How to Choose a Good Sourcing Company?

Sourcing in China is proven more and more a trend, however, for new importers, it’s usually daunting to source direct from China. B2B websites like Alibaba is convenient, however, according to an article, over 75% companies shown on Alibaba are either traders or traders who disguise themselves as factories. Also, there are many shady companies or even some scammers, as there is almost no filtering system, or the filtering system is too easy to bypass.

 

So, after having some lessons, more and more importers learned that it’s very important to hire a good sourcing company to find the direct manufacturer and manage the whole sourcing and quality control process.

 

How to choose a good sourcing company?

 

1). Look at the reputation

The reputation of a sourcing company is the number one thing that needs to be kept in mind. Make sure that the organization has a list of prominent clients. If the company has nothing to show in terms of a track record, do not fall prey to its promises. There is a high probability that such companies will just eat into your finances and fail to deliver core results. On the other hand, you are in safe hands by hiring a well reputed company. 

 

2). Consider the investment 

Hiring a sourcing company involves initial investments along with a commitment of offering funds which would be utilized for one’s sourcing requirements. As a business owner, you might be at the crossroads of sourcing or direct purchasing. However, low cost product sourcing through an agency will ultimately push your brand towards steady growth. But ultimately the decision regarding hiring sourcing services lies with businesses. If you ascertain that the investment is not worth it, wait till you find lower sourcing company fees. 

 

3). Look around 

Do not commit a contract with the very first sourcing agency you approach, compare them; be careful not to use the sourcing agencies that approach you by group emailing, decent companies won’t do group emailing to approach clients. What an organization is offering might sound promising, but there might be others who offer better rates or terms. Seek initial consultation with multiple sourcing agencies. Ask questions regarding their methods, low cost supplier associations, business approaches, and seek information regarding the markets where their presence is dominant etc. You can also compare rates of agencies to make up your mind. 

 

4). Ascertain regulatory practices

One of the most disappointing situations you can be in is your sourcing operations being halted, due to regulatory violations. In such cases, your business might have to bear the brunt of hefty fines and even face legal loopholes. For this reason, it is important to know that your chosen sourcing service provider sticks to international and local laws and regulations. The issue runs deeper, as suppliers might be the one making the violations without the knowledge of agencies.

 

5). Contractual obligations

The wrong sourcing partner can wreak havoc in your path to profitability. It all comes down to the terms of doing business, which are sometimes not in favor of investors. In case of market risks, regulatory hassles or other risk scenarios, sourcing partners should be accountable. While that is ideally the case, there are shady service providers who leave investors out in the dark when trouble arises. Hence, it is quite crucial that business owners go through the terms and conditions thoroughly before committing. 

 

The above-mentioned points are prerequisites that will help you arrive at a decision regarding sourcing partners. The right company can make a marked difference for your business, and take it to newer heights. Some of the distinct advantages of availing sourcing company services include- 

 

a.   Low costs of raw materials, energy costs and overhead costs. 

b.   Low costs of skilled and unskilled labor resources. 

c.    Clear path of sustainability through sourcing operations. 

d.   Consistent and rising profitability with passage of time. 

e.   Protection against prevalent risks in low cost country marketplaces. 

f.     Swift and hassle-free logistical capabilities. 

 

So, if you are keen on experiencing the above-mentioned benefits for your business, finding the appropriate sourcing partner is essential.