Today, China has achieved the status of “The world’s manufacturing hub” as most businesses are now depending on Chinese manufacturers to produce all their products because of the cost benefits that China can offer, as the labour costs in China are relatively low as well. Also, there is the availability of abundant manpower resources.
Nowadays, even a small businessman can also sell Chinese products through various e-commerce platforms like Amazon.
No doubt to run any business, a business owner has to manage numerous tasks. If they break up their different tasks into small steps and try to allocate time for each of these steps, they can manage them properly.
Together with various organizational operations, most businesses have to deal with many different important activities for managing internal operations effectively.
If you are sourcing from China for FBA, then you may also break up all your tasks so that you can hasten your import process.
However, there is another smart way you can deal with the sourcing activities from China. That is by hiring any trusted China sourcing agents who can look after the entire tasks related to procurement in China.
If you are new in the business, then the idea of a China sourcing agent may be a little confusing and may prefer directly sourcing from China. After all, by searching on the internet on the website of Alibaba or Global Sources, you can get details about many suppliers.
However, remember with that route you have to spend at least 1 to 3 hours per day to manage and source products from any Chinese supplier. Can you afford that much time?
Your time will be devoted to these activities:
Identifying new suppliers that can manufacture your products at the price and quality that you need
Develop your new products/styles with the help of these suppliers
Management of the supplier relationships
3. Shipments follow-up
4. Managing crises (if any)
If you cannot manage all of these through directly sourcing from China, then looking for a Chinese sourcing agent will be the right choice.
Directly sourcing from China
If you are importing from China, then you have the following few choices. Each has got its own pros and cons.
80% of importers go for directly sourcing from China while buying goods since it is the most affordable alternative.
Despite being the most affordable choice, this process has requirements and challenges. Direct contact with suppliers gives retailers access to a plethora of knowledge.
They are in touch with a few reliable providers, so they know who to buy from.
This is probably the best choice for you if you are structured enough to manage suppliers and if you can meet the minimum order requirements of vendors.
2. Commissioned sourcing agent
A trustworthy China sourcing agency aids buyers in locating suppliers and producers. Retailers discover and negotiate with the aid of local liaisons. They gain commission from the deal.
How can you qualify a sourcing agent? You may ask the following few questions before hiring them:
How do you pay Chinese suppliers?
Can you visit the factories during production?
Can they provide any referrals or testimonials from your satisfied clients who are using/already used your services?
How do you manage China quality control?
Or do you get QC done by a certain specialized third party?
Will you send us an update every week on the status of production?
Can you share your management system?
How will you guarantee that supplier will not scam you?
Are you located in the same city where production will happen?
If we re-order the same products and also from the same sources, then can offer a discount on your service charges after the first order?
3. Working with a trading firm
A trading company can assist businesses in placing smaller orders with Chinese vendors.
If you are not in a position to meet the MOQs, then most likely that you are a start-up company putting your first order, then this can be your best choice.
A trade corporation may outsource production to a more compact workshop that takes on modest orders. Aside from this specific circumstance, we do not recommend using a middleman.
4. Service company selection
Similar to using sourcing agents, e-Commerce businesses can connect with supplier contacts by collaborating with a service provider and utilising the provider's relationships. Instead of paying them on a commission basis, you give them a flat rate.
Everything is open and transparent, including the processes used and the names of the suppliers. Although it will require investment from your business before production can begin, it is a wise choice if you anticipate receiving sizable orders in the future.
Such agents were earlier not very common, but we are sure that this trend may continue. The most effective service companies are typically functioning as a procurement office and they are pretty well-organized.
How can you find a China sourcing agent?
You can start searching for your prospective business partner once you have learned what makes a successful sourcing agent. To help you let us offer you a few suggestions:
1. Determine what you need
Ask yourself, "Which product am I sourcing?" before doing anything else. What are the requirements you have in regard to the desired product? What Minimum Order Quantity (MOQ) are you willing to start with?
Along with the specifications of the product, you should consider the attributes your supplier or manufacturer should possess, such as lead times and working conditions.
Once you have outlined your preferences, your possible sourcing agent should do the same based on the previously specified criteria.
A sound plan must be used when selecting an agent because they will handle the most crucial business operations. You will find an agent more quickly and be able to handle problems along the route if you have a clear plan.
2. Set your budget
When it comes to creating a budget, you must be both flexible and realistic. As a small business, you must be prudent with your money.
To understand your financial constraints, you must go to your strategy. It is also a good idea to create an emergency fund to cover any unforeseen costs.
3. Research on different sourcing agents
Finding potential sourcing agents is simpler after your specifications and budget have been established. You can eliminate those that are too expensive, don't provide the services you require, or are not active in China.
The easiest approach to choose the ideal agent is to read reviews or even get in touch with a few of their clients to learn more about how they operate.
To reduce your list, you should also ask possible sourcing agents for a quote. Ask them about their pricing and payment schedule to see if you can negotiate a better deal.
Don't forget to request their licence as well to confirm the authenticity of their operation.
4. Negotiate the price
When you have made your decision, you should try haggling over the cost. Find out whether they give discounts or if their prices decrease with each subsequent order. After the agent has provided their terms, consider all the information before making a choice.
5. Document all information you agreed upon
Always keep a record of the details that you and the sourcing agency agree upon. This will be your go-to reference for future difficulties like production hiccups or shipments that are delayed. In the event that things go wrong down the road, the contract will also safeguard you against fraud.
Where to find your China sourcing agent
The number of sourcing agents has expanded over the years along with the growth of online vendors who source their goods.
Here are several websites where you could be able to find your following business partner:
1. Search engines
Search engines like Google and Bing make it simple to find China-sourcing agents. You can get a list of possibilities by searching for the term "best China sourcing agent"
It is your responsibility to review their websites to determine whether they meet your needs. You must carefully examine sourcing agencies and firm websites because unprofessional-looking ones could be warning signs.
2. Freelancer websites
Lacking the funds to hire a sizable sourcing firm? You might wish to think about working with a few of the reputed freelancer sourcing agents. In contrast to huge corporations, most independent agents don't often work full-time and may only provide a restricted range of services.
To make sure the agent you are hiring is qualified for the position, you will need to conduct a more extensive background check if you decide to hire a freelancer. When interviewing someone, always read the feedback from previous clients and be sure to ask pertinent questions.
We have gone through many different options to source your products from China. However, always maintain your company's best interests in mind whether you are going for directly sourcing from China firm or an independent agent, especially if you are sourcing goods from China.
Your main source of income will undoubtedly be your products; therefore, it is critical that you work with a partner that can assist you in expanding your company and achieving your objectives.