China may sell more manufactured items globally than any other nation. The manufacturing industry in China is frequently referred to as the “Factory of the World” which is the backbone of the economy.
Due to its low cost, China is one of the most significant producers of industrial goods. Sourcing from China can be a great choice if you want your company to be cost-effective.
For many overseas purchasers, however, the enormous variety of products available as well as language obstacles and inconsistent business methods might prove to be a challenge. Certain sourcing consultants or agents can help you immensely in this situation.
In case you are totally unfamiliar with the very idea of finding Chinese agents, let us help you. A sourcing agent is, in its most basic sense, a third party who aids in your search for suitable suppliers in a certain nation. Typically, most of these sourcing agents are well-acquainted with the Chinese business conventions and practices and may even speak the local tongue as well.
A video, created by Stephen Bucalo, vice president of GEP and a 30-year veteran of strategic sourcing, discussed China Sourcing as a crucial element of a business strategy to achieve cost competitiveness.
He focused on the extremely practical and crucial subject of selecting the finest suppliers from a huge number of various providers in this wide and complex industry, outlining the key prospects, obstacles, and advantages of this strategy.
You can learn details on critical front-end processes including:
- Product and global region matching
- Supplier identification and also supplier evaluation covering a few risk assessments and quality audits.
You can also prefer to buy a book on a similar topic from the Logistic Bureau, which is quite easy to read and also an entertaining novel, about the topic of offshore sourcing.
In this post, we will also discuss different strategies to enter the market including going solo, using sourcing consultants or agents/brokers, trading companies, and also third-party service providers.
Importers have four options when considering sourcing from China:
1. Purchasing direct
Almost 80 percent of importers attempt to accomplish this. They prefer to exercise complete control of the whole process and like to forego the idea of paying any agents or a certain middlemen commission.
This is probably the best choice for you if you are structured enough to handle suppliers and if you can meet the minimum order quantities of suppliers.
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2. Using a commissioned sourcing agent
In China, many people are attempting to support themselves by offering this service. You can utilize their network and save a lot of your time if they are in the proper industry. Additionally, they can serve as your representative locally.
Unfortunately, more than 90% of them receive a secret factory commission. In China, this is “regular business.” Because of this, when something goes wrong, they frequently protect the factory!
A few specialists, including Dan Harris from the China Law Blog, share this opinion on the majority of sourcing agencies. According to his opinion, almost 90% of Chinese sourcing agents are nothing but crooks or incompetents and the vast majority of them can be both of these things. However, 10% are worth more than worth their weight in gold.
Therefore, you are advised to exercise caution.
How can you qualify any sourcing agent? We suggest you may ask any prospective sourcing consultants the following few questions before hiring them:
- How will you get paid, and also by whom?
- Can you personally pay a visit to the factories before or during production?
- Can you provide testimonials or referrals from your happy customers who are currently using your services and who also purchase the similar kinds of product as us?
Make sure you contact at least 2 of them to get confirmation.
- Do you perform quality inspections by yourself? Or do you resort to a certain specialized third-party?
- Will you get us a report every time?
- Will you send the production status update on every week?
- Can you share your management system with us?
You have to make sure that they have certain processes in place. The vast majority of these agents don’t follow any kind of procedure.
- What guarantee can you offer to us in case any supplier ever scams us?
- How can you help if shipments are behind schedule?
- And what you will do if we receive junk products in our warehouse?
- Are you located in the same area where our products will be sourced?
You can also do a quick search on the website globalsources.com and you can have an idea about the locations for your product category.
- In case, we keep re-ordering the same products to the same sources, will we pay less for your services after the first order?
All said and done sourcing consultants can offer you the following advantages that you cannot deny.
- Can be a time saver
- Can serve as an important communication link between your supplier and you
- Can help with negotiations
- Verify the credentials of your manufacturers
- A support of a large network of connections.
1. Buying from a certain trading company
If you cannot meet the MOQs, perhaps if you are a start-up or entrepreneur putting an early order, this is an excellent choice.
A trading company can easily outsource production to any smaller workshop that can take on smaller orders. Aside from this specific circumstance, we do not suggest using a middleman.
2. Using any third-party service company
Some Chinese third-party service providers offer a service in exchange for payment. Everything (supplier names, the procedure used, etc.) is open and transparent.
Although it will require investment from your business before production can begin, it is a wise choice, if you anticipate receiving sizable orders in future.
Such agents were previously very uncommon, but we are confident that this trend will continue. The most effective ones typically function as a procurement office and are well-organized.
Finding the ideal China sourcing consultants can be a key step if you are considering sourcing products from China. If you can receive top-notch goods at a genuine price and also on schedule then it will help your company to expand nosiness greatly. Spend some time selecting the best sourcing agent. Your future of the company depends on it.