Why Use a UK Sourcing Agent to Import from China?

2021-10-14

What is a sourcing agent, why do you need one and how do they charge? Understand how this knowledgeable intermediary can help you navigate challenges and provide peace of mind so you can devote time on marketing and strategic activities.

What is a sourcing agent?

A UK sourcing agent takes care of the entire sourcing process for you. They represent you and  are your feet on the ground.

China is an attractive destination for foreign retailers. Tapping the China supplier network can open up profitable opportunities if you're selling on Amazon and other marketplaces. At the same time, sourcing products and suppliers on your own can feel like climbing a mountain without any gear. A sourcing agent can help you ascend to the top quickly and effortlessly.

Challenges of sourcing from China

Sellers in the west face a set of similiar problems when importing from China. Taking note of issues that may likely crop up and solving for them early can make your sourcing experience smoother.

Language and cultural barriers

Issue

  • You're not conversant in Chinese; your supplier is not fluent in English

Solution

  • Use simple English words and sentences, and more short sentences and bullet points in your emails.

  • State requirements in clear-cut terms. Don't assume that your supplier will figure out what you mean.

  • Request to speak to the same production manager about requirements, order status, quality inspections and so on.

  • Download WeChat for instant messaging and video calls with your supplier.

Issue

  • You're used to a direct communication style; your supplier communicates indirectly.

  • Your supplier may have a hierarchical structure based on respect and obedience to one's superiors.

Solution

  • Ask your supplier to confirm whether they've understood all your requirements.

  • Be polite and courteous, and even more so if you're speaking to an older and/or high-ranked employee.

  • If you can say it better through a phone call rather than in writing, proactively schedule a video call with your supplier.

Different time zones

Working over timezones is not a challenge when you:

  • Know the time difference between your country and the places in China where you're doing business.

  • Schedule your calls during a time that overlaps your working day as well your supplier's.

  • Designate a period during the day or evening to write to your supplier or respond to their emails or messages.

No real visibility into the status of your order

Though you can hold your supplier to their promise of delivering your order within 'x' days, you will also want to check in-between on how things are going. Here are some options you can explore:

  • Set a reminder to ask your supplier about order status

  • Follow-up in a weekly or fortnightly email

  • Inform your supplier that you may conduct random quality inspection

No visibility into raw materials

Inferior quality materials inevitably lower product quality. It is why you should avoid negotiating the price too low...or you'll get what you paid for! To ensure that your supplier is not cutting corners on material quality, you should:

  • Provide material specifications (ex: a certain type of plastic or grade of steel)

  • Hire a third-party inspection company to conduct a pre-production check

  • Assess the supplier's quality system through a factory audit before placing your first order

Receiving bad quality products

When you receive a few defective pieces, you want to make sure the supplier doesn't repeat it for other orders you were planning to place. Here are some steps you can take:

  1. Assess the damage

  2. See if the pieces can be repaired or they must be replaced, that is, new ones made

  3. Inform your supplier about the revenue loss caused and negotiate a free repair/replacement.

  4. If you can absorb the loss without a big impact to your business, think about whether you instead want to negotiate a discount on your next order

  5. Revisit product specifications with your supplier

Never make the full payment before you receive your order. A 30% deposit upon placing the order, and the remaining 70% after shipping reduces your risk. As the initial payment will cover a small part of production costs, your supplier will have the incentive to deliver quality products to receive the bulk of the payment. Any defects caught during quality inspections will only mean additional work for the supplier, which they could have avoided in the first place.

Dealing with crackdowns, labour issues and other events in China

Imagine waking up to an email from your supplier informing you that production will be delayed by a month. Turns out that the government has temporarily shut down their raw materials supplier as the factory did not meet environmental laws. This was the state of affairs about five years ago but is an example of how your supplier may wait to convey bad news to you.

Chinese suppliers' reluctance to ask questions if they don't understand a certain requirement or contact you quickly about news that may affect your order can prove risky to your business. Poor quality and delivery delays make your business look unreliable before customers. Providing acceptable quality and meeting delivery timelines is even more important when you're selling on Amazon for the first time and trying to establish your business.

