Are you trying to import any goods from China for the first time? Although the internet has made it possible to do B2B transactions from anywhere in the world.
However, if you are sourcing products from China for the first time, then you cannot take the risk of going it solo. These days, most companies prefer to appoint a Chinese procurement agent who is based in China and familiar with the business environment of that country.
When you are considering procurement outsourcing in China, which is located on the other end of the globe, it can often be too hard for an importer to see every nitty-gritty of the process.
Therefore, while outsourcing from China, it will be worthwhile to have a certain local presence that can help you to find factories in China.
Who is a China procurement agent?
An agent stationed in China who organises various purchases and transportation of goods and equipment of the company is known as a China procurement agent.
Procurement agents purchase commodities, raw materials, finished products, and anything else required for corporate operations as opposed to wholesale buyers, who buy products for resale.
You must have heard that most schools, universities, institutions, and even government offices appoint certain agents for managing their stock.
Since agents are responsible for keeping an eye on product quality and refilling inventory, they also have to keep an eye on market conditions and price swings.
The procurement agent helps to confirm product prices and gets suggestions for replacement products. They also supervise purchase requests and approve payments for the goods bought. They will handle any problems with product delivery and coordinate the production schedule of their business with that of numerous suppliers.
For example, the procurement agent can work with the supplier to secure the products in advance if they signal that there is going to be a postponement in product arrival.
Procurement agents usually work closely with various divisions inside corporations. To organise and file all purchase documentation, they collaborate with the finance staff.
They deal with paperwork, expedite orders, plan shipping, and resolve disputes. By compiling, analysing, and listing patterns, agents even provide and control strategic information connected to purchasing.
Agents occasionally collaborate with teams to deliver educational sessions. Small businesses may ask their purchasing representative to handle all of their purchasing needs.
A procurement agent's job entails managing a variety of duties, such as:
1. Supply chain management
2. Operations
3. Data analysis
4. Record keeping
5. Logistics
6. Accounting.
In addition to having strong organisational and quantitative abilities, procurement agents need to possess a few key competencies to succeed in their roles.
Because they coordinate tasks, procurement agents need to be proficient in both oral and written communication. In order to maintain professional connections and collaborate with many teams, agents need good communication skills.
Additionally, they are skilled negotiators, which helps them persuade suppliers to sell their goods at prices that do not harm the company.
In addition to having strong research and analytical abilities, procurement agents also use these abilities to discover trustworthy sources for raw materials while making business decisions. They are also adept at resolving issues.
A procurement agent can logically and promptly resolve problems like damaged items or a delivery delay through effective communication.
How to qualify your procurement agent?
If you need product sourcing for Amazon from China and want to hire an agent, you must ask the following few questions.
1. How will you get paid?
2. Can you visit the factories before or during production?
3. Can you provide any referrals or testimonials from your satisfied customers who may have used or are still using your services?
4. Are they also buying similar products that we are planning to buy from China?
5. How do your other clients check the quality of products in China?
6. Do they hire any third party for quality inspection?
7. Can you coordinate China inspection service on our behalf?
8. Will you get an update on the production status regularly?
9. Can you share your management system with us?
10. What guarantee can you offer that a supplier will not scam us?
11. Are you located in the same city where the factory is?
12. Can we get any discount if we offer a repeat order for the same product from the same company?
It is always important to call the previous clients of the procurement agent and try to know about his professionalism. Also, it is important to know what kind of management system the agent has.
Has he got any office with staff and whether all their staff can speak in English or not. The most important thing to know about the quality of products and how your agent can help with that.
Why should you hire any China procurement agent?
There are many reasons to hire a trustworthy agent in China particularly when you are sourcing from China for FBA. Your agent can effectively interact with your supplier in their local language and decide to whom to place the purchase order.
Moreover, they have business insight and are aware of the current market prices, which can be beneficial when negotiating your products price.
Many manufacturers would rather prefer to speak with people from their own country who are familiar with the business environment and organisation in Mandarin Chinese.
Your profits may get slightly reduced, but there are fewer communication issues as a result.
Besides that, there are several other reasons to have an agent on your side in China.
Let us try to explore some other reasons below.
1. Knowledge of industry trends
A procurement agent has knowledge about market developments that have an impact on product prices. They are aware of the top quality products for your sector and ways to get them from the source.
Making the most of the expertise of an agent, while you concentrate on your business is possible when you have an agent arrange for purchasing.
2. Coordinating the delivery schedule
The issue of time is another one. Lead times are usually extremely short in Chinese manufacturing since so many distinct processes are happening at once.
A skilled procurement agent is knowledgeable about manufacturers and their schedules. The agents may choose the best manufacturers for their clients, saving both the manufacturer and your time.
3. Organization of the purchase process
There are several components while the purchasing process in China such as:
Placement of order
Production
Quality monitoring
Schedule follow-up
Arranging shipment
Tracking shipment.
Instead of you managing this procedure personally, having a procurement agent in China can be much more effective and efficient.
A trustworthy agent is familiar with the rules and laws that govern exporting and importing commodities.
4. Negotiation
Your net income is impacted by the agreements you make with your vendors. It is crucial to make sure the deal you strike will be profitable financially.
Your China procurement agent will undoubtedly handle this by negotiating product prices with regional Chinese vendors utilising their experience and expertise.
Due to their familiarity with the local language and culture, they have a higher chance of negotiating a much better deal on your behalf than perhaps you could.
5. Vendor relationship management
A procurement agent functions in China as the representative of your company and makes crucial business transactions. In order to maintain their company, especially in a place like China, importing businesses must maintain relationships with vendors, which a competent agent can help them do.
They maintain the requirements of the business and communicate with vendors about purchasing issues. By preserving excellent relationships with vendors, procurement agent ensure that businesses continue to obtain a steady supply of their inventory.
6. A positive outlook for your company
A responsible purchasing representative will also contribute to the company's reputation improvement.
Consumers today choose to use services from businesses that use sustainable practises since there is more emphasis on these practises in the workplace.
The agent will seek vendors who share your company's values and match their obligations with those values as your company's representative. This enables organisations to follow their values on ethical and sustainable business practises.
Conclusion
The product procurement of an organization are coordinated by a China procurement agent by collaborating with suppliers and other departments.
They locate trustworthy local vendors in their area who provide premium goods at the most competitive prices. To place orders for products and services for the business, they enter into contracts with these suppliers.
A good agent keeps track of inventory levels, evaluates the need for purchases, bargains contracts, and also decides on the final stock price. Additionally, they coordinate and oversee product deliveries. Procurement agent contribute to the upkeep of beneficial relationships with suppliers, which benefits the bottom line of your company.