Why do I need to sourcing agents in China?
Recently, sourcing agents (purchasing offices) have become increasingly popular among global buyers. A good one-stop sourcing agency service not only saves you a lot of time, cost and energy, but also can be used for procurement, verification, quality control and after-sales service, and can also reduce business risks in the procurement process purchasing from China. I recently received customer requests. I am looking for a China sourcing agent to help collect samples from China to ship to the US.
We are in the process of setting up our Amazon account and business presence.
To begin, we are looking for about 10 samples. During this test we will assess the speed and quality of the products. We will also need an agent for future purchases so our aim is an ongoing relationship.
I have attached images that describe the product we are after. We need your help to gather samples that are related to the product images, and ship them.
Please send a proposal if you have it, or we can discuss the details online.
Thanks so much for your time and consideration, we are looking forward to hearing from you.
A qualified China Sourcing Agent Office can act as your own Special Purchasing Assistant in China, and they can help you with all your questions about your importing business from China. They can help you successfully complete every step of the following aspects of purchasing products from China:
Find a new supplier or factory;
Supplier verification and review;
Delivery support (logistics);
Official contract document support;
Quality control management;
Loading process supervision;
Other services are available upon request.
The Good sourcing agent services can benefit from two things:
1. Trading companies will protect their interests at any time during their business in China. They do not allow customers to purchase directly from their verified factory. They will “buy” from the factory and increase their profits, and then “sell” the products to customers around the world. The profits of trading companies are usually 10-50% higher than the value of Chinese invoices. Different products are different. Although the procurement agency service will be used in China as their own “helper, office and eye”, etc., the procurement agency service company will always protect the interests of customers in any business activities in China. All service fees are fixed and transparent, and the commission for purchasing agency services is only about 5-10%. They only charge a small amount of service fee orders by order or case. Obviously, customers can get more profit because they can buy directly from any qualified factory purchased and verified in China. If there are any related issues, the customer is free to contact the factory.
2. Trading companies usually do not have their own quality control inspectors, factory auditors and lawyers. We have a team of professional quality control inspectors, auditors, buyers and lawyers in China. Obviously we can provide a better one-stop sourcing agency business and provide better solutions and services for customers around the world.
If you are still working with a trading company, we recommend that you work with a Chinese purchasing agency.
How to choose the right sourcing agent in China?
Ask them for at least 3 references in your country or region. Check them before any cooperation.
Ask them about their business licenses and export licenses in China and check with local officials or third-party verification services before formal cooperation.
Ask them about enough professional questions about China’s upcoming orders.
If they can meet your needs from the above three aspects, if they are familiar with China’s manufacturing base, then you can rest assured to cooperate with them in China. Please note that 99% of Chinese businessmen are honest and reliable on a global scale.
Does the purchasing agency service make sense to the buyer?
We define a simple but not “hot” product – a bottle with a bit of customization. We contacted 5 agents and got an answer within a week. The agent’s offer appears to be random and does not match our exact requirements.
This is not surprising. Because they are part of a trading company, these agents are interested in developing ready-to-use products that are easy to sell.
So… Does it make sense for buyers to use Alibaba services? I do not think so. Just send an enquiry about Alibaba. Most of the responses came from trading companies.
When an importer wants to purchase new products in China, he basically has four options, three of which involve the use of a purchasing company:
How to find a purchasing agent in China
Of course, you can find suppliers (such as Alibaba or Global Sources) in trade shows or online catalogs, ensure they are serious through background checks and technical reviews, and start purchasing directly.
If you have the right organization to support this model and you can easily find a vendor, you don’t need a purchasing agent.
In other cases, you need to choose between three types of purchasing agents:
How to confirm China sourcing agent fees
If you find someone you can trust and already have extensive experience with the product line you are looking for, this might be a good choice. You pay the agent a fixed percentage of the FOB price of the order it follows (usually between 5% and 10%).
The problem is that importers rarely judge whether someone is trustworthy. I bet 95% of the commissioned agents get funding from the factory without telling the buyer. When something goes wrong, many of them actually defend the factory in front of the customer! This is why I usually do not recommend using this type of proxy.
I classify it as “highly involved” because buyers need to pay attention to things that are closely watched. These China sourcing agents are rarely professional and cannot really manage production and ensure good results. Once the order reaches a certain size, it is much better to manage everything with your own team.
If you buy a small quantity, you may need to work with a trading company if you don’t want to deal with all the details of Chinese production. They can find small factories that are interested in your small orders (usually not directly dealing with export customers).
Due to language culture and MOQ barriers, it is not easy for foreigners to directly cooperate with qualified factories in China. There are many “fake” factories on the Internet. 90% of the suppliers you meet online or at local trade fairs may be typical trading companies in China, but you never know. The reason is simple. On the one hand, more than 80% of actual factories still do not have their own export licenses. On the other hand, there are not enough excellent English workers working with small and medium-sized factories in China.
The trader increases its margin above the manufacturer’s price. This is why many professional buyers want to be “direct”. This is unreasonable, because if you negotiate prices, traders may still be cheaper than a larger factory (which is often more expensive in China than smaller factories).
