It’s easy to find a factory online. So, if going factory direct is the best option, why are there still so many sourcing agents out there?
Most people seem to hold onto the common misconception that it’s always better to go factory direct. And sure, it’s great if you can find that perfect factory and you don’t need the benefits that a sourcing agent can offer. But in reality, you’ll find that most factories will have quality or communication issues, and the prices you can get if you buy through a sourcing agent are often lower. So, you may want to think about if you and the factory actually have the resources to work together. Here are three reasons why many importers continue to buy through a sourcing agent:
1. Supplier Verification and QC
Sourcing agents operate as the go-between for you and a factory. They work with a factory to manufacture your order, and in exchange, they earn a profit by charging you back a percentage of the order. A good agent will make sure all the products made in the factory are up to your standards, so they can continue to earn your business.
Many sourcing agents have a long-standing relationship with the factories, so they’re aware of the capabilities of each. Sourcing agents are able to reasonably ensure the quality of the finished products. They visit the factory to carry out product inspections and check up on an order. It can be very troublesome, and costly in the end, to leave this responsibility in the hands of the factory.
2. Favorable Pricing
Buyers often assume they’ll get a better price when dealing with factories directly, but that’s not always the case, particularly for smaller-time buyers. If a factory and an agent have been working together for a long time, they might be able to get you better prices and payment terms. Even if a sourcing agent is dealing with a new factory, they’ll likely be offered a lower price by buying many products in bulk and build a long-term relationship with factories.
3. Better Communication
Chinese education is getting better and better. Many factories currently have their own sales staff capable of communicating with overseas clients. But even with bilingual staff, there are still culture differences and communication gaps which sometimes can lead to disastrous results.
For example, when a Chinese sales rep talks to the factory manager, cultural norms dictate that the employee listen to the boss without questioning. Sourcing agent is technically the client of the factory. So, it’s often easier to