Best China Sourcing Agent Company

Sourcing Agent VS Sourcing Company
Types Of Sourcing Agents
Full-Service Sourcing Agent
Do You Really Need A Sourcing Agent in China?
The Truth About Buying Wholesale Or Manufacturing In China
10 Tips To Find A Good Supplier Or Manufacturer In China
Steps After Contracting The Supplier Or Manufacturer
Who Needs A Sourcing Agent In China?
Problems With Sourcing From China
Important Considerations Before You Choose A Sourcing Company
What Critically Important Services Do Good Sourcing Agents Provide?
How much does a sourcing agent charge?
Red Flags And Questionable Practices

How To Find The ‘Right’ Sourcing Agent For YOU

A sourcing agent is a person or company who finds the product you want to sell or the right manufacturer for the product you want to make.

Many sourcing agents restrict their role to just finding a good manufacturer for your requirements and leave the rest up to you.

Unfortunately, outsourcing manufacturing in China, is not as simple as just finding a factory and giving them the contract to make your product.

If you think the manufacturer will be able to produce and deliver exactly what you wanted without on-site inspections and follow-ups, you are in for a shock.

Working with a manufacturer remotely can be very complicated and challenging unless you have knowledge and a lot of experience in the country.

Sourcing Agent VS Sourcing Company

A sourcing agent can be just one person. That one person can be good, but they only have a certain amount of time and expertise. A sourcing company has several sourcing agents. If one gets sick, another can take over.

In addition, there are engineers, buyers, negotiators, shipping specialists and more, that can support a sourcing agent if you are dealing with a sourcing company.

Almost in every case, it is better to work with a fully-staffed, professional, experienced sourcing company.

One-Stop Supply Chain Solution for Outsourcing Manufacturing to China

A good China sourcing agent, in an established sourcing company, can find the right factory for you.

But this does not eliminate all the problems of manufacturing. What you need is a solution that will allow you to sleep nights and do it at a lower price than you could get locally.

Unless you have a lot of resources already set up in China and have the expertise to manage the details of the manufacturing and shipping processes in a foreign country, you will likely need some help. That’s what a full-service sourcing agent is for.

The services a sourcing agent provides can vary. But most companies wanting to outsource their supply chain will need help with the following:

Finding the right supplier or manufacturer
Price negotiation
Communicating & further negotiating with suppliers as needed
Overseeing the production process
Quality Inspection at various stages of the process, not just at the end
Coordinate logistics and negotiating with third-party parts and resources suppliers
Product compliance and testing
Providing you with updates
Arranging storage & shipping
Managing the logistics of production and shipping

Of course, you can work with different companies to do different tasks, but if you can find the ‘right’ China sourcing agent it can significantly increase your profits and customer satisfaction.

Look For A Sourcing Agent That Can Help You:

Create a better product,
Negotiate a good price,
Manage the entire process including quality control and
Make sure it gets delivered on time, every time.

So, how do you filter your list to find a professional sourcing agent that offers everything you need to successfully manufacture your product in China?

Click Here For The Top 10 Questions To Ask A Sourcing Agent

Types Of Sourcing Agents

Purchasing Agent

When the client has already done all the research and has found a factory but they don’t know about the quality and other things. A purchasing agent goes to inspect the product, verify the quality, negotiate the price, and ship it out to the client.

Manufacturer’s Agent

This is the type of person or company you are likely to come across most often when you attend trade shows in China.

A manufacturers’ agent or manufacturers’ representative is a self-employed salesperson who represents one or more manufacturers on a commission basis.

Representatives may sell to wholesalers, retailers, government agencies, original equipment manufacturers, hospitals, schools, etc.

The companies that an agent represents are called principals. A manufacturers’ agent may represent several principals who produce compatible, but not competitive, lines. For example, an agent may represent one company who manufactures skis, another that makes ski boots, and still others who make sunglasses, caps, gloves, and other clothing for the skier.

