China is a low-cost manufacturing country, so small businesses or startup ventures can move their supply or production to this region. Importing goods from China reduces the manufacturing cost, but there are other complications like language barrier, local knowledge, quality assurance, etc. when you go looking for a reliable product manufacturer.
There are many Chinese manufacturers found on the internet, but there have been scenarios about foreign customers getting scammed. Even if you get connected with a Chinese vendor at some trade show who was impressive but there are chances that it can turn out to be a nightmare. Corruption is an issue in a most populated country like China, The laws are also not strict, so the only way to find out that you are partnering with a realistic source is to meet and discuss face to face.
Fortunately, the best sourcing agent in China is well-versed in business culture, how to avoid potholes and where to find a reliable manufacturer. The China sourcing agent represents your brand. They are freelancers yet valuable assets.
Who can benefit from partnering with Chinese sourcing companies?
As you have no subsidiaries in China for searching, auditing, and building relationships essential in China then importing products will be nearly impossible. Finding ways around the Chinese business market, research, understanding, and conducting complex logistic processes [customs &shipping] as well as interpreting Chinese laws correctly is hard.
Companies with a diverse product portfolio
Finding a reliable manufacturer for a business with a diverse product portfolio is not hard. However, the diverse product manufacturing will need different suppliers with niche expertise or can find a supplier that manufactures all the variations. The sourcing agent has the competence to offer you a suitable solution because they have a huge vendor network.
Small business with niche products
Source niche products from China and make your life easy by hiring an expert sourcing local agent. Leverage their knowledge about import regulations and local legislations.
Companies needing substantial quantities
Supermarkets and wholesalers need specific products in large quantities. Importing from China helps to enhance your margin and supply chain as well as satisfy customers with good quality.
Good reasons to hire the best sourcing agent in China
1. Has the local knowledge
China's sourcing journey can be like walking in a dark room trying to solve a puzzle. It can seem to be a mysterious and intimidating prospect. The sourcing agent acts as a bridge and resolves the language, technical, and cultural barriers. Partnering with a person that is familiar with the business culture as well as speaks the language is a huge advantage. Local knowledge helps to build a strong, trustworthy, and long-term relationship. Alternatively, poor communication creates misunderstandings, which can cause more than just humiliation.
2. Helps find best supplier/manufacturer
Sourcing agents have experience and know the local business culture. The most crucial thing is they have nurtured a strong network of vendors. These influential relationships get business done better. When you are looking for a manufacturer in China, bear in mind that the Chinese vendor will also desire to evaluate your credibility.
It is not a one-way street but two ways. They will evaluate how your business and project can be beneficial to their business or not. For you choosing the ideal manufacturer and supplier direct you towards success. For the manufacturer choosing an ideal customer means moving towards a journey of success.
A reliable sourcing agent in China can make this path smoother for both. They will eliminate the hassle as well as make the process low-risk and transparent. The agent validates a new manufacturer or audits an existing supplier. You know perfectly whom you will work with.
3. Direct connection with the source
The sourcing agent removes the middleman, which you are unaware of. For example, B2B eCommerce websites are prevalent with middlemen posing as the manufacturer. It damages your chance to get great deals and in case of product-associated issues, it can get challenging.
Even if technically a sourcing agent is a middleman their role is defined clearly. They help you find a suitable manufacturer, get a quote, perform a factory audit in China as well as send a sample. Pre-shipment inspections are also done to ensure that stipulated improvements during sampling are executed. Your products are reviewed at every production stage.
4. Assists in project presentation
The Chinese suppliers or manufacturers assess every foreign customer to identify if they can do business smoothly. You also need to present yourself or your product. For example, if you present a rough prototype or incomplete drawing to the Chinese manufacturer for a quote then they may reject doing business with you.
Factories are never involved in designs and prototypes because it scares them. Your sourcing agent partner will look at the project before submitting them for a quote. If they feel that the prototype or drawing is not complete then they will first resolve this issue with you. It saves you the hassle of finding a prototype manufacturer to fix the incomplete sample.
5. Negotiate contract smartly
China is the number one country associated with outsourcing for years. They are working with top brands daily and are accustomed a lot to bargaining. So, they are more prepared for price haggling. Communication is crucial to find a great deal and negotiate contract terms. The draft contract will explicitly express responsibilities and constraints. For example, if the finished product’s dimension is not according to specifications then the supplier is responsible to ship a new batch with no cost or give discounts on remaining orders.
Chinese businesses fear and respect the law, so it is necessary to include legal action for non-compliance. The lawsuit is to be a last resort as it is time-consuming and expensive. Resolve product delivery issues and quality with the supplier. The sourcing agent ensures that the contract includes intellectual property rights, confidentiality, quality control, specifications, subcontracting, price, and deliveries.
The sourcing agent is well aware of when and how to negotiate. They are skilled in dealing with the local suppliers and are also established in China’s souring network. They are familiar with all the ins and outs, so help to significantly speed up the process. You can get great deals, as well as the sourcing agent, which ensures that all the parties are in synch for signing the contract.
