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Mastering China Sourcing: Your Best Top 1 Ultimate Agent Guide

China sourcing refers to the process of procuring goods or components from suppliers based in China. It involves identifying, evaluating, and selecting Chinese manufacturers or suppliers to meet business needs. China has become a global manufacturing hub due to its competitive costs, vast production capabilities, and wide range of industries. Companies engage in China sourcing to take advantage of cost savings, access a large manufacturing base, and tap into the expertise and resources available in the country. Effective China sourcing involves careful supplier selection, product specifications, negotiation, quality control, logistics, and cultural considerations. It requires understanding the complexities of working with Chinese suppliers, managing communication and language barriers, ensuring product quality, and navigating international trade regulations. Successful China sourcing can contribute to business growth, cost optimization, and access to a global supply chain.

Nowadays, sourcing agents and sourcing companies play an increasingly important role in managing international supply chains. However, many small businesses are still confused about sourcing agents, especially there is ambiguous and outdated information online misleading them.

Solution Question System Problem Solving Concept

1. What is a China Sourcing Agent , Sourcing Company?

A sourcing agent is a person or agency that represents a buyer to source commodities, buy products that are out of the buyer’s reach. Sourcing agents or sourcing companies are often needed in international trade. Traditionally, a sourcing agent is only to source suppliers for his client. Indeed, the services provided by sourcing agencies can include selecting the right supplier, making price negotiations, following up production, quality control, product compliance and testing, shipping, etc.

Sourcing company is a specialized enterprise dedicated to conducting purchasing activities on behalf of other organizations. Through functions such as negotiation with suppliers, contract management, and supply chain management, procurement companies provide services such as procurement strategy, planning, and execution to their clients. Their goal is to help clients obtain the best products or services at favorable prices and conditions through effective procurement processes and strategies, while reducing procurement costs, risks, and complexity. Procurement companies typically possess expertise, supply chain networks, and procurement experience to support clients in achieving success in their procurement endeavors.

2. China Sourcing Agent VS Sourcing Company

In the global market, people often take these two words as one meaning. For example, if you want to find someone souring for you, you can say – I need a “sourcing agent” or a “sourcing company”, it doesn’t matter. But actually, these are two different concepts.

Sourcing Agent

A sourcing agent can be an individual sourcing agent, who can be hired as a full-time agent for you. This individual sourcing agent usually has only one or two people, and they usually work at a small office or home office.

Some of them may have several years of experience working in a trading company or sourcing company. These individual sourcing agents can be found on some freelancing platforms (like Fiverr, Upwork, etc.), and a few of them may have also set up their own websites on Google.

Sourcing Company

Sourcing company, also known as sourcing agency. It is easy to understand, a sourcing company is supported by a team of expert sourcing agents and organized apartments, like sourcing, quality inspecting, warehousing, and shipping systems. They can integrate supplier resources more efficiently and can serve many different buyers at the same time.

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3. What Services do China Sourcing Agencies Provide?

Sourcing service fees vary according to the work scope you order from the agent. So make sure you have made it clear about the service scope and charges before you start cooperation, in case some potential disputes occur. That’s why I cover one chapter to introduce the service of sourcing agents and sourcing companies.

Following are the main services most sourcing agents provide

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4. Who Needs a China Sourcing Agent or Sourcing Company?

People who have no experience in importing

Importing from overseas involves too many complicated aspects, like sourcing the right suppliers, following up production, product testing and quality control etc.

If you have no experience in overseas purchasing, you can find a sourcing agent/company to help you start your first importing journey.

People who have multiple product categories to deal with

Selecting 2 reliable suppliers for 1 product may need you to contact 10+ suppliers. Suppose you are looking for 10 products, then you need to contact at least 100 suppliers and verify them. In this case, a sourcing agent/company can not only do the tedious job more efficiently but also consolidate all the goods you required.

Large retailers, supermarkets

Is it saying that a large importer with abundant funds and experience doesn’t need a sourcing agent? Certainly not! Large enterprises also need them in order to manage their supply chains better.

Take the chain supermarkets as an example, they will need to buy thousands of product categories. It is almost impossible for them to go to each factory and purchase every product by themselves.

Retail giants such as  Walmart and Target  are all procured their products by sourcing agents or trading companies.

