for product quality inspection before the product arrives at your door. The sourcing agent will ensure that you only get the best products from the best suppliers in town.
If you are a first-time importer, you will definitely need the help of experienced personnel, and a reliable purchasing agent will help you complete such tasks. Many successful businessmen believe that hiring a purchasing agent to import from China is a good business investment.
2 Areas to Consider When Looking for a Sourcing Agent
China is becoming the major manufacturer of industrial products due to its low price and improved quality. But the diversity of products, language, culture and business practice differences pose problems for most foreign buyers and thus, having a good rapport with the suppliers is very important. This is where a China sourcing agent comes in.
Finding the right China sourcing agent is an important step to successfully sourcing products in China. Your relationship with them and their ability to deliver quality products in timely manner and at the right price will be major factors in the success of your business.
It’s important to take your time and ask the right questions. Only proceed when you’re confident that the agent can do what they say can, and that they’re a good fit for your business. Here a few areas to consider when looking for a China sourcing agent.
2.1. The sourcing agents have Office in China
Do they have a fully staffed office in China? How long has it been there and how long have their staff been employed there? It is important to work with an established company with a proven track record of successfully sourcing products in China.
2.2. The sourcing agents have Experiences in China
For most people, China is a very different country from what they are used to. The culture and the mindset are very different from the west. When vetting a sourcing agent, ask them how long have they been operating in China? Good representation will come from an agent who has been operating successfully in China for many years. Established working practices will help ensure that you get good service. They will also have built up a network of reliable contacts – which is very important part of life and business in China.
2.3. The sourcing agents provide References service
Can they provide genuine references from other businesses who have used their service? If they can provide references, you should always take the time to call to them. Ask how long they have been in business, how long they have been using the agent, what products they have sourced, what is the quality like, and can they recommend the agent. Take time to check out their website also.
2.4. The sourcing agents have Documentation Management
Ask the agent what documentation they can provide as part of the sourcing and shipping process. They should be conversant in the process and give you confidence that they know what they are talking about – based on the language that they use. Typical documents include the Bill of Lading, Certificate of Origin, packing list and commercial invoice.
2.5. The sourcing agents can deal with Quality Issues
Ask what their procedure is for dealing with any quality issues that may arise. Having dealt with Chinese manufacturers for over 15 years, in general, we have been very impressed with their quality. It’s important however that the agent makes it clear to the manufacturer that they will not accept substandard levels of quality.
2.6. The sourcing agents have License to Trade
In China, the law is very strict on what a business can and cannot do. All businesses must have a license to trade. That license enables the business to conduct one specific type of operation. They cannot do other things which don’t match the description of their license. Ask to see the agent’s license before you start doing business with them.
2.7. The sourcing agents can speak in English
As English is the international language of business, regardless of which Western country you come from, your primary point of contact at the agency should have a good command of spoken English. They should also have good written English as many of your communications will be in email. The same rule applies to the staff in the agent’s Chinese office. They too should have good verbal and written English as you may have to speak to them directly on occasions.
2.8. The sourcing agents have clear Process of organizing and sourcing
You have to get an insight into the sourcing strategy of the agency. A good agency is one that presents the certification requirements and product specifications of the client at the very beginning. This is proof that the agency is an incorruptible friend of the client.
Include certification requirements and product specification confirmation; Research of price, ordering a sample and choosing suppliers who qualify; First stage of negotiation of prices; Supplier selection after audition; Agreement of sales; Quality inspection; Shipping agreement, etc.
2.9. The sourcing agents have professional Field of expertise
China sourcing varies depending on the products you are buying. While some agents are good at sourcing one type of product, they might be not so good at sourcing another type of product. You have to know whether the sourcing agency you are hiring has prior experience in procuring products you want to deal with.
You can ask your agency to provide you with a record of similar orders they have handled before in the same industry. You should also ask for buyer references, so that you can get the information directly from the buyers. You might not come across a procurement agency which deals with only a specific product, but you might ask for buyer reference in the same industry. This helps in assessing if the agency is efficient or not.
2.10. The sourcing agents have lean Management
The procurement agency must have knowledge about the quality standard, certification needs and other aspects acceptable in the Western economy. Therefore, it is better if the sourcing agency has offices close the manufacturing towns, so their quality staff can easily visit the factories and do online and pre-shipment inspections frequently.
What Makes a Right Sourcing Agent?
A lot of businesses reply more and more on importing from China, as China is becoming the major manufacturer for most of consumer products, because of low price and improved quality.
However, the geographical distance, vast categories of products, language barrier, and cultural differences pose a problem for most foreign buyers. Thus, having a good China souring agent is important. The following aspects are important for you to choose a right sourcing agent.