Taking into account all the challenges discussed above, the most effective and convenient solution is to work with our sourcing agent.

What does a sourcing agent do?

A sourcing agent works for you. The company provides a range of services related to importing from China to the UK, USA or other country. Your agent will also help promote your business in the industrial belt you're interested in. If and when your product line grows, you will have an easier time getting suppliers on board to support your growing business.

Handling the entire sourcing process for many clients requires resources, knowledge and good relationships on the ground. The best sourcing agents have experience in their field. When you're custom manufacturing your product and have very specific product instructions, you'll be glad you have a sourcing agent as a go-between.

Here's a look at how an experienced sourcing agent helps overcome common challenges of sourcing from China

Manufacturing control

Why do you need a sourcing agent? To weed out the bad vendors, filter out suppliers who don't have the capabilities you need, and find the right factory to support your business.

Making inquiries and sending RFIs is a time-consuming process, and you're only getting started! As part of supplier evaluation, their business license, foreign trade registration certificate, bank account certificate, ISO 9001 certificate and customs registration certificate must be checked. A factory audit is also necessary to confirm that the supplier has the right processes, tools, engineers and quality systems in place. A sourcing agent handles  all key activities, saving you time for other strategic business activities.

Then there's the big task of sharing product details, which you must get right to avoid problems with your order. Communication gaps from language and culture differences can mean a lot of back-and-forth between you and the supplier. While this is necessary to provide a clear understanding of requirements to your supplier, it can also take up quite a bit of your time. An important service a sourcing agent provides relates to having your product made to your exact requirements. The agent ensures that your supplier grasps your requirements correctly so they can get the prototype or sample right the first time or they only need to make minor tweaks before it can be produced at scale.

Negotiate price and MOQ on your behalf

There is always room for negotiating the price, but you don't want to drive the price so low that product quality suffers. So, what can you do?

  • Get data on raw material costs for your product. Compare quotes and MOQs for your product or a similar product on online supplier directories.

  • Based on your findings, challenge suppliers that are quoting higher prices or citing an increase in raw material costs for the high quote.

  • Request quotes from multiple suppliers. Share competitive quotes from suppliers with those who're charging you higher.

  • Ask suppliers for their best pricing for different MOQs. For example, you can ask  the best possible price they can offer based on 500, 1000 and 3000 units.

Negotiate prices before making a commitment to the supplier. After the prototypes and moulds are ready, your supplier is unlikely to be open to lowering the price. They also know that you won't dump them and find another supplier after spending weeks and hundreds of pounds on tooling and prototyping.

What can a sourcing agent do?

A sourcing agent can bargain a price on you behalf. If the supplier is known to the agent, you're likely to get a better price, especially if you're placing a large order or interested in a long-term relationship. They can also help you make payments in your local currency rather than the renminbi and then convert it again to pay the supplier. Remember that your sourcing agent works in your best interests. If you feel like a quote is unreasonable, they will be more than willing to help you and the supplier work out a mutually agreeable deal.

Quality control

The initial sample is called the 'golden sample' as it is the basis on which the manufacturing contract is awarded to the supplier. It is evidence of the factory's capability to make your product. While your supplier may be more than capable to make your custom product, there is no guarantee that each of your products will be a replica of the awesome golden sample. This makes quality inspections crucial.  

A sourcing agent will usually assign a QC inspector/manager to conduct checks at different points during production, including:

Tooling: Make sure the moulds, fixtures, gauges, cutting equipment or other components and machines your product needs are in place before mass production begins.

In-process checks: The inspector will randomly select items from different batches for a quality inspection. This is to ensure your products have been made to a consistent quality. You receive an inspection report with the findings.

Pre-shipment checks: This is a final check of the order quantities before your shipment is ready to be shipped to you.

If all quality checks have been done diligently, you should have no complaints about how your products turned out.