Companies like these are not in the business of finding the right company for your needs. Since every manufacturing company is a specialist in a certain type of product, it will be a stroke of luck to find a great fit through a manufacturer’s agent.

Be careful about over-promising agents with the attitude that the manufacturer she represents is a “good enough” match for you. This mentality does not result in a high-quality product for your customers.

A professional sourcing agent will match you with the ‘right’ company for your specific requirements, likely at a cheaper price, and you will definitely get better quality.

A manufacturers’ agent may be a good way to go if you have seen the product and want to buy exactly what you saw.

Custom Manufacturing Agent

Some sourcing companies act as a “custom manufacturing agent”.

They take over the entire process and give you a net price. You don’t have to do anything. They will just deliver the completed product to you.

While this may be the right way to go in some cases, there are some limitations:

You have no control over the manufacturing company they use and they will not tell you who the manufacturer is.
You would have very limited control in customizations and quality.
There is no opportunity to use the manufacturing company’s expertise in further improving your product or lowering the price by doing things a little bit differently.

Compare this to a full-service sourcing company that will often bring in its own experts and engineers to help improve your product or the manufacturing process. This is in addition to the experience and expertise offered by the manufacturing company’s people. There is no opportunity for this type of role in a “turnkey” custom manufacturing contract.

Full-Service Sourcing Agent

A full-service sourcing agent, as opposed to a “turnkey” manufacturing agent, will work with you at every stage of the manufacturing process.

You are in the driver’s seat and the sourcing agent’s role is to provide the best resources for you to choose or modify.

This is the best way to get the quality and price you want.

Arcadia sourcing can work with you on a “turnkey” basis so all you do is place an order for your product, OR as a full-service sourcing agent where you have control. Your choice.

Trading Agent

Trading companies or trading agents are specialists that cover all export and import operations and procedures. They often buy products in one country and sell them in different countries where they have their own distribution network.

This kind of company mostly works with high production volumes of products such as raw materials, chemicals, generic pharmaceuticals, etc.

Do You Really Need A Sourcing Agent in China?

Without a doubt, there are many advantages of sourcing products from China. You can get lower prices, better quality, and more support for your creative ideas, while still getting consistent, reliable delivery of products.

But it is not easy to know what you have to know, who you have to know, and to have the skills required to get the job done.

While we recommend hiring a professional sourcing agency you would likely want to know why you can’t do it yourself so you can save some money.

This guide is for people who are willing to invest the time and effort to make sure you get reliable suppliers, consistent quality, and on-time delivery…all at a reasonable price.

Sure, saving money is always a good idea. Here are some realities of buying wholesale or getting products manufactured in China.

The Truth About Buying Wholesale Or Manufacturing In China

There are several identifiable steps in sourcing products from China.

Finding the right supplier or manufacturer

Finding the right China manufacturing company or supplier is the first big challenge. If you get this wrong, you likely to lose a lot of time and money (and sleep).

You will find yourself going through a long list of details and logistics that you know nothing about unless you are from China and have been working in that field for a number of years.

Even if you have experience in working with suppliers and manufacturers in other countries, China is still China. Just as every country has its own personality and its own ways of doing things, so does China.

The important thing to understand is even if you have had a negative experience, you are no closer to finding a manufacturer / supplier you can trust.

10 Tips To Find A Good Supplier Or Manufacturer In China

You might find that each step takes a lot of time and labor, but your time will be well spent. By going through this process you will be more likely to find a good manufacturer or supplier for your products.