6. No misunderstandings
The sourcing agents speak Chinese, so they can negotiate with potential factory owners directly without any translator. It avoids misunderstandings associated with different cultures and languages. The agents also speak English, so you can communicate about product proposals and details. Besides they are well-versed in business etiquettes including negotiations, so no concerns about anticipated pitfalls.
For effective sourcing, there is a need for clear communication lines. A reliable sourcing agent is your on-call representative. Anytime you need to liaise with a manufacturer, supplier shipping agent, etc. you can call them. It saves you time plenty of money as well as helps to fix issues successfully. Even if you are in a different time zone, you can communicate with your manufacturer in China via your sourcing agent.
7. Resolve issues
The procurement process can include some hurdles, but a sourcing agent will not just resolve the issues, but avert them before their popup. For example, you received a sample and it was not as per your expectation. The sourcing agent will work on behalf of your company and have the supplier make necessary tweaks. Thus, issues get resolved with less stress and hassle.
8. Avoid scams
All Chinese suppliers and manufacturers are not trustworthy. There are some black sheep in the industry. Research is crucial for outsourcing your project to manufacturers in China, especially if you are partnering with a vendor for the first time.
The local sourcing agent diligently visits the factory, performs on-site checks, verifies their documents, and conducts audits. They are familiar with international logistic processes. They know which documents are necessary at seaports and airports including how to prepare the documents for instant approval including tax forms and ISO certificates.
9. Saves time and enhances efficiency
Time is money for business owners and with it, they can create more development and value. The sourcing agent in China will not work free but by tapping their expertise, the expensive, time-consuming errors can be averted. They are experienced and have an extensive network and familiarity with the sourcing market in China that can bring profits to their customer.
As they reside in China, they can visit potential manufacturer’s facilities easily and quickly. Their responsibility is to tap the best deal because their commission is also based on this feature [make sure they don’t work on kickback commission from the manufacturer.
A sourcing agent is a shortcut to finding an ideal supplier. They eliminate the legwork and risk involved in working with a new manufacturer. Finding a reliable manufacturer is the first step towards starting an imported business and is certainly crucial. The manufacturer will be your business foundation; they regulate the stock which controls customers’ opinions and interaction with your brand.
Good manufacturer = High-quality goods, happy customers, more purchases, and good reviews.
Bad manufacturer = Low-quality goods, unsatisfied customers, returns, negative reviews, bad rep, and unsuccessful business.
Using a good sourcing agent means you are sourcing from a reliable supplier.
Significance of finding a reliable sourcing agent
A sourcing agent is liable to look for reputable suppliers manufacturing quality products. They must have the capability to handle everything on your behalf in China while prioritizing your best interest. Some duties of a reliable sourcing agent are given below.
It is his responsibility to keep inventory including raw materials, finished goods, or crucial services at an optimal level. It helps to keep the manufacturing costs as minimum as possible.
Purchase requests need to be verified. Requested items compared with the master list, clarify unclear items as well as recommend options. The sourcing agent will forward available inventory by stock verification and delivery schedule. Product specifications and prices will be verified for purchase order preparation and recommendations obtained from manufacturers for alternative items.
He is responsible for forwarding orders to the manufacturers, monitoring the production process, speeding up orders, and obtaining the finished goods. Compare ordered items to items received for comprehensive receipt verification.
Resolve shipment errors with the supplier, if any.
The sourcing agent will be the ears, nose, and eyes of your business in China. They visit the manufacturing facility and investigate to ensure that you receive what you expect.
The best factory can make mistakes or have delays….it is normal. However, the sourcing agent keeps regular contact with the supplier to ensure that the timeline is fulfilled.
A correct Chinese sourcing agent releases your burden up to 80%!
Trust your sourcing agent in China
The best sourcing agent in China works in the interest of your company, so you must have faith in them. It is a long-term relationship, so both need to have transparency and mutual understanding on every relevant matter. Importing from China is tricky, so allow the experts to do it!
Convey your needs precisely and clearly. Even ask questions like –
Where is your office situated?
Which cities do you visit regularly?
How many manufacturers or suppliers do you have? Where are they situated?
Which niche or industry are you experienced with?
Is your business registered? [If not in China then where]
Can I have a reference list of foreign brands you worked with or are working with?
What are your terms of payment?
Roles and responsibilities of sourcing agent in China
Usually, they understand your product and are willing to support you locally.
Search and verify Chinese manufacturer.
Negotiate contract terms and conditions.
Factory surveys, quality control, and audits.
They play the role of an employee but are independent contractors.
They will help in negotiating Minimum Order Quantities [MOQs].
They are even capable to make good ideas and design contributions.
They follow up consistently with the vendor and transport company, which ensures prompt delivery.
They are great negotiators and help you get good payment terms.
Quality control needs more effort, so they ensure that the requirement and plans are executed properly as drafted in the contract.
Hiring a reliable sourcing agent is worth considering!