A common answer to 'why do you need a sourcing agent?' has to do with the number of different services they pack into one turnkey service. For example, if you don't use a sourcing agent, you will need to hire a third-party quality inspection company to validate product quality. There is a small possibility that your supplier will wine and dine the inspector to provide a favourable report. Or the inspector may already be on friendly terms with your supplier and therefore less attentive to your needs. The workaround is to rotate inspectors (a hassle) or hire multiple inspectors (costly).

The best solution is to be present at the factory during production or have a locally-based business partner visit the factory at different stages of production to review quality. As this is not always possible, you can  keep a watchful eye on your order through a sourcing agent. Factories are fine with QC managers conducting checks and providing feedback, so make the most of the opportunity.

Order monitoring

Chinese factories have the ability to fulfil any-sized order on time. But they are more attentive to customers who have strict control over their order. So, if you were to sit back and expect that your products are being made, the reality may be different! When someone asks why do you need a sourcing agent, we say it is to ensure that not just quality but also lead times are as expected.

Without an agent, you would have to call your supplier a couple of times about the status of your order. Depending on the supplier, you cannot be sure if they're being truthful. When they know that your agent will make inquiries or visit them to check up on your order, they will give your order priority, which translates to timely deliveries and happy customers for you.

With our order monitoring service, you don't have to worry about late shipments and angry customer inquiries to your business. Our proven e-commerce order fulfillment process provides us full visibility into every order, from the time you make a sales inquiry to the  delivery of your shipment. We help you with various aspects of order monitoring and delivery, including:

Order status reporting: Stay updated with how your order is coming along. As we use only qualified manufacturers, you can rest assured that that delivery schedule is met. If lead times at the factory are affected due to any reason, we step in to ensure that your order isn't pushed back too much and delays are kept to a minimum.

Arranging shipment: Logistics is a key component of selling on Amazon. Customs duty and shipping costs are the responsibility of the Amazon seller. You're also responsible for ensuring the unhindered transport of your goods across international borders. We help you figure out a shipping strategy that reduces costs and complexity for you.

If you're wondering how do I get my products from China to the UK and exploring various shipping options, talk to us and identify a suitable solution quickly.

Assists with quality disputes

When your order is full of defective pieces, you want to understand the reason(s) and determine if they're fixable. It is rare to receive products that are unusable when a capable manufacturer makes them and third-party quality checks are performed. But when faced with the worst outcome, what course of action can you take?

You may want to sue the supplier but this is a stressful and costly affair. Moreover, enforcing foreign judgments in Chinese courts is difficult. If you do want to pursue legal action, arbitration is a better route. For this, your manufacturing contract must state arbitration as a dispute resolution clause requiring both parties to arbitrate their disputes. The judgment or arbitral award will be based on a number of factors, including, the size of your claim, the nature of the defect, whether quality specs were shared in a written contract, whether the shipment included a quality inspection report, and so on.

Most of the time, buyers and suppliers both prefer to sort the matter among themselves. The presence of a sourcing agent is useful as it paves the path for smoother communication. As the agent was managing sourcing for you, they can be held accountable for the poor quality. Depending on the situation and results of negotiations, your agent may help reduce your loss and find another supplier for you quickly.

Value-adds

What does a sourcing agent do apart from the services discussed above? Some offer value-adds such as design assistance, packaging solutions and free photographs for various ecommerce platforms. For example, they can help you with your design blueprints or provide custom packaging solutions if packaging is a key selling point of your product. Some may even assist with certain aspects of marketing, such as providing free product or product-related photographs for Amazon or other marketplaces on which you plan to sell.

How much do sourcing agents charge in China?

A majority of China sourcing agents work on a commission basis, while some have a flat fee model. There is no standard China sourcing agent fee. The percentage charged depends on the type of product and order size. The commission may be lower for bigger orders.

We have a transparent process that focuses on qualifying suppliers rather than connecting you to a known factory. Although that factory may be reliable, it may not be the right one for your requirements. Moreover, this practice can encourage what is known as a 'hidden commission' where the agent receives favours from factories for finding buyers. Remember, a good sourcing agent works for you, not the supplier. And in Maple Sourcing, you have an agent that works with integrity and honesty. 

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