A. The sourcing agents should in Trustworthiness
A buyer should note trustworthiness is the primary factor when it comes to the selection of a sourcing agent. If you work with a dishonest sourcing agent, you will never be aware that, your sourcing agent is actually ripping you off by secretly ask the supplier for hidden commission.
A professional sourcing agent will make their golden rule that no information about the supplier should be hidden or faked to the buyer, including number of employees, market performance, reputation, registration information, real business type, product cost, quality, etc. All the communication and operation are transparent and open.
B. The sourcing agent should have good Communication
As English is the international language of business, your China sourcing agent should have a good command of spoken English, so you can talk online for important matters. Also, the They should also have good written English as many of your communications will be in email.
Besides, Time & Efficiency is important. Professional skills and efficient reaction can speed you up and get you ahead of your competitors. Your personal sourcing agent will provide you real-time services. If you have any questions they can help you solve immediately.
C. The sourcing agent must have Product expertise
Knowledge about product and industry is a decisive factor. First, an insider has a much more comprehensive product expertise, which is required to understand what makes good quality for a certain product. Second, this may also speed up supplier sourcing and vetting procedures, as they can utilize an existing network of suppliers.
However, still it is important for you to communicate your quality requirements and product specifications.
D. The sourcing agent must have Quality sense
No matter looking for products or suppliers, a good purchasing agent should guarantee the quality.
The products provided must meet the needs and requirements of customers. Supplier verification and evaluation plays a very important role, sourcing agent also will provide you when start the sourcing.
Once a supplier is chosen by the buyer, the sourcing agent should take the time to go to the factory in person to check the raw materials, assembly lines, semi-finished parts, warehouse, and do quality inspections, and provide the written report to the buyer with photos and detailed findings.
What Can a China Sourcing Agent Do for You?
Sourcing from China is a lucrative business, but it can be risky and complex. Finding a reliable China supplier is difficult, the whole sourcing process seems daunting to new importers. You can’t fully trust the information shown online, and it is important to know the reality of the suppliers in China.
If you’re buying from China, you need trustworthy people on the ground in China. A good sourcing agent can help streamlining manufacturing processes. The followings are what a China sourcing agent can do for you.
1. The sourcing agent can Handle communication
Usually, if you are looking for a list of products you think promising, you may need to find 5 suppliers, also, you need to calculate unit cost and shipping cost. That means, you will have to spend lots of time at Alibaba or other sourcing websites and deal with endless emails with various suppliers. Every time you want to get price and delivery information for a product, you need to spend a few days to communicate with suppliers back and forth.
A China sourcing agent will help you solve this problem. You can easily send full production specifications and quality expectations, along with order QTY and target FOB price to the sourcing agent, then the sourcing agent will do the sourcing in their professional field, filter qualified suppliers, negotiate the best possible prices, and get back to you with a full package of options within a week.
B. The sourcing agent can Get better price and lower MOQ
Many clients always start off with 100-200 units because they want to test a product, see how it behaves, get a feel for the specification and overall market performance. What a China sourcing agent can do is to talk with the local suppliers, get quotations from various suppliers, compare one to another, negotiate with suppliers, and try to get the most suitable option. Because the China sourcing agent has long-term business relationship with suppliers, he can get the support from suppliers and start with a low MOQ.
3. The sourcing agent can Do quality inspection
Nowadays, bad product quality can kill a project instantly, as disappointed customers will leave bad reviews online, and tell more people around him. You cannot trust a China factory can manage quality 100% correct, especially in peak seasons.
If you have a China sourcing agent to help you handle whole process, it will save you lots of hassle. China sourcing agent can help you check monitor production line, check finished products one by one, and prevent bad products being packed into cartons.
Also, China sourcing agent can inspect bulk production before shipment, and do container loading check to ensure that the specifications are the same as the customer required. Especially for small sellers, it is not cost-effective to order a third-party inspection company for the production quality control.
4. The sourcing agent can deal with Consolidate shipment
If you request samples or products from multiple suppliers, it is expensive to ship them separately. When you have a China sourcing agent, you can have all the samples sent to his office, or all the products sent to his warehouse. Usually, the China sourcing agent can keep the products in his warehouse free of charge for up to a week, you may combine all the products and shipped them in the same container to your country, to save your pennies.
As an experienced Sourcing agent has cooperated with logistics companies for a long time, they can get favorable rates and priority from logistics company. So, you can get your products shipped earlier and at a lower cost.
Moreover, your sourcing agent will prepare shipping documents and let you know what compliance certification you will need for customs clearance. You can stay away from hassle of shipping and focus on your marketing strategy.