Create an ideal supplier profile
Search B2B directories online and get references from friends and contacts.
Attend tradeshows – this is a smart idea. But understand that there are hundreds of thousands of potential manufacturers and suppliers that are eager to get a contract with your business. Be prepared and super-organized so you can sort through them.
Reach out to potential manufacturers. Be sure to say the right things so they are interested in working with you. Do a bit of research on each company so you know what kind of client they are looking for. If you think you will be a good fit for that company, go ahead and contact them to get a quote. Be clear on what you want and in what time frame. If you want to try a small order to begin with, find out what their minimum order quantity (MOQ) is.
Assess suppliers based on cost. Remember, the lowest price is not necessarily the best manufacturer or supplier for you. Many companies will give you a low-ball price to get your initial business, but they will charge for every little thing you add or change so your net price could be much higher than competitors. Sometimes a low price might mean low quality or unreliable delivery problems. Be alert and on the lookout for scams. It is easy to make mistakes at this step.
Get references and check out the references from each manufacturer and supplier. Once you have a shortlist based on cost comparisons, contact several of their references and dig deep into their experiences. At a minimum, find out how long they have been dealing with the company, how they handle logistics, cost upgrades and delivery times.
Perform background checks and do you due diligence. In addition to checking references they provide, talk to others in the business to see what kind of reputation they have. Do this before you talk to their references so you can ask more pertinent questions to their past clients.
Make sure you either know the language and culture or have someone at your side who does. Not knowing the language is a major disadvantage. It is very difficult to develop a relationship or negotiate prices, terms, sort out logistics, set and monitor quality controls.
You will get best results if you take the time to physically go to China and visit the factory or warehouse where your products are going to come from. This is one step that is a must. You really don’t know who you are dealing with until you actually go and tour the factory. It is not at all unusual to find out that you are actually dealing with an individual instead of a company and they will shop out your contract to one or more suppliers and manufacturers.
Do your negotiations face to face as much as possible. Meaningful negotiations can only happen face to face. If you want to avoid “surprises”, take the time to negotiate in person as part of your due diligence.

Steps After Contracting The Supplier Or Manufacturer

In our experience, you need to be able to dedicate a minimum of 1-3 hours a day (per supplier) to manage what happens in China. If you don’t have this time, you might need help from a service provider that can handle the following tasks:

Communicating & further negotiating with suppliers as needed
Overseeing the production process
Quality Inspection at various stages of the process, not just at the end
Coordinate logistics and negotiating with third-party parts and resources suppliers
Product compliance and testing
Providing you with updates
Arranging storage & shipping
Managing the logistics of production and shipping

Who Needs A Sourcing Agent In China?

In reality, unless you have your own team of experienced people stationed in China, it would be wise to hire a full-service sourcing company for some of the process or even have them look after the whole project for you.

Depending on what you are trying to do, it might be a good idea to hire several specialized companies for certain functions. However, even then you would want to have a person, or one company to bring together all the parts of the project. A sourcing company can handle that function or help you find and screen the right person for the job.

The following are situations where we strongly recommend getting a full-service sourcing agency at least for the first few years:

1) People who have no experience in importing

If you are looking for a wholesale supplier for just one product, maybe you will be able to find someone to buy from without a lot of problems. Maybe.

If you are interested in manufacturing in China, there is a LOT to think about and coordinate. China is such a big country and there are so many ways of doing things you will quickly find yourself drowning in the logistics.

One approach could be to use a sourcing agent for a limited contract while you figure things out.

Even in that case, if you are working with more than one product or improving versions of your product, you will save a ton of time and money working with a good sourcing agency.

2) People who have multiple product categories to deal with

The work involved in sourcing one product is the same work you will have to do for each additional product from China.

If you need to contact a minimum of ten companies to find one supplier or manufacturer, you will have to contact a minimum of 100 companies if you have ten products.

A China sourcing agent, based in China, will do the job for you in one-tenth the time it would take you. They will handle all the details efficiently and also consolidate the warehousing and shipping so you save money and headaches.

Coordinating suppliers, following up with the manufacturer for quality control, product testing, and dealing with the paperwork of international shipping are valuable services you can outsource to an agent in China.

3) Large retailers, supermarkets

If you are working with hundreds of products and categories you likely have your own people to coordinate things.

Even in this case, a China-based sourcing company can help manage supply chains better. No matter what you are doing, there are circumstances where an experienced, local sourcing agent in China will help you get better quality and reliability from your activities.

