What Is a Sourcing Agent and How to Choose a Sourcing Agent?

In today’s world, sourcing agents/companies are becoming increasingly vital in the management of global supply chains. However, many small firms are still unsure about sourcing agents, particularly because they are being misled by confusing and outdated information available online.        

This post goes through everything you need to know about using product sources to cope with the Chinese manufacturing process. We will also discuss how to search for a reliable Chinese sourcing agent.



What Is a Sourcing Agent?


Source: Freepik

A sourcing agent’s job, in the conventional sense, is to find suppliers for his customer. Indeed, sourcing agencies may help with things like finding the correct supplier, negotiating a good price, monitoring manufacturing, quality control, product compliance and testing, shipping and logistics, and so on.

There is no requirement that sourcing agents/companies deliver a complete range of services. The scope of work is determined by the agreement/consensus obtained by both parties. An individual sourcing agent, who may be recruited as a full-time agent for you, is one type of sourcing agent. This type of sourcing agency generally employs only one or two employees and works out of a tiny office or from home. 

Some of them may have worked for a trading firm or a sourcing firm for numerous years. 

Sourcing agents may help you find high-quality manufacturers in their own country. They are familiar with the local customs and can communicate in their native tongue. They collaborate closely with the manufacturer, touring plants, and do on-site testing. They eliminate the requirement for you to choose a manufacturer and lessen the risk of importing low-quality goods.



What Does a Sourcing Agent Do?


Source: Freepik

A sourcing agent, also known as a sourcing agency, is a person or corporation that locates the goods you wish to sell in the nation of your choice. 

As a result, it is their primary responsibility to find suitable suppliers who can match your needs.

A sourcing agent aids a firm in discovering low-cost sources for items and supplies, allowing the organization to save money on manufacturing. Sourcing agents may work for a single company or manage a firm that caters to a number of them. 

Sourcing agents have relationships with local businesses and know where to obtain diverse goods. They can negotiate with a potential supplier and perhaps work out discounts and other terms that the firm would not be able to negotiate on its own. 

This can save the organization money while also providing the supplier with a long-term and profitable contract, so both parties have an incentive to cooperate with a sourcing agency.

Below are the three main tasks that a sourcing agent does:


1. Briefings

A sourcing agent may assist you in creating a proper briefing, which you can subsequently offer to your preferred supplier. This is especially vital if there is a language barrier because correct information is crucial.

Furthermore, the agent is well-versed in what should be included in the briefing, namely, everything the supplier needs to know about your goods.


2. Negotiations

Negotiation services are also available from some sourcing firms.

They are aware of the suppliers’ “pain threshold” in terms of price. This means they may get the best deal while retaining high quality. A typical error made by Amazon sellers is haggling until the supplier “breaks,” which means they will try to decrease costs by lowering the material or production quality – sometimes without informing you. The product sourcing agent has the benefit of speaking the language well and being familiar with the culture.

As a result, discussions are more effective and efficient.


3. Certificate Verification

It’s usually a good idea to ask to examine your manufacturer’s official certifications and licenses. In recent years, a growing number of factories have come under fire for terrible working conditions, poor product quality, or fraud. Your sourcing agent can help you in this.



Why Do You Need a Sourcing Company?

Product sourcing

Source: Freepik

Importing from other nations appears to be a challenging undertaking, especially if you are unfamiliar with the culture and language.

The language barrier is also a major concern. Although you can have the legal documents properly translated, it is highly expensive and you still have no way of knowing if the documents are genuine. Who’s to say the manufacturer didn’t just make up a false agency name to appear more official, or that the entire paperwork was faked?

This is where a sourcing agent might come in handy. He is well-versed in the standards that the manufacturer must follow, as well as the inspection organizations that are accountable and the format of the official certifications.

The most crucial and compelling advantage of employing a sourcing expert is that you will save a significant amount of time.

You won’t have to go through hundreds of pages of suspect suppliers on the Internet, nor will you have to spend time evaluating several factories or engaging in long, drawn-out debates over product requirements.

Your product sourcing company will take care of everything for you.



How to Choose a Reliable Sourcing Agent?


Source: Freepik


Step 1: Identify Your Requirements

The first step is to figure out what you need and what you want from your sourcing agency and provider. It’s beneficial to create a paper that explains what’s essential to you.


Step 2: Decide on a Budget

The second stage is to consider your financial situation.

How many units do you want to create, how much money do you have to spend on your items, and how much money do you have to pay your sourcing agent? It’s advisable not to create a budget that’s 100 percent fixed, but rather a range because unforeseen expenditures will always arise.


Step 3: Decide on the Sort of Sourcing Firm You Want to Work With

There are several sorts of sourcing firms. Each variety has its own set of benefits and drawbacks. Choose whether you want to engage with a single agent, a bigger sourcing firm, or a full-service sourcing and logistics firm.


Step 4: Do Some Research and Make Some Comparisons

You may begin your search now that you know what you need and what type of sourcing agency you want to engage with.

But don’t just use the first result that comes up on Google. Instead, use services like Sermondo, where you can see a variety of impartial evaluations from various merchants.

Then, based on the criteria you established in step 1, pre-select 3-4 sourcing agents.


Step 5: Request Several Offers and Business Permits

Now you may get proposals from the sourcing agents you’ve previously pre-selected. The price for each service you wish to utilize, the pricing structure, and how the price is derived should all be included in the offer.


Step 6: Work up a Payment Plan

After you’ve picked a sourcing agent, you’ll need to work out a payment plan with him. While bigger organizations often have a set price structure, you may frequently get a better deal with individual agents.

Also, find out if the cost of sourcing services will go down over time if you reorder.


Step 7: Make a List of Everything That Has Been Agreed Upon

You should write down everything that was agreed upon in the last phase.

After that, both sides, i.e. you and the sourcing firm, must agree. For example, in the event of poor manufacturing quality or late delivery, it must be obvious who is liable.

Both parties should also write down and confirm the method of payment and the amount. This way, you’ll have a document to fall back on if something goes wrong.




Now that you are aware of the sourcing agent concept, and the importance, as well as the things to consider while selecting the agent, the next step should be to get in touch with a few of the reliable sourcing agents.

You can contact MatchSourcing, as they are a reputed sourcing agency, dealing with discussing your issues, finding solutions, and selecting the best providers for you.



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