How to Evaluate a China Sourcing Company?
Imagine your shipment is delayed from China, your product has defects which reduce customer satisfaction or in the worst case require product recall. In order to avoid such risks, more and more importers realize the importance of partnering with a reliable sourcing company. This will ensure that you are able to well control production lead time, enhance your quality standards, reduce manufacturing cost, and improve your profit margin.
Finding the China sourcing company that you partner with in long term is one of the most important decisions for an importer, but it is an uneasy task. You may evaluate a sourcing company based on below factors:
The best way to tell how a sourcing company will treat you is to determine how they have treated other companies. If others have had a good experience with them, you likely will as well. You depend greatly on your sourcing partner to supply quality products, so you don’t want to depend on trial and error before finding the right one. Receiving referrals from other companies will provide assurance that you have found the right sourcing company.
The right global sourcing company will provide highly effective means of communicating important production information on a timely basis. All stakeholders should have access production updates and critical documents, including the customer, the global sourcing company, and the factory. This allows the customer to make informed decisions regarding their manufacturing project, and allows all parties to mitigate risks of lost time and money through improved project management.
3) Product Quality
When partnering with a sourcing company, you need to be assured that they will provide quality products for your business. While it may be tempting to partner with the company that quotes the lowest price, that company may provide products that are of lesser quality, potentially hurting your production and your company’s reputation. The best option is to find a global sourcing company that offers sustainable value pricing coupled with a solid quality assurance process.
4) Types of Services
While some sourcing companies only do the bare minimum, others offer services that will provide great assistance to your business. The best option is to find a sourcing company that offers scalable services, so that you select and pay only for the services you need. For a global sourcing company these services may include sourcing & manufacturing management, onsite quality inspections, shipping and logistics management, warehousing, and engineering services.
How to Qualify a Sourcing Agent in China?
More and more importers realize the benefits of a sourcing agent; however, they do not know how to qualify a good China sourcing agent. In my opinion, below 4 points are the most important areas you need to focus on.
1) The sourcing agent should have Communication: Fluent English, High Efficiency
A good sourcing agent must have a strong command over English in both writing and speaking and should be able to communicate with you smoothly by phone and email. Smooth communication is the foundation that helps develop cooperation and seamless workflow.
Ability to communicate fluently and confidently in English also reflects that the agent can be trusted to carry out his tasks efficiently and with ease. On the other hand, if your sourcing agent’s English is weak, it will only cost you time as you will have to communicate your requirements time and again until he understands them correctly.
A good sourcing agent must also be highly efficient and prompt in responding to the emails. There is a time difference between China and most countries. China is 12-15 hours ahead of the US and is 7-8 hours ahead of Europe.
Usually, your questions will not be answered until the next day. If your sourcing agent never responds to your emails and messages after work or on weekends, they are not a good fit.
2) The sourcing agent can Understand your requirement
In addition to knowing English, it is also essential for the sourcing agent to be quick in understanding the precise requirements of his clients.
For example, if the product is complicated and you require a little customization with the material or redesigning some parts, the sourcing agent must be able to understand your requirements so that he can convey the same to suppliers.
They can communicate with the factory on behalf of you according to your product ideas. If your sourcing agent can’t understand your real need very clearly, then it will take more time to modify the product back and forth.
3) The sourcing agent have Professional product knowledge
There are two main types of sourcing agents, and you need to choose an appropriate sourcing agent according to your own needs. One, those who assist in finding a particular kind of product, such as drugs, machinery, etc. and the others are who specialize in finding products of daily use for consumers.
Sourcing agent who specializes in finding suppliers of a specific type of product needs to have a good understanding of the products and relevant professional knowledge as well. Customers who come to procure such products are professionals with sound knowledge of those products. The knowledge and experience of the sourcing agent should at least match his customer so that he can understand client requirements and deliver the same.
The agents who deal in all kinds of products have an extensive network of cooperative factories and suppliers. So, they can find the best suppliers for the products you want in a very short time. If you open a supermarket in your country and need hundreds or even thousands of different categories of products, the procurement management can be challenging. In this case, sourcing agents that specialize in providing all kinds of products can prove to be an asset.
4) The sourcing agent have Professional import & export experience
Any good sourcing agent must have a good understanding of the legalities and paperwork involved in import & export. This includes the process of import & export, certificate and document requirement, licenses, etc.
The agents should also know about international transportation. They should have an understanding of what kind of products can’t be transported by air or by sea, or what type of compliance certificate is required for air transportation. In addition to this, the sourcing agent should have knowledge of patents to avoid potential inconvenience while importing.