Manufacturing industries and business houses are increasingly relying on global destinations aided by sourcing companies for factor resources. The involvement of these companies is significant considering the global nature of commerce nowadays.

1.Conducts an initial research

This is the first stage where you decide what your primary activities are, what are the needs of your clients and who your competitors are. These steps help you to determine your business goals and your position in the market. You and your sourcing partner need to design a business plan to determine the performance measurement system and primary work strategy.

2. Evaluate supplier and market

Your sourcing partner, which offers global sourcing service helps you to make a supplier selection benchmark. When you have the list of criteria, you can make further changes in the sourcing strategy and determine the final cost. Given the fact that you already have information regarding clients and prospective markets, you can identify the economic and operational benefits of the project and decide, if you at all want to source from a foreign base.

3. Select suppliers

You can create an request for inquiry (RFI) and send it to your selected suppliers. After you get back the filled up RFIs, you can make a final list of suppliers. You can then conduct a price negotiation depending on the final supplier list and determine how much you can save.

4. Implement decisions

In this stage, you have to create a performance analysis schedule. Your sourcing partner is going to be a part of the implementation team where you will have to decide resources, shared supply and logistical arrangements. You should keep an account of the performance of every supplier in case of more than one supplier.

5. Monitor supplier performance and take necessary measures.

You must make sure that you, along with the company offering global sourcing service carries out regular performance check and reports it. This will assist you in realizing whether the suppliers are sending products as per your requirements or not. You will also get to know if the suppliers are following your criteria of quality and safety or not.

Here are some benefits of using Sourcing Agents in China for your business:

i. A sourcing agent represents the buyer and not the supplier so that you will have a local representative for your business.

ii. Helps you in finding out trustworthy suppliers and factories with expertise in specific products.

iii. Buying agents help in finding out the products at affordable price and will save you from wasting money on hidden costs.

iv. They can easily communicate in the native language, thus making it easier for you delivered your message to the supplier and other local authorities.

v. Manage all the tasks of your company or business on your behalf. Sourcing agents perform the regular quality check.

vi. Most of the sourcing agents in China work on commission basis and will pay the suppliers on your behalf.

vii. Good buying agents take quotations and do the price negotiations on your behalf.

China Sourcing Agent

Elksourcing：What Can a Sourcing Agent Do for You?

Apr 11, 2021 Elksourcing, sourcing agent by 露露

It’s a good way to find a sourcing agent to help you for importing from China, especially when you are new to your importing business. What can a sourcing agent do for you? What is China sourcing agent fees? Below are some key aspects:

1. Services

Sourcing agents offer a catalog of services for you. Agents and traders charge you for just the facilitation of a manufacturer relationship. Sourcing agent fees is charged with a more holistic, service-based approach to your procurement.

2. Cost-Efficient

Sourcing agent fees is usually not a percentage based on unit quantity. Rather, sourcing agents usually cost a flat fee per product (not per unit). These flat fees help you better calculate your monthly costs for sourcing with little variation. This flat fee is also a lower-cost option overall, allowing you to maintain your margins and revenue.

3. Transparency

You have control over your own supply chain. You are the final decision-maker and you have visibility to every process, cost, and partner. This transparency helps maintain seller security and control.

Only through supply chain transparency can you ensure consistently streamlined operations towards

scalability. Procurement transparency is the best way to protect your business.

4. Resources

Sourcing agents spend day-in and day-out working on procurement. They have access to credible, quality suppliers and shipping partners. They know the industry regulations, and they have the skills for negotiation and contracting.

Firms also have more individuals at their disposal. This means you have a team of experienced

professionals in a variety of areas to give you advice and information. There’s no greater asset for your Amazon business than a crew of knowledgeable sourcing partners.

5. Time-Efficient

This sourcing agent team not only provides you with top-notch procurement partners, but it also frees up time for you to focus on marketing and selling. You can hire the firm to take care of sourcing from A to Z, and they have the resources to get the process done quickly and efficiently. You don’t have to learn the industry yourself or build your own networks and connections.

They can source and handle the back-end logistics swiftly and effectively, while you have more time to focus on growing the front-end of your business.