When you are manufacturing thousands of products in several categories, having a person actually visiting the factory will make a big difference in the quality and pricing you can get. No matter how good the factory regular in-person visits will ensure you consistently get good products and service.

All the products retail giants such as Walmart and Target offer are arranged through sourcing agents or trading companies.

4) People who deal in specialized product categories

If your company works with a highly specialized product or category such as building materials, chemistry-based products, medicine, etc. it will be valuable to have someone in China coordinate all the suppliers and experts needed to produce the quality you require.

A sourcing agency in China can not only coordinate all the details, they can also help bring together experienced experts to improve the efficiency of production and reduce costs.

Problems With Sourcing From China

Sourcing from overseas is not easy. There are many uncertainties involved with any long-distance transaction. It is difficult to follow up with suppliers and manufacturers when you don’t live there.

You cannot keep an eye on the quality of the products you buy.
Communication between you and suppliers is inefficient and not clear if it’s not face-to-face because you are dealing with people of different culture and language.
A sourcing agent knows the ins and outs of the business in their country, they can visit the suppliers constantly to see what’s going on and report to you immediately if there is anything goes wrong. They can ensure you access trusted suppliers so that you get the qualified products.

With a sourcing agent on your side, you are not alone!

Our sourcing agents live in Hong Kong and China. They are “from” China and know how to navigate it far better than you will.

To find out what a China sourcing agent company like Arcadia Sourcing can do to help you call 1-888-659-1018 or email rbpande@arcadiasourcing.net .

Important Considerations Before You Choose A Sourcing Company

Completely Avoidable Problems…

Who wants to have problems like:

A mediocre manufacturer
Great quality product the first time but subsequent shipments are poor quality
Poor and inconsistent communication from the other side of the world (it’s not 1994 anymore)
Unit costs that aren’t razor-sharp
Slow production turnarounds – there is always a “problem”
Lack of control over the supply chain
Rigid supply options, lack of component flexibility
Storage problems as your product is waiting to be shipped
And the list can be endless…

What Critically Important Services Do Good Sourcing Agents Provide?

If your company does not have a dedicated team of experts managing the manufacturing in China, it’s a smart idea to hire a full-service sourcing company.

No matter how good the manufacturer, it is critical to have a team managing the supply chain end to end. There is no way around it.

Many decisions need to be made at the right time, by your representative, who is present at the factory.

If you don’t have this, there can be delays or you could have problems with quality.

If you have hired the right China sourcing agent for your needs they will:

Find you the best possible manufacturer suitable for your project
Find the best sources of materials for your product
Proactively work with you to figure out the best design and source components so you can produce high quality at a lower cost
Save you tons of money by catching mistakes and inefficiencies before it’s too late
Personally visit & audit potential factories and provide an unbiased report to help you make the right decision
Work with you throughout the process from developing prototypes to finished product and shipping.
Request new quotes & place all re-orders on your behalf
Monitor your production & provide regular live updates
Handle all logistics in organizing freight, importing, customs and any legal issues that come up from time to time
Save you money on freight & international payments
Make sure you get a good quality product delivered on schedule
Proactively improve the quality, reduce costs and efficiency through ongoing product development.
Renegotiate prices down for you & improve your supplier terms
And so much more…

Ultimately, you will want to hire a truly professional China sourcing company that you can trust to make the decisions that you would make if you were personally managing the process…assuming you have the experience and expertise to do so.

7 Tips To Help You Choose A Reliable Sourcing Company

How much does a sourcing agent charge?

By now you can understand that having the right “partner” in China can be a real asset for your business.

With a good China sourcing agent, not only will you have more peace of mind, but you will also increase profits.

The big question most people want answered is whether or not they can afford a good China sourcing agent. Will they still be able to make a good profit after all fees are paid?

Simply put, if you don’t get expert help, it will be very difficult to get a good product consistently and delivered on time. You really do need someone in China to represent your interests.