The trouble with some importers is that the supply chain is still hidden. This is an effective question. Even if you buy from a dealer, you should check the quality of the product – unless the dealer pays the cost of a well-known third-party quality control company and displays the report to you.
As the saying goes, you can destroy the middleman, but you have to take over the functions he performs… or subcontract them to a third party!
If you place a large order, many manufacturers will take the time to respond to inquiries from third-party service companies. The service charge may be lower than the total order amount. This is why this option is best for large orders.
If you can justify the upfront investment, this is a good way to get a new product. You will benefit from a professional identification and screening process where you will get complete information about the supply chain.
Some of these companies sell their services as “project management”, “procurement” or “supply chain management”. They often adjust the pricing structure to each customer. Some of them act as traders and take possession of goods. Not all sub-suppliers are 100% transparent. I admit that this is a wide category…
How to find a China sourcing agent: 6 things you should know
As your import business grows, you need to find a product purchasing agent to help you, but it’s not easy. You don’t know how and where to find a good China sourcing agent. If you sign a contract with them, is it difficult to import from China? How do you think they are trustworthy? Should you use a purchasing agent or an office?
When choosing an agent to source products from China, you should keep the following 6 things in mind.
1. Hire a purchasing expert instead of a secretary
International buyers have thousands of products sourced from China, each with a different product. Sometimes it takes months or even years to understand the production mechanism of a particular product. A qualified China sourcing agent should be a product specialist. He should understand the product and how to plan quality control, cost, and negotiate prices further. He should know where to buy the product correctly.
That’s why you should only hire a purchasing specialist with more than 5 years of experience in certain industries. They can provide solutions for quality control, price negotiation, product research and product development.
2.Trust is everything
I think you agree with me and trust with China sourcing agent or brokers is very important. I would rather use a reliable, trustworthy but mediocre agent than a capable but unreliable person. Ideally, you need someone who is capable and reliable.
How do you judge whether your agent or representative in China is trustworthy? In many cases, the first impression may mislead you. You can do some online research to see if there are any comments or feedback. Give them some test tasks to measure their performance. You can learn about their professional ethics by working with them several times.
3. Buy office and China sourcing agent
Buying an office usually has more industry experience, and buying agents typically focus on certain areas, such as clothing and electronics. If your procurement project involves many industries, it may be better to use a purchasing office. If you work with a product, you can work with individual agents.
In addition, if your project is relatively large, it is best to use the purchasing office because you need many purchasing specialists to process your project at the same time.
Buying an office is usually a legally registered company, so if they break the contract, you will have a place and a person to chase.
Agents may offer lower rates than buying an office. For small buyers, a reliable agent may be a better choice.
4. Hide commission
It is an open secret that many China sourcing agents receive commissions from suppliers. But this means that your purchasing agents and suppliers are allies. Since the supplier is not willing to give them a commission, the purchasing agent will not offer the best price. They may turn a blind eye to quality issues. They may not recommend the best suppliers to you, but rather suppliers who tend to provide them with the best interests.
You paid a good service fee to your China sourcing agent, but they provided you with a simple purchasing report – the price was not real, the factory introduction was biased, and the best suppliers were ignored. All of these problems are caused by hidden commissions.
These commissions are so common that suppliers often hand them over to agents without their request.
So how do you ensure that your China sourcing agent does not betray you by hiding commissions?
First, you should sign a contract with your China sourcing agent to make it clear that you are not allowed to hide commissions actively or passively.
Second, contact other vendors at random to see if your product is cheaper.
5 contracts and verbal commitments
Some buyers believe that contracts are not important, so they work with purchasing agents and suppliers to make verbal commitments, bound by ethics and virtue.
We have a coffin buyer in the US and we are buying the office. The customer did not pay attention to their contract. Unfortunately, their suppliers offer low-quality products that refused the fourth inspection when their products failed three quality checks.
When we asked our lawyers for help, he asked to see the quality standards we agreed to in the contract, which we did not have. The lawsuit is still in progress. If there is no suitable contract, the easy litigation becomes complicated.
My advice is to sign a detailed contract with your purchasing agent, no matter how good your personal relationship with the agent. Ask a lawyer to help draft and review the contract.
You can also read our three-part series on how to negotiate a contract with a Chinese company.
6. Communication is often a problem
The first is the language. You should ensure that your purchasing agent speaks your language well enough to understand your email and draft and review English contracts. They should also be familiar with the products (parameters, specifications, parts and components, etc.) in your language.
You need a Chinese purchasing agent who is ready to start operations. If you want to build a long-term relationship with your agent, ideally, the agent should be proficient in speaking because in many cases emails are slow and you need to call them to speed up the process.
But in fact, Chinese people generally don’t speak English, so it’s best to send an email or fax to important things to make sure your agent knows you and won’t miss your key points after the call. .
Communication efficiency is a concern, especially in the presence of time zone differences. Your agent should respond to your email in a timely manner. Instant messaging can be used to speed up communications, while text messages can also be used for emergency contacts.