6. Product Consultation

One of the greatest services of a sourcing firm is product consultation. You don’t have to select a product all on your own and hope that the inventory you purchase will sell. Sourcing firms usually offer a catalog of potential products that are trending or high sell-through. This can be a great starting point if you don’t have customer data or product analysis.

7. Supplier Assessment

Agents can help you find suppliers, but those suppliers often pay them to get business. Agents get

commissions from the factory to bring them clients. Agents are, in a way, salespeople for the

manufacturer.

8. Disputes

This also means that agent is responsible to you for contract agreements, price negotiations, and claims disputes. A sourcing agent is on your side to create win-win-win solutions throughout the procurement process.

9. In-Person Inspection

Sourcing firms are often global, so they’ll have a team on the ground overseas. This helps build face-to-face relationships with suppliers to avoid scams and promote quality control processes. This allows for in-person inspections and ensures social compliance.

Plus, the greater your relationship with your manufacturer, the better your chance of reduced costs and speedy lead times. A sourcing agent is the simplest, strongest way to build these vital seller-supplier relationships across seas and borders.

China Sourcing Agent

Elksourcing：What Kind of China Sourcing Agent is Good for You?

Apr 11, 2021 Elksourcing, sourcing agent by 露露

The first issue you want to look at is the China sourcing agent’s location.

The closer the people who manage your project to you, the easier the communication will be. When both of you work in the same time zone it is easier to find a time during the day to speak and a face to face meetings are easier to arrange.

On the other hand, an agent that is close to you is far from the factories, and all the advantages I just spoke about become the disadvantages of the communication between the agent and the Chinese suppliers.

In addition, if the people that run the sourcing agency are close to you, but in terms of experience and culture background are far from the Chinese suppliers, then that together with the physical distance will create a communication barrier.

Some of the important advantages of a China-based agency management is that they have the ability to arrive at the location where your project is being processed fairly quickly and to communicate effectively with your Chinese suppliers in their own language and throughout their entire business day.

This means a lot for two reasons:

Can your agent communicate with your supplier?

Effective communication with your agent doesn’t mean much if you cannot take the results of that communication and put them into action.

Sometimes, executing decisions is a much more complicated task than making the decisions themselves.

That’s because you may need to communicate it to multiple people in the vendor’s organization, realign the supply chain, discuss with different departments how they are going to coordinate their actions so that the decision will be executed in the best way, and all these require a very high level of communication efficiency, and … time.

So, when the agent’s management has more time during the business day to talk to multiple people in your vendor’s organization and when they are able to arrive in the office of the vendor to have meetings with all the departments involved, that alone can save weeks in project processing time.

Can your agent execute your decisions?

Many times, the implementation of a decision depends a lot on the constraints and situation in the site.

And I don’t mean only the physical constraints. I am also talking about the people who work for your vendor and are processing your project. Understanding their personalities, their relationships and the inner politics inside the vendor’s organization can make a huge difference.

You cannot learn these by visiting your vendor 2 or 3 times a year for task focused meetings. These are things you learn only after you earned people’s trust.

An agent’s management that has the ability to learn these things can bring enormous value to its customers, because if you understand who are the “doers” and who really has the power to move things within your vendor’s organization, you will certainly do things differently and you will certainly get much better results.

So, if your project is such that your vendor’s involvement in processing your project is high, and most of the details of the project have been communicated to your agent already, then you are probably better off with a China-based agent.

China Sourcing Agent

Elksourcing：A Few Things to Notice for Sourcing in China

Apr 10, 2021 Elksourcing, sourcing in China by 露露

It has been over 15 years since millions of companies around the world have taken the opportunities of sourcing in China and outsourcing partial of their production to China.

In theory, the profits expected are huge but on the ground, it is not as easy. Many companies will have difficulties in dealing with Chinese suppliers.

Sourcing is an English term that refers to practices aimed at finding, evaluating and contracting with suppliers of goods and services.

The main tasks are:

A. To increase competition in the panel of existing suppliers for lower prices.

B. To identify new suppliers in the international market.

C. To discover innovation offered by new suppliers.

Here are a few things to notice for sourcing in China:

1. Use a local representative

Quality control will be a key factor of success for your sourcing activities in China. Then having a local person who anticipates problems in China is crucial. Import export in China is not an easy task!

