Currently, China is a major sourcing destination for companies all over the world. China is the greatest exporter in the whole world these days. It is not at all surprising that more companies these days are producing or importing their items in China. China is one of the most significant producers of industrial goods due to its low cost. If you want to run your company efficiently, direct sourcing in China may be a wise choice.
However, you must have heard of stories of scams in China's manufacturing sector, some imported goods are of poor quality due to dealing with unprofessional Chinese companies. Even though China is home to many competent manufacturers, it would be advisable to use caution while doing business with Chinese companies.
However, despite the large selection of goods available, many overseas consumers may find it difficult to make purchases due to language hurdles and inconsistent business procedures. Do you need the help of a sourcing company in China for this? Check out this blog for tips on selecting the best sourcing company in China.
What is a China sourcing company?
A sourcing company is an independent company who assists international companies in importing products made in China and who may also offer supplemental services such as packaging, customization, OEM, and quick delivery in exchange for small fees.
What exactly does a sourcing company do?
The goal of a modern sourcing company is to assist you not only in finding affordable goods but also in ensuring the stability and legality of your supply chain. What the top Chinese sourcing company agent can perform for your organization is as follows:
- Find new products and manufacturers.
- Audit existing suppliers
- Negotiate and draft your contracts.
- Guide you about the market trends and designs.
- Visit companies and conduct quality audit.
- Reduce your risk of importing any goods from China.
- Manage the process of shipments and logistics.
- Extra product customization services.
Why do you need a sourcing company?
Sourcing products directly from Chinese manufacturers is certainly a cost-effective option for your business. But it demands a lot of your time and attention for successful deal closure. There is a range of activities that goes into procurement. Apart from the technical aspects, effective communication is essential for dealing with suppliers. In China, you require proficiency in the Chinese language for communicating with various companies. A sourcing office in China can come in very handy while dealing with these communication hurdles. This helps in translating your requirements into a perfect final product.
A sourcing company in China handles multiple activities on behalf of your firm from start to end. The sourcing company can help you in:
- Identifying the right manufacturing partner across China
- Due diligence of the manufacturing capabilities
- Verification of licenses and certifications
- Communication on design requirements and finalization
- Preparation of contract
- Factory visits and sourcing of samples
- Completion of legal compliance
- Logistics and final delivery.
The major benefits of working with a China sourcing office are:
- Clarity in communication
- Better price negotiations
- Accurate due diligence
- Real-time factory visits and inspections
- Faster logistics and delivery.
In short, the support of a sourcing company in China provides a hassle-free procurement experience for you.
How to select the best sourcing company in China?
Companies do acknowledge the benefits of partnering with a sourcing office in China. But selecting an appropriate sourcing company can be very challenging. Sourcing is an activity where you invest a lot of money upfront. The sourcing partner should be capable of delivering the desired results at a low cost. Any delay in production, shipping, or clearance can cost you extra money. Similarly, lack of supervision in the quality aspect can result in product rejections. This might end up in legal battles that take up a lot of your precious time and money. So, the sourcing partner should have all the necessary expertise to deal with these issues.
Check out these factors while selecting your China sourcing company.
1. Local presence
Local presence of the company is inevitable when we talk about sourcing. The internet can serve only as a secondary source for verifying claims made by a company. The actual work needs to be done on the ground. A sourcing company with a local office and staff has many advantages while dealing with manufacturing companies. This can facilitate on-site visits for factory inspection. These visits are also helpful while communicating product requirements and quality parameters. The local presence of the company can speed up the paperwork and ensure faster clearance for logistics.
2. Level of quality assurance
A shipment that is only worth rejection is the last thing any company would want. For any business, quality products are a must for customer retention and business expansion. You should make sure that the sourcing partner has all the necessary capabilities for conducting quality assurance audits. This includes trained staff capable of carrying out QC inspection at every step of production. You can cross-check with the company regarding their manpower. It is a good idea to assess the capability of their staff by interacting with them on relevant topics.
3. Language competency and cultural familiarity
The Chinese business ecosystem is entirely different from the U.S and Europe. The cultural values are also different. A good sourcing company should be well familiar with these nuances. Having a good representation of Chinese-speaking candidates in their staff is a good indicator of their language capabilities. This helps in obtaining the best results while dealing with the manufacturer.
