China is regarded as the factory of the world because most companies choose Chinese producers to create their goods because of reduced cost due to the nation’s sizable labour population.
Even a lot of small companies import their goods from China and sell them on different e-commerce platforms. Typically, they use a specific sourcing agent to look for suppliers on their behalf.
Finding a sourcing agent in China, meanwhile, can be somewhat difficult, especially at first. Before making a decision, you should take into account a variety of aspects, including the agent’s experience, the field of specialisation, language skills, services, and others.
To prevent issues in the future, the process of hiring any online sourcing companies or agents should not be hurried.
An internet search sitting from your office abroad to find Chinese suppliers on Alibaba or Global Sources is not good enough to find your prospective Chinese supplier.
You need to commit at least 1 to 3 hours every day to your supplier sourcing and management, and the same exercise is needed for each supplier.
Your time will be mostly spending on:
- Identifying new suppliers who is able to produce your products at the desired price and quality levels
- Helping develop certain new products/styles with the help of these suppliers
- On-going management to maintain a relationship with your supplier through regular communication, regarding follow-up, quality control, shipments, and crises if any.
If all these activities cannot be done by you or your team then you must consider hiring a certain third-party sourcing agent so that he can help you in China.
How to choose a sourcing company in China?
It can happen with any kind of service, there can be a few reliable ones and then other service providers are a little less reliable.
1. Ask for referrals or testimonials
Can he offer references or reviews from pleased clients that use his services and purchase the same kind of goods as you? Ensure you get in touch with two of them and request confirmation.
2. Has he got product knowledge that you are interested
Always prefer to choose a sourcing agent who has got full knowledge about the product that you are interested in. if the person has already worked in such companies manufacturing the same product that you are looking for, then it is a plus point.
You can also ask whether he can manage the quality inspection before and during the production.
Also, whether he will be able to organise any third-party inspection of your product before the shipment.
3. Communication skills
Check his knowledge of speaking and writing in English. Also, ensure that all his staffs are also proficient in speaking English.
4. A good sourcing company must be located in the country from where you plan to buy
Having a sourcing firm in China gives you access to a sizable database of well-chosen factories and makes it simple for you to audit them.
You must be careful when selecting your sourcing company. Verify their registration and legal rights to operate in China. Never be afraid to request official papers.
Working with a service provider with more than six years of experience is recommended. A competent sourcing firm is one that is familiar with Chinese business practises, their weaknesses, and the opportunities that China presents. Everything is learned via experience nothing is natural.
If the agent is not from China and a person from your area, don’t be afraid to ask about the complete profile of your partners. Have they been in China for ten years, or are they recent immigrants?
5. Start small with a new supplier
Don’t send a sizable payment to an unproven supplier that your sourcing agent has recommended, and don’t count on their goods to arrive on schedule. It is a good idea to open a letter of credit for the initial order and extend the anticipated timeline by three extra weeks.
If an order is not handled properly, switch suppliers right away. If you are happy, gradually and frequently increase the order size. With this tiny test order, you may assess your sourcing agent’s capabilities.
6. A reputed sourcing company provides alternative suppliers
Any sourcing firm that is skilled at identifying specific vendors can always fulfil your needs. If you already have a few suppliers, ask them to show you some fascinating factories that only they can find because of their knowledge and connections.
7. Management of Chinese suppliers and compliance with quality standards
A good sourcing firm skilfully blends local and foreign workers. Foreigners are familiar with foreign quality standards, which make it possible to bargain and maintain excellent relations with Chinese suppliers.
Local always refers to local. For example, a supplier in Canton needs Cantonese workers who speak Cantonese, however, in Shanghai, a Shanghainese person would be better suited for this task.
8. A leading sourcing agency negotiates for you
Don’t pay the entire order price before production begins; a sourcing business will negotiate the best payment terms on your behalf. Typically, it is between 30 and 50 percent at the time of the order and between 50 and 70 percent just before the container is loaded.
There is typically a problem if the business demands full payment before manufacturing.
9. Compliance with production procedures
Before beginning manufacturing, always request samples to be sure the product will satisfy your standards for quality. A reputable sourcing firm will request your consent. Each quality report must also include images and paperwork attesting to all the quality controls.
10. Negotiate the price
When you have made your decision, you should try haggling over the cost. Find out whether they give discounts or if their prices decrease with each subsequent order.
After the agent has provided their terms, consider all the information before making a choice.
11. Document all information you agreed upon
Always keep a record of the details that you and the sourcing agency agree upon. This will be your go-to resource for future difficulties like production hiccups or shipments that are delayed.
In the event that things go wrong down the road, the agreement will also safeguard you against fraud.
We hope you have got plenty of food for your thought and obtained useful information from this piece of writing so that you can find your prospective sourcing agent in China easily.