Chinese have a different view toward quality. A product with a defect may be acceptable to your supplier, so you need a quality controller to protect your interest. Or as you may know it is always rather difficult to solve problems when you are far away.

Many companies think they can deal with Chinese factories by e-mails only. They will soon realize it is far from being obvious.

The main difficulties are: cultural differences, linguistic misunderstanding and different time zones.

Then a local representation will help you for several things such as traveling in China or negotiating prices.

2. Using a sourcing company

This is convenient and easy as they take care of everything. You can find a lot of sourcing companies in China, but few are serious.

Often that is the problem you expect least that will cause you the biggest damages and require time and effort.

Do not ever underestimate the power of networks and relationships in China, a local agent will be required to develop them.

You will have to pay attention to the dark side of Chinese suppliers. A common mistake is to believe that when you did find the right supplier the job is more or less done. This may be okay for a while but the supplier will not hesitate to do more if you engage a true relation with him. A supplier who has not seen his client for a while will soon not fully satisfy its customer orders in terms of quality or timing.

3. Supply chain management

Nowadays, the Internet makes it easier to find a supplier. Alibaba, Made in China or other websites can help you for that task.

Sourcing in China is to identify not only one supplier but many of them. In China, it is always important to have different sources of supply if you want to avoid the risk of seeing your supplier flying away or if you want to stop your relation.

In addition, you will have to visit the supply chain manager. If a supply chain manager feels your presence he will do better job.

4. The issue of management in China

Do not underestimate the time needed to deal with problems in China.

In all stages of the production we encounter problems, especially in the beginning.

An expert in sourcing will know what kind of glitches can quickly become huge problems if a quick and efficient decision is not made.

It is important to always have a look on your production.

In Europe, if no news means good news, but in China it means very big problems are occurring.

You may have to harass your partner and ask for a schedule if you want to follow the state of your production. In Chinese factories, the priority is often given to the largest customer, to new clients or to friends. If it is not your current situation you better ask and check everything to reach your goals that is to say a good produce timing with an acceptable quality.

5. Incidentals

In China, it is important to ask in advance who will pay for unpredicted costs.

Often, they will ask you to pay for shipments, samples, fumigation fees, brokerage and the list goes on and on.

Some of these fees are mandatory but often they are just trying to cheat you.

If your Chinese supplier knows that you do not have any representative in China, he will usually try to make you spend more money for over costs.

You also have the myth of the red envelope for customs in China … Sometimes that may be true, but many times some use this trick to get the envelope for themselves.

This may sound shocking but for many Chinese western people are likely to be seen as pigeons. Then you will have to show that you know your business and that are not going to accept to be cheated.

China Sourcing Agent

Elksourcing：6 Tips for Beginners about Sourcing from China

Apr 10, 2021 Elksourcing, Sourcing from China by 露露

Sourcing From China is not a new thing, but in this post, we want to focus on providing China sourcing beginners some valuable tips on what is a very challenging but often very rewarding journey.

So, by definition a source is “a place, person, or thing from which something comes or can be obtained”. It makes sense to start there. Spending time and energy on getting the best sources is a worthwhile venture. In relation to having products manufactured and importing them from China it’s an incredibly important part. A good beginning really is half the work where choosing wisely is very important in lowering your risk.

1. Finding supplier

Start by signing up as a free member to alibaba.com, globalsources.com and made in china. Familiarize yourself with these platforms which are user friendly but do contain a few more bells and whistles than before. The number 1 important thing to learn about sourcing online is gaining a 6th sense for genuine good companies. The more information you review the more you will get this. For example, the more company profiles you read, the more websites you visit, the more images you review, the clearer the picture you get. Focus on what you can see that’s real. Don’t assume because a company has 500 pictures of products there that they must be great at making that product. There is much more to finding suppliers than that – focus on what you can see that’s real evidence.

2. Getting the Information you need.

When you master finding legitimate suppliers then you need to worry about getting the information you need. Don’t over focus on prices unless you have a very detailed specification for a supplier to quote from. When requesting information, make numbered lists and only ask for 1 thing per line. Do not write request for information as long winded unpunctuated stories. It genuinely comes across un-professional and you will be put to the bottom of the pile. Utilize the phone (by that I mean Skype or another such technology) to give the supplier a call and get a sales contact. A quick polite professional call where you can agree to email details you would like quoted on is a great way to start. I recommend you do that before you start swapping emails with anyone.