The ideal sourcing company should be fluent in both Mandarin and English. Make sure your main point of contact speaks and writes English well. Since you might occasionally need to speak with the Chinese office personnel directly, it would be ideal if they are also fluent in English.
4. Registration and licenses
China follows a strict law enforcement system. This means that the sourcing agent should possess all registrations required for operating a business. Any failure to comply with this can land your procurement deal also in trouble. Apart from the regular trading license, they should also possess registration for shipping, export, etc., as per the nature of the activity. You can take the help of a qualified lawyer to check these registrations and their validity.
5. Capabilities in logistics
Without proper logistics, sourcing activity is never complete. Make sure that the sourcing company has all the capabilities to arrange proper logistics. The mode of logistics has an impact on the final cost also. Customs clearance is also a major aspect of logistics. Any delays in these clearances will cost you a lot of money. Make sure that the sourcing office in China has expertise in dealing with these aspects.
6. Expertise and industry connect
From toys to electronics, Chinese manufacturers produce almost all products. But you have to make sure that the sourcing company is capable of identifying the best manufacturers for your product. For this, they themselves need to have proper domain expertise. Make sure that the sourcing company has well-trained staff with expertise in manufacturing and quality control in the respective domain. The company should have excellent connections with relevant industries to provide good results. You can check their website and client list to assess their domain expertise.
Chinese and Western businesses run very differently from one another. These discrepancies are primarily due to variances in culture, traditions, and thought processes. It is advisable to pick a sourcing company with extensive knowledge of China. Companies that specialize in sourcing from China will have a wide network of trustworthy contacts that are essential to your company.
7. Ability to handle documentation
Every step of the sourcing process requires a lot of paperwork. From advance payment to the final contract, all these documents require proper drafting and scrutiny. Most of these documents should be prepared in both English and Chinese languages. This requires expertise as the terms and conditions are crucial for timely delivery and quality. In case of any legal tussles, these contracts act as the key document. It is very important to ensure that the company in China has expertise in drafting these contracts.
8. Client customer reference and online reviews
Select a sourcing company that can provide you with actual references from other companies. You must not forget to visit all these reference websites and speak with them personally. Please inquire about the caliber of their offerings and how long they have worked with the sourcing company. Ask if they have any recommendations for any other sourcing company in China.
The internet is a valuable source for assessing a companies’ credentials. Customer testimonials on the company website and reviews on public platforms are useful in forming a rough idea about a company. But this can’t be relied upon as the ultimate source. With the advent of digital marketing, we can’t rule out the possibility of fake reviews and paid testimonials. In this context, speaking directly to some customers is a good strategy that you can adopt.
To look for warnings and the expiry date of the corporate page, utilize Google to know if a China sourcing company's customer service was poor in the past, according to many retailers. Presently have legal counsel in China. Nearly all B2B marketplaces offer their user’s company verification services. To find the actual factory of nearby companies, use company verification.
9. Expertise in the product you want to buy
Different sourcing companies specialize in various fields. You must confirm that the product you are interested in can be sourced by your sourcing company. You can request past order records from your company representative or buyer references. A sourcing company that deals with just one product might be hard to come by. Therefore, request buyer references from companies in your sector.
The quality of the product is crucial when purchasing goods from abroad. Ascertain the steps the sourcing company has taken to address quality issues. Make it known up front that you will not put up with a product of poor quality.
10. Business ethics
A few sourcing companies are allegedly receiving commissions from vendors. While such an agency can speed up the process of finding suppliers, the product's quality might be questionable. Make sure to only accept proposals from suppliers who satisfy your quality and certification requirements.
Conclusion
The decision to source products from China is a true game-changer for your business growth. It provides your company with exposure to a wide variety of products across different industries. It can bring cost optimization and increase your overall profitability. But it takes a lot of effort and time to engage in a direct sourcing activity. This can be a daunting task for your company. At this juncture, the services of a sourcing company in China can be very helpful.
Obtaining the quality products at the affordable price and within your timeframe can help your business prosperity. Take your time to select the right sourcing agent. The future of your business will depend on it to a great extent.
The sourcing company can act on your behalf to carry out the entire sourcing process from beginning to end. In a way, selecting the right sourcing company is crucial for your business. Make use of online and offline resources to verify the credentials of such companies. Once you complete a preliminary background check, it is always advisable to visit the company in person. Remember, a trustworthy sourcing company in China can take your business to new heights.
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