People who deal in special product categories

Besides daily necessities, there are some special product categories such as building materials, chemistry, medicine and so on. Take the Chinese chemistry & medicine industry as an example, it is quite difficult to find suppliers neither at the exhibition nor online. So you have to entrust a sourcing agency or trading company who is specialized in the industry to help with your business.

Three advantages of sourcing agents and sourcing companies

A reliable sourcing agent/company plays an important role in international trade purchasing.

a. They can find suppliers who offer a competitive price and good quality. A good sourcing agent can help you find reliable factory . Because a good agent/company has accumulated a lot of qualified factories’ resources already that you may not find online.

b. They can improve sourcing efficiency. A local sourcing agent/company can help you overcome barriers of culture and languages. He knows exactly what you want, and negotiates with suppliers about the details of the products, and in turn delivers the message to you in fluent English, which greatly reduces the communication cost.

c. Reduce your risk of importing from overseas. A good sourcing agent/company must be experienced in dealing with product production, quality control, compliance certifications, import and export process rules, and international shipping.

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5. How does Sourcing Agent or Sourcing Company Charge?

There is no specific charge standard as there are thousands of sourcing companies and individual sourcing agents around the world. The sourcing agent fees vary greatly according to the service scope, the cooperation methods, the product category, and the amount of the order.

To give a general idea about the sourcing service fees, I introduced 3 common charging methods of sourcing agencies in the following part.

Fixed salary for each project or a certain period

Many individual sourcing agents charge a fixed salary for each product or a certain period (week/month). They usually charge less than $50 for each product. Pretty cheap, right? And you can talk to your suppliers about your products and build a business relationship directly.

The disadvantage is that these agents are usually not professional, and the suppliers they find are usually not the most cost-effective ones.

Some experienced buyers prefer to hire an individual full-time sourcing agent for weeks or months, to do some simple sourcing work like finding suppliers, translating and communicating with the suppliers. If you want to import from Chinayou can hire a full-time China buying agent for around $1000 a month to work only for you.

No extra charge but gain from the price difference 

Many individual sourcing agents or sourcing companies use this charge method. Usually in this situation, the sourcing agent can provide good suppliers with more competitive prices or better product quality, which is impossible for the buyer to find these suppliers through normal channels, like some online wholesale websites.

In turn, if the buyers could find their competitive prices on their own, they would never consider such sourcing agents.

Percentage service fee based on product value

Charging for a certain percentage of the whole order value is the most common method among sourcing agents or companies. Why? Because they usually provide other services like follow-up the production, quality control, shipping arrangement, consolidation and so on. So, they will charge a certain percentage of the value of the goods as the service fee.

In China, the common service charge is around 5-10% of the total order value. Another point, the product categories and the size of the order also greatly affect this percentage. For example, if the order is for some products with high price competition and high demand like rolled steel, or the value of the order is over $50 0,000, the service charge may be about 3% of the order value or maybe less.

Usually, few sourcing companies are willing to accept service fees less than 5 % for daily consumer products. It does exist some sourcing companies that may try to attract you with 3% or lower service fees, but you’ll end up finding that product prices are much higher than most online suppliers(like Alibaba suppliers). Or you can be delivered with poor quality goods even you get the perfect sample at the beginning.

Takeaway: No matter what the charging method is, you should evaluate whether the agent can reduce the overall procurement cost, improve the sourcing efficiency and ensure the quality of goods and so on.

6. Practical Tips to Find Reliable Sourcing Agents or Agencies

Choose Chinese sourcing agents VS Non-Chinese sourcing agents

As China is the largest consumer goods exporting country, Chinese sourcing agents account for a majority of the world’s agents. So I will divide sourcing agents into two types, China sourcing agents, and non-Chinese sourcing agents, and list their differences as well as pros and cons separately.

Pros and Cons of Non-Chinese Sourcing Agents

Generally, sourcing agents in other countries are natives of a certain country and help buyers in their own country purchase from other Asian or Southeast Asian countries, such as China, Vietnam, India, Malaysia, etc.

They usually have their own offices in both the purchasing country and their own country. The team usually has several people, and they mainly service some large buyers.