3. Weighing up the information.

After gathering a lot of details from ideally 3~5 solid supply options you’ll need to start weighing up the information. Here takes time to compare everything received, be organized and file the information separately. It is pretty easy to start getting confused between Chinese company names and contacts if you haven’t much experience with them. What’s important to you? Company size, how long they are established, are they servicing markets with comparable quality, are they within reasonable distance of a major port, do they communicate clearly or are there some questions that are just still unclear? Ask yourself plenty of questions. For most products, you will be able to request a sample (assuming non-customized) and that will be either free or with a small charge. To save time do this as soon as you shortlist the company. Armed with lots of information and product samples you will be well placed to rank your suppliers.

4. Visiting Factories.

You won’t always want or need to make the journey to China but sometimes you should. Having ranked your suppliers if you want to place an order first you should get a 3rd party foreign sourcing company in China to make factory visits in China. This is a very popular way for remote buyers to make final decisions on which supplier to begin with. By engaging experienced and specialized companies you will learn more. Costs for this are comparatively reasonable. If you are making the leap yourself then there is plenty you can do to be prepared. Be thorough and go through and bring copies of quotes, specs. Or any important points discussed and confirmed. Get the map out to understand exactly where you are going…not just I’m going to Shanghai and then a 2-hour train from there.

5. Sourcing at Exhibitions.

In the early stages of sourcing if you are more of a get up and go type you might be intrigued by the proposition of sourcing at exhibitions in China. If you are in an idea generation phase then this can be a lot more beneficial than trawling the B2B sites. There are 2,500 tradeshows currently held annually in China, make sure to learn the specific one in your industry or matching your needs.

6. Making & Keeping Business Relationships.

If you have been through half of what’s outlined above then you will be well away on your China business venture. This means you need to know how to make business relationships in China and keep them. It is a subtle skill to attain but if you master it will always serve you well. Business relationships in China work differently than in Western business. In China, you need to accept each other on a personal level and to consider the other party as a friend. That all seems outlandish, right? Well, it is until you experience it and it does require you to use your powers of judgement. This is also true for your Chinese counterpart.

China Sourcing Agent

Elksourcing：Purchase by Yourself or Use a Sourcing Agent?

Apr 10, 2021 Elksourcing, sourcing agent by 露露

If you are starting to buy from China, your first decision will be: should I manage this by myself?

If your team can’t dedicate 1-3 hours a day (per supplier) to follow what happens in China, you might need help from a sourcing company that can handle these tasks:

Identifying new suppliers that can make your products at the right price and quality levels;

Helping develop new products/styles with these suppliers;

On-going management of the supplier relationships (communication, quality control, shipments follow-up, quality problems, and so on).

You may have 3 options:

1. Purchase direct

This is what 80% of importers try to do. They want to control the whole process, and avoid paying commissions to any middleman or agent.

If you are organized enough to manage suppliers, and if you can satisfy the minimum order quantities (MOQs) of suppliers, this is probably the best option for you.

2. Purchase from a trading company

This is a good option if you cannot satisfy the MOQs. A trading company can place production in a smaller workshop that accepts small orders. Aside from this particular situation, I don’t advise to work with a middleman.

3. Use a sourcing agent

This is the best option if you just start to source from China, and you forecast large orders down the road. Some agents provide a service and charge a fee. Everything is transparent (supplier names, process followed…).

Such agents used to be very rare but I am sure it will become more and more common. The best ones tend to work like a procurement office and to be well organized.

Qualifying an agent

Here are a few questions to ask sourcing agents before you engage one:

1). How will they get paid, and by whom?

2). Will you be able to visit the factories before/during production?

3). Can they provide referrals or testimonials from satisfied customers who are using his services?

4). Who buy the same type of product as you? Make sure to contact two of them and get confirmations.

5). Do they do quality inspections by themselves? Or do they resort to a specialized third-party? Will you get a report every time?

6). Will you get an update every week on the production status?

7). Can they share their management system with you? You need to make sure they have processes in place. The vast majority of agents don’t follow any established procedures.

8). What guarantee do they offer in case supplier scams you? If shipments are behind schedule? And if you receive junk products in your warehouse?

