Why Use a China-Based Sourcing Agent Over Self-Sourcing?
When companies look to buy direct or develop new products overseas, they must decide between trying to find a manufacturer by themselves or using a sourcing agent to navigate much of the process for them.
At first glance, the thought of saving money by doing it yourself seems appealing, especially to entrepreneurs who are faced with new and challenging tasks daily. However, those that choose this path often find the process harder and more expensive than they anticipated.
Chinese factories are notorious for being hard to work with for Western businesses. The language gap creates miscommunications about products, intentions, and timelines, while the cultural differences can leave both sides feeling taken advantage of. Additionally, hidden costs and a lack of experience can mean that your landed products cost significantly more than you originally negotiated.
But China sourcing agents can also be a mixed bag, so it’s important to choose a reputable company with many years of experience.
11 Benefits of Using a China Sourcing Agency
1. Reduce the Financial Risks of Sourcing Overseas
Sourcing overseas by yourself comes with substantial risks. To meet the minimum quantity requirement of most Chinese factories, you’ll be investing thousands of dollars in products. If those products arrive damaged due to improper packaging or are a different level of quality than your sample, you’ll have little recourse to retrieve your money.
A sourcing agent can help you do much more due diligence so you feel confident about your products at every step of the way. If something does go wrong, they can be there in the country to help resolve it and fight for your interests.
2. More Time to Focus on Your Core Business
If you’ve ever been on Alibaba, you know just how long it can take to speak with one supplier. Talking with ten to twenty along with doing due diligence, negotiating, navigating logistics, troubleshooting issues, and more all on China time can take your focus away from doing what your business does best.
By using a sourcing agent, you’ll work with one person who will ask you for the information they need and find a product that meets your specifications and price range.
3. Sourcing Agencies can Bridge Cultural and Language Gaps
Chinese manufacturers often rely on inaccurate online translation tools to speak with you. This can create major problems, especially when a typo or a misspelling could completely change the result of an automatic translation. Additionally, Chinese business culture is about as different as you can get from standard western practices. It’s common for those unfamiliar with the differences to have a deal to fall through without having any idea what happened.
Sourcing companies are often made up of Chinese people who have experience with Western culture and language. In Sphere Resources’ case, our company was founded and is run by an Australian, in addition to our English speaking Chinese employees. Because of this, sourcing companies can speak to both sides in their native language and deal with them using cultural practices they feel most comfortable with.
4. Perform Sample Checks in China
Ordering samples from China can quickly add up. It’s not uncommon for a single sample to cost around $50-300. Additionally, it often takes weeks for them to arrive from China.
Sourcing agents can have samples shipped to their office to check the quality and relay pictures and videos to you. Anything that doesn’t match your quality requirements will be rejected and then you’ll be able to decide what samples you want to have shipped to you for further inspection.
5. Save Money on Hidden Fees and Shipping
One common issue inexperienced sourcers have run into is an invoice that looks very different than what was previously agreed on, especially for the final payment when you’re already paid half. The factory might claim that these charges are standard and without experience or being in the country, it will be hard to argue.
Sourcing agents can protect you from these kinds of shady dealings by signing a legally-binding Chinese contract with the factory when you originally agree to terms. Additionally, they will ensure that freight forwarders don’t overcharge you for shipping.
6. Negotiate Better Prices and Payment Terms
Along with saving you money on shipping and hidden fees, sourcing agents have years of experience negotiating with factories and can end up giving you a better price per item than if you had done it yourself. Additionally, they know how to negotiate in a way that saves face with the factory which is important to maintain a long-term relationship.
Payment terms are also a very important part of these negotiations which can allow you to hold onto more of your money until the production process is complete.
7. Perform Regular Quality Control Checks During Production
Sourcing companies based in China can also perform factory inspections before and after production. This allows them to ensure the factory is able to do what they are promising and won’t outsource it to an unknown 3rd party as has been known to happen on Alibaba.
Additionally, they can inspect products and packaging at different stages to ensure the quality is in line with the contract they agreed to, along with sending you pictures and videos of its progress. This can save you thousands of dollars and weeks of time from making a trip to China and hiring a translator.
8. Find Factories that Aren’t Listed Online
Most factories don’t have any kind of online presence. They rely on sourcing agents and their contacts for continued business. This means that using a sourcing agent opens you up to so many more suppliers than are listed on Alibaba making it more likely for you to find a supplier that will meet your price and quality requirements.
9. Expert Advice on Shipping, Warehousing, Quantities, and Timing
If you’re starting from scratch, every single part of the sourcing experience can be overwhelming. Often, articles don’t answer your exact question and finding experts willing to give you advice for free is impossible. While you won’t need to concern yourself with many of these tasks and questions when using a sourcing agent, there are still some major decisions you’ll need to make.
Your sourcing agent will be an asset to you as you consider what quantities to order, what method to use for shipping, whether to warehouse some products in China, and when to place your order.
10. Legal Standing Inside China
If things do go seriously awry, you won’t be out of luck if you’re using a sourcing agent. They rely on their reputation for continued business and will go to bat for you to make the supplier fulfill the terms of the contract. Because their company is registered in China, they are much more likely to succeed in Chinese courts than a non-Chinese company.
11. Benefit from Auxiliary Support Services
Lastly, most sourcing companies offer a variety of services to meet your company’s offshoring needs. This includes project support, China office representation, factory audits, and much more. Sphere Resources offers use of our design team and office space for ongoing projects free of charge among other things.
Sphere Resources Advantages
Sphere Resources has years of sourcing experience in a wide variety of industries. Headquareted in the heart of southern China manufacturing, our team is able to quickly deliver quotes based on your requirements and specifications. Additionally, our founder and director of sales, Sam Clay, is an Australian who has been living in China for over 15 years. This means your needs and expectations for quality products and service will be better understood and met by our team
Contact us to get started on a free quote.