If you choose the right sourcing agent in China you will likely end up paying less than you would otherwise.

Having said that, you can pick and choose the services you get from a sourcing company and use them only when needed. This might be your best option depending on your project and circumstances.

1) Fixed salary for each project or a certain period

If you are working with an individual sourcing agent to do some simple sourcing work like finding suppliers, translating, and communicating with the suppliers you could pay a fixed salary to do a certain specific job, or for the whole project.

This arrangement gives you the flexibility to hire one person for each part of the project where you need help. You won’t get the overall coordination and efficiency of having a full-service sourcing company looking after your project, but if you don’t need a lot of people maybe you could save some money.

In many cases, you won’t need ongoing help for certain parts of the project, so you can reduce your costs after the initial setup.

A small project could be ok with this type of arrangement, but if you are going to do a lot of business over several years it would be good to find another payment model.

An individual China sourcing agent may or may not be professional and the manufacturers and suppliers they find may not be the best available. The best manufacturers and suppliers like to deal with sourcing companies they can trust to bring good clients for them.

Larger and more established companies like to deal with larger and more established sourcing agent companies rather than individuals because they know what they are doing. It is less work for the manufacturer or supplier and the client is more likely to be happy so they get repeat business.

Costs for a larger sourcing company can be a little higher, but that is offset by better service and accountability for ensuring quality, timely delivery, and more.

2) No extra charge but gain from the price difference

The China sourcing agent can provide good suppliers and help you negotiate a good price for a good quality product.

In the absence of this kind of support, you really don’t know what you are going to end up with. Maybe you will get a good product or maybe you won’t.

A sourcing agent can help you get set up the first time, then when you need to re-order or want to make improvements in the product, they can help you again.

From a sourcing agent’s point of view, they would prefer to have a continuous relationship with you and the factory they have matched you with. This allows them to cultivate a relationship. In Chinese culture, a lot of things are possible if you have a relationship. Without this, you will likely keep experiencing problems and you won’t know why.

The best suppliers and manufacturers are not easily available on the Internet.

Each manufacturer has a specialization. A sourcing company carefully considers your needs and finds the right company to fulfill your order. You often end up paying less for a better quality product…with less hassles.

3) Percentage service fee based on product value

There are two types of percentage fee-based arrangements:

a) Straight commission on delivery of the product.

The sourcing agent charges between 5-10% of the total order. You pay as soon as the order is shipped.

This can be a great way to go with a simple product and a simple transaction. Your sourcing company will make sure your order is shipped.

Problems can occur if there is no incentive for the souring agent to make sure you get the best price and quality.

The exact percentage of commission you pay depends on the order quantity, order frequency, and order value. The smaller your order, the higher will be the commission fee.

There is a bit of a conflict of interest with straight commission because the more you pay for the product, the more commission for the agency. Why would a sourcing company find the cheapest manufacturer or supplier for your needs?

Few sourcing companies are willing to accept service fees of less than 5% for consumer products. Some companies may be willing to do the deal for 3% or less service fees, but you are likely to end up with much higher product prices as is the case with most online suppliers (like Alibaba suppliers). Or you could end up with poor quality goods even you get the perfect sample at the beginning.

b) Commission includes value-added services – like quality control and shipping logistics is a better arrangement than straight commission because the sourcing company is on the hook for delivering a quality product.

The amount of commission you pay will depend on the size of the order and the services you require from the sourcing agency.

4. Hourly rate

The sourcing agent is paid according to the number of hours it takes to get the job done. If it is a simple task where you can realistically estimate how many hours it will take, this is a good option.

However, in many cases, it is difficult to know how much time a task will take. Plus since you are not there to monitor the work being done hours can be inflated. Some of the risk can be reduced with online record-keeping systems, but it is still difficult to know exactly how many hours the agent is actually working.

5. Flat fee

You pay a fixed amount that is agreed at the beginning of the project. The sourcing company starts the research right away and you will receive a list of suitable suppliers and an evaluation of which one is best for you.