9). Are they located in the area where your products will be sourced?

10). If you keep re-ordering the same products from the same sources, will you pay less after the first order?

China Sourcing Agent

Elksourcing：What Can a Sourcing Specialist Contribute?

Apr 10, 2021 Elksourcing, Sourcing Specialist by 露露

Why do many importers use sourcing specialists for their international procurement? Because they want to reduce costs, ensure quality, shorten sourcing lead time and mitigate risks. Most importers don’t have the in-house resources or skills to implement all these by themselves.

Good sourcing specialists can achieve a 20% or more reduction in overall cost. The sourcing specialist can also negotiate on your behalf, manage quality and ensure on-time delivery. So, what do a sourcing specialist do?

1. Choosing right place for your sourcing needs

Sourcing specialists can pre-qualify suppliers, develop the relationship for you and ensure that the products you require are provided in the right place at the right time for the right price. Some specialists have expertise in supplier chain management across borders.

2. Price negotiations

Negotiation on product price, packaging and transportation cost is one of the key roles of sourcing specialists. They provide clients with the lowest possible price based on long term relationships and volume buying power.

Souring specialist can utilize their experience to source directly from manufacturers in right areas, as local language speakers, they can handle negotiations better on behalf of buyers.

3. Sourcing suitable manufacturers

Selecting the most suitable manufacturer for your new product is not easy, you can use the sourcing specialists with a track record in locating and identifying reliable, transparent and capable factories in the best territories. You can focus yourself to marketing for the new products, and make more money at end.

4. Quality control

Good sourcing specialists monitor and ensure that all the factories that they work with meet all government regulations and your product requirements. They can visit factories frequently on behalf of buyers, to monitor incoming materials, semi-finished parts, finished products, and packaging, also witness container loading, to make sure you receive good quality products.

5. Value added services

Good sourcing specialists should be able to provide A to Z full service, including coordination of logistics and shipping, engineering improvements, new product development, and so on.

Conclusion

Regular communication between you, the client, and the sourcing specialists are crucial, try to find the one who have good English capability in both written and spoken, and who are fully aware of culture barriers. Besides of emails, you can do regular video conferences to discuss things thoroughly and make sure you are always on the same page.

China Sourcing Agent

Elksourcing：How to Choose Product Sourcing Companies?

Apr 10, 2021 Elksourcing, sourcing company by 露露

Product sourcing companies are agents who facilitate relationships with suppliers. They specialize in importing goods from various regions of the world on your behalf. They locate the best sources at the most competitive prices to save your cost, at meantime, they contribute in quality control and communications.

1. How do product sourcing companies actually work?

Product sourcing companies source goods and, usually, store them in their warehouses to provide you with a responsive, reliable and a readily available service. They work with multiple wholesale suppliers and manufacturers aggregating purchasers’ needs into one service. Many products are sourced from low-cost countries in Asia, mostly China.

2. Who are the product sourcing companies?

They may be called trading companies, third party sourcing, importers, brokers or drop shippers and they only represent the purchaser, not the supplier. Services may include sourcing specified products at the best price to managing the whole import process and all possible services in between.

They make their profit through leveraging group spend, buying in bulk and selling for profit.

3. The advantages of using sourcing companies

Using product sourcing companies has the potential to save you costs and management time, and time is money. They can source your products where they get the best price and pass the cost savings, up to 50% directly to you. Some companies will also do new product research for you and deliver you samples for approval and competitive pricing.

Also, sourcing companies have QC inspectors who can visit factory frequently to inspect the products, monitor the production lead time, and feedback the first-hand status report to buyers.

4. Selecting the right product sourcing company

Many business owners don’t even know where to begin because it is complicated and time consuming to find a reputable sourcing company. There are many unreliable and fly-by-night operators in this sector, so, it’s important to only choose the verified sourcing companies.

You may visit business forums (such as UK Business Forums) to ask for other people’s recommendations, or do Google search. Remember to do due diligence and ask for references from the candidates you have found.

5. Reputation is the key

A company’s track record is a good indicator of the service you can expect. If they have been in business for more than 5 years and can provide references from satisfied customers, you can be reasonably confident that they are able to perform the services you need. Talk to the references by yourself so you will learn full details.

Category: China Sourcing Agent