     Pros

  • Local businessmen are easy to access these local sourcing agents.
  • You don’t have to worry about language or culture barriers when choosing your local sourcing agent so that improving communication efficiency.
  • If you purchase a large order, finding a local sourcing agent would make you feel more reliable.

     Cons

  • These sourcing agents mainly serve big customers, and not very friendly to some small businesses.
  • For major clients, their service commissions are higher.

Pros and Cons of China Sourcing Agents

Compared with Non-Chinese sourcing agents, China sourcing agents charge much lower service fees.

The service commission or profit of China sourcing agents is much lower. Besides, they have more professional sourcing teams and richer Chinese supplier resources than non-Chinese sourcing agents.

However, they might be unable to communicate with you as smoothly as your native agents due to language differences. In addition, the Chinese sourcing industry mixed good and bad agents, which makes it hard to distinguish the good ones.

     Pros

  • Low labor cost and lower service fees
  • China sourcing agents can provide services for small and medium businesses.
  • They know more about large supplier systems in China.
  • They can give lower product quotations with more professional sourcing teams.

     Cons

  • Language and cultural barriers
  • Hard to distinguish good ones in so many China sourcing agents

Choose the sourcing agents specialized in a certain item 

If you want to import a lot of different types of daily consumer products, choose a sourcing company that has already sourced a lot of daily consumer goods for previous buyers.

If you specialize in importing certain industrial products, then find the sourcing agent specialized in this industry like building materials, medical products. Because these sourcing agents must have accumulated a lot of good suppliers in this industry and can give you sound purchasing and production advice.

Choose the sourcing agent located close to the industry cluster

Each country has its own industrial clusters  which are groups of similar and related firms in a defined geographic area.

For example, if you want to purchase daily items from China  ,and the sourcing agent of Yiwu is a good choice. And for clothes, the sourcing agent in Guangzhou  will have more advantages.

Locating close to the industry cluster is convenient to contact factories and reduce intermediate costs, like freight costs, quality supervision fees and so on. For example, if you want to purchase electronic products, the sourcing agents in Yiwu will not have a better price advantage than the sourcing agent in Shenzhen.

If you want to source products from China, here is a table of industrial clusters for some industry categories in China for your reference.

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Ask the sourcing agent if he can provide happy clients’ referrals

A good sourcing agent that provides value would have a lot of happy customers, and they will be happy and proud to provide you the happy customer contacts. So you can check out what the sourcing agent is best at: Are they good at finding the best price or inspecting the product? Can they provide good service?

Choose the sourcing agent with longer sourcing experience

Sourcing experience is a vital factor you should take into consideration. An individual agent who works as an agent for 10 years can be much more resourceful and more reliable than a sourcing company established only for several months.

The number of years he has been in business is proof of his track record. This means he has continuously provided his clients with a good quality business. Other than being knowledgeable in choosing suppliers he should also be extremely capable in the areas of quality control, logistics and audit.

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7. Where to Find the Best Sourcing Agent in China for Your Business

You may ask me, where can I find a reliable purchasing agent? Don’t worry, I’ll show you two main places to find a sourcing agent and a sourcing company.

Google

Searching on Google is always the first thought for most people when encountering problems. In fact, Google does help in most cases, it gives useful information. If you want to find a sourcing agent in one country, such as China, you can just type in “China sourcing agent”, and there will be a list of Chinese sourcing companies in the search results.

When you are checking out one of the sourcing websites, you need to pay attention to the content, the years of establishment, company photos, contact information, the team size, infrastructure, customer reviews and testimonials, blogs, etc. Only a professional team will invest enough money and energy to optimize its websites on Google.

Google search sourcing agent china01

Fairs 

In addition to looking for China sourcing agents online, you can also pay a visit to fair . For example, if you want to import from China and get a China import agent, you can visit the Canton fair, Hong Kong fair, and the Yiwu international fair , etc.

But looking for a sourcing company at a fair is more suitable for large importers, who are more likely to spend millions of dollars in purchasing every year and need to import hundreds or thousands of different types of products.

If you are just a small or medium-sized importer with a budget of tens of thousands of dollars in purchases per year, the suppliers on fairs may not accept your order, or they may arrange an unprofessional sourcing agent for you.

The End

Do you have any other questions about China Sourcing ? . If you want to find a China sourcing agent, you can CONTACT US, we are the leading China sourcing agency.

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