There will be no further costs.

The disadvantage here is that you will pay in any case – whether you choose one of the suppliers the agent researched for you or not. The sourcing agent may thus not put that much effort into his research because they will get paid either way

The advantage is if you are likely to need the sourcing agent’s services, again and again, they will do their utmost to make sure you have a good experience.

6. Mixed payment structure

In the mixed model, you will pay a flat fee until a certain amount. If the order value exceeds that threshold, a commission fee will be charged.

The advantage is that you don’t have to commit immediately. Instead, you can first order a smaller amount to see how good the supplier is without paying much to the sourcing company.

You can also test how well the cooperation with the sourcing agent works without entrusting them with a large amount of money right away. You can see how a mixed model looks like in the example below.

Red Flags And Questionable Practices

In any industry, there are companies that are not trustworthy, unprofessional, or even incompetent. Here are a few things to look for so you can screen out a potentially problematic China sourcing agent.

1. Kickbacks and Bribes

When you have a large order, some sourcing companies may offer to do the work for free for you, but they have an arrangement to collect a commission from the manufacturer.

In some cases, the sourcing company might be tempted to collect a fee from you and also get paid a commission (bribe) from the manufacturer.

Neither of these scenarios is in your best interest.

If the China sourcing agent is getting paid from the factory, any decisions they make will be in favor of the factory, not you. Instead of making sure you get the best quality for your investment, a sourcing agent with a conflict of interest would set you up with a factory that offers a little lesser quality and maybe longer delivery times but pays a higher commission.

When it comes to quality inspections a sourcing company that is getting paid from the factory might be willing to fudge their report a little so you approve the product. This practice is certainly not good for cultivating a long-term business relationship, but from your point of view you would be out money and you wouldn’t be able to sell the lower quality product anyway.

It is a very good idea to ask a direct question and get it in writing that the sourcing agent is NOT getting paid from the factory or anyone else other than you. This way you know exactly who the sourcing agent is going to try to make happy.

2. No Business License Or Office

An “independent” sourcing agent may offer to do the work for you at a lesser price. They sound like they know what they are talking about but don’t have a license or an office and operate from their home.

Maybe if you have a very low budget you might be tempted to do business with that person, but there is a chance you might not be happy with the experience.

It’s better to stick to an established sourcing company that has a professional presence in the market.

Being licensed and having an office are the basics for any established business. If at all possible, visit their office and check out the business license to make sure it all looks good.

3. Very Slow Service

You will find “companies” that are willing to take your money but they don’t have the connections or experience to find a good fit for your type of business. They will make promises but repeatedly break them for one “reason” or another.

If a company is taking too long to find the right factory for you, consider it as a definite red flag.

It is best to hire a sourcing agency that has experience in your industry and product line. They will be able to understand the subtle differences between your product and a similar one and set you up with the right factory.

When it comes to inspections, they will know what to look for, so you can count on their judgment that you will get exactly what you wanted.

4. Poor Language Skills

Manufacturing is all about details. It is critical that your representative (sourcing agent) is able to communicate what you want to the manufacturer.

It is just as important that they understand what you are trying to communicate.

In addition to knowing the language, they have to have better than average understanding and communication skills.

Experience in the industry plays a big role in being able to understand and communicate with the client and the factory, but it is still very important to have excellent personal communication skills.

The location of the sourcing agent is a good indicator of how sophisticated their language skills are. Also, if the sourcing agent has been living in the country you want to source from for years, they will probably be able to speak the language well.

You will be able to judge their personal communication skills when you talk to them.

Takeaway:

No matter what the charging method is, you should evaluate whether the agent can reduce the overall procurement cost, improve the sourcing efficiency and ensure the quality of goods, and so on.

Arcadia Sourcing company is capable of providing all services you need to successfully and profitably manufacture or source products from China. Our fee structure is customized to meet your needs so you can make a healthy profit while getting quality products, delivered on time.