The Chinese market is still a mystery to any consumer who is unfamiliar with Asian business culture, despite the growth of internet platforms like Alibaba, Made in China, and Global Sources.
The commerce between Chinese suppliers and foreign purchasers is complicated by the physical proximity, the language barrier, and also the variations in commercial interactions, which raises the possibility of fraud.
This is the basic reason why it is necessary to work with a certain sourcing agent while dealing with any Chinese company.
In 2013, China rose to become the top trading nation in the world. This Asian behemoth displaced the United States as the number one nation less than 10 years ago. China shipped items totalling a staggering US$3.3 trillion worldwide in 2021.
They continue to be the top supplier of goods that are ready to sell for worldwide e-Commerce companies. However, sourcing items from this nation has its own difficulties, particularly without a China sourcing agent.
In addition to the language barrier, a quick Google search does not ensure that the results are of high quality. The majority of e-Commerce businesses choose to work with a certain China sourcing agent for ensuring the quality of the products.
Finding proper products from reputable vendors at a reasonable price requires the use of sourcing agents. They are important players in China supply chain.
However, hiring a China sourcing agency comes at a high initial expense. However, the advantages of obtaining this professional assistance outweigh the high cost.
What may happen while sourcing from China?
You need to conduct a supplier search on Alibaba or Global Sources from your office in another country. For each supplier, you must be able to dedicate between one and three hours each day for supplier sourcing and management.
This period will consist of:
Finding new vendors who can provide your goods at the appropriate costs and levels of quality
Helping these suppliers create new designs or goods
Continuous management of the supplier’s relationships, including communication, quality assurance, shipment tracking, and, if necessary, crisis management
If your team won't be able to accomplish this, you should think about hiring a third-party sourcing agency to assist you in China.
How can you qualify any sourcing agent?
Before choosing a potential sourcing agent, we advise you to ask the following questions to any prospective Chinese agent:
Who will be paying you, and how?
Can you tour the factories prior to or during production?
Can you offer recommendations or reviews from pleased clients who utilize your services and purchase the same kind of goods as we do? (Be sure to receive confirmations from two of them by contacting them.)
Will you conduct China inspection on your own? Or are you going to turn to a knowledgeable 3rd party?
Will you always receive a report?
Will you receive a weekly update on the production situation?
Can you provide us access to the management system? (You must confirm that they have established procedures. The vast majority of Chinese agents do not adhere to any protocols).
What assurances do you provide in case one of our suppliers defrauds us?
What if deliveries are delayed?
What happens if we get a bad product at our warehouse?
Are you close to where our goods will be sourced? (If you conduct a short search on globalsources.com, you will get a sense of the key region for your product category.)
Will you reduce the price of your services if we repeatedly order the same goods from the same suppliers?
Main roles that a Chinese agent can play
Any sourcing agents must take care of the best interests of their foreign clients. Your ability to purchase in China with fewer dangers and expenses is their main objective.
1. Control risks
Risks can surface at any stage of the Chinese purchasing process, including the choice of a Chinese partner, the payment process, the production process, and the shipping process.
A Chinese agent must be able to assist you at every level by providing services for supplier research and selection, buy condition verification, accurate manufacturing tracking, and product inspections (before, during, and after production).
These services that the agent in China is offering are necessary to guarantee your peace of mind during the order process and the quality of your goods when they arrive.
2. Control costs
Limiting buying expenses is another benefit of ordering from China. Buying cheaper goods of equivalent quality is the most frequent reason given for purchases.
But even in China, there is no easy fix. Cutting costs on raw materials equals savings for a Chinese factory. In China, an agent's responsibility is to ensure that the factory complies with the terms of the contract and to fully explain to the buyer the effects of a price drop.
An agent's responsibility in China also includes defending clients from unintended expenses brought on by improper shopping practices there.
The total expenses of importing or distributing goods might be significantly affected by any mistake or oversight made throughout the purchasing process in China (substandard products, poor finish, poor materials, quality problems, high customer returns, etc.).
Companies that can benefit from a China sourcing agent
Any form of e-Commerce Company can benefit from outsourcing its buying requirements. However, some businesses gain a lot from cooperating with a certain China sourcing agent:
1. New e-Commerce companies
Chinese imports almost always have competitive prices. Without any China sourcing agent, it can be challenging for start-up companies to actively participate in their business. It might be overwhelming to deal with Chinese import companies.
2. Companies experiencing rapid growth
Against popular assumptions, a merchant might suffer from quick expansion and growth if they are unable to meet high demand. In such a situation, the reputation of the company may be at stake as they cannot manage.
To a certain extent, the business owner can reduce his burden of China products sourcing with the help of sourcing agents. The business owner can now concentrate on managing the company’s growth after he is free from this time-consuming process.
3. Retailers offering multiple products
Retailers need to contact at least 10 possible suppliers for each product in order to make sure they are obtaining the best deals. If an online store wants to sell 10 items, it means 100 separate suppliers will need to be contacted.
Benefits of hiring any China sourcing agent
Many nascent e-Commerce businesses and start-ups are cautious to work together with local sourcing partners due to a few bad examples that came to light. It is interesting that these examples are isolated. Retailers should not be disheartened and consider not working with sourcing companies as there are numerous advantages to doing so.
1. Competitive pricing
There is certainly a good reason China is the world's largest importer and exporter of products. A good sourcing agency can always be able to find manufacturers in China for meeting retailer demands.
Few retailers have dealt with Chinese manufacturers before. Numerous accounts exist of shopkeepers who were displeased and annoyed by product adaptations. The distance and linguistic barrier are a hindrance.
These issues can be resolved by sourcing agents. They are proficient not only in the Chinese language but also in doing business with local suppliers. A shop can use this technology to get exactly what they need with few risks.
3. Quality Control
Having a quality checker on the ground is one of the finest benefits of outsourcing procurement. The majority of sourcing agents serve as the retailer's local representatives. They can speak with the provider directly to express their worries and quality-related issues.
How to find the suitable China sourcing agent
It is interesting to note that not every source agent is made equal. Finding trustworthy liaisons to do the job is crucial if you want to fully benefit from their range of advantages. The low cost of imported Chinese items carries numerous risks.
To ensure that the products meet the retailer's requirements, it is best to work with a seasoned sourcing agent. But before you sign a contract, you might need to check the sourcing agent's qualifications.
Verify the accuracy of their address, number of operating years, and level of Chinese and English ability. Request references and a meeting with the sourcing agency in question, if at all possible.
Retailers are free to handle their own product sourcing. However, selecting this option may disadvantage an e-Commerce store, particularly for newer enterprises. In the end, a sourcing agency can offer your business the most affordable prices on products from reputable vendors. They remove uncertainty from a risky business decision.
For any customer, whether knowledgeable or not, procurement in China is risky. Once you have made the decision to purchase from Chinese vendors, you must ensure that your purchases are made correctly and also the risks are kept to a minimum.
For this, like many global businesses, you can rely on a Chinese agent with local offices who will support you so that now you can concentrate on growing sales in your home country rather than resolving issues in China.
The Chinese agent must pay attention to you and be open and honest with you about all he does. Proposing a follow-up using an effective computer system (ERP), personalized services, and the ability to plan them together is advantageous.