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Is A China Sourcing Agent Worth The Money?

Are you looking to make private label products available online? Are you having difficulties finding reliable suppliers to China? You can save both time and money by using a China sourcing agency.
A sourcing specialist is someone who helps you connect with factories in China so that your products can be produced. They can also help with…

Packing your products
Shipping your products
Quality Control
Price negotiation

Good sourcing agents usually live in China and serve as trusted advisors on the ground. They can help locate manufacturers you don’t find on directories such Global Sources or Alibaba.

For your reference, they also have strong relationships with trusted factories, freight forwarders and inspection firms. This post will examine the pros and disadvantages of using a China wholesale sourcing agent, as well as whether they are worthwhile.

How to Source from China

You must follow 6 steps when you want to import products from China.

You should know what product you are selling.
Find a Chinese supplier to manufacture your products.
It is important to collaborate with your supplier in order to create a great sample.
Negotiate with your supplier regarding the cost of your first bulk purchase.
To ensure quality control, an inspector must be hired.
You must coordinate the shipping logistics to your warehouse.

Once you find a trustworthy supplier, everything else is fairly easy. When you first start out in China, it can be overwhelming to source your product.
What are your options for sourcing from China?

There are 4 main ways you can source private label products in China. These are the options.
Option 1: Search for your suppliers using directories and tradeshows

Source products from China at the lowest cost by finding wholesale suppliers.

You can easily locate factories in your area by looking through directories like Global Sources and Alibaba.

You can also use Jungle Scout’s supplier database to determine which factories your rivals are using.

Here’s how the system works. Every shipment that arrives in the US by sea has its details recorded.

To search for suppliers for any brand, you can use the Jungle Scout supplier list.

The Canton Fair, which is open to all, allows you to meet thousands in one place.

It is simple and economical to source your suppliers from the internet, but it is essential that you understand what you are doing.

It is important to learn how you can approach suppliers and negotiate the lowest prices. You will need to be able to manage quality and import products directly from China.

You need to be able to manage your own supply chains.
Option #2: Hire A Sourcing Agent

A sourcing representative is someone who helps you find reliable manufacturers. They pre-screen suppliers and help find the best factory that suits your needs.

The sourcing agent will work with you to negotiate and be a liaison with your supplier. To manage your supply chain, many sourcing agents maintain a reliable network of freight forwarders or customs agents.

While sourcing agents will save you time, they can also be costly.

China sourcing agent are usually paid a flat-rate or a percentage commission on your order.
Option #3: Purchase from a Trading Company

A trading firm is a middleman working with many factories throughout the supply chain in order to provide products for you to sell.

However, your customization options are limited and you must only sell what’s in their catalog.

If you don’t have the budget to purchase from a factory in China, buying through a trading firm is an option.
Option #4: Use A Service Company

A service firm is a company that helps customers find reliable suppliers and negotiate for the best prices. They also manage freight forwarding, quality control, and other tasks.

The process of working with a service firm is the same as hiring an individual sourcing representative, but service companies don’t usually give you the contact information for your factory.

Because their network is the key value add, service providers tend to keep their supplier contacts under wraps.

A service company receives a commission that is a percentage from the order total, much like a sourcing representative.

You will need to pay a China agent a commission on the cost of your inventory. But they can save you money and time.

It’s not easy to establish trust and contact a Chinese factory because the majority of larger manufacturers won’t work with random buyers. You need to build a relationship before you can do anything!

A good sourcing agent will already have close relationships with many factories. They can also help you locate manufacturers who are unlikely to give you their time.

Many top-tier suppliers cannot be found on Alibaba. In certain cases, you will only find the top-tier suppliers online through a Chinese sourcing agent with established ties.

Here are the main advantages of using a China supplier agent. They can help…

For your products to be produced in pre-screening factories
Negotiate on your behalf prices
Communicate with Chinese factories even if you don’t speak Chinese
Quality control and inspections
You can find low cost freight forwarders that will ship your goods

Even if there are reliable suppliers already, you should continue to reach out to factories to ensure the best price.

It is also beneficial to have backup suppliers available in case of production issues or product shortages.

What Does A China Sourcing agent Cost?

China sourcing agents will charge you a commission based upon the order cost. The percentage charged typically decreases with an increase in order size.

Here are some examples of fees that sourcing companies might charge.

Below $1000-100
$1 – $2k – 10%
$2 – $3k – 9%
$3 – $5k – 8.5%
$5 – $7k – 8%
$7 – $10k – 7.5%
$10 – $15k – 7%
$15 – $20k – 6.5%
$20 – $25k – 6%
$25 – $30k – 5.5%
Above $30k – up to 5%

Your sourcing agent must place all future orders after your first order has been placed. Unless special terms have been negotiated, it is discouraged to work directly with the factory.

Most factories won’t do any business with you unless you have an agent. Some China sourcing agents may conceal your factory information.

Most service companies won’t reveal your factory’s name.

At first glance, sourcing fees of 5-10% might seem expensive. It is well worth the effort and time saved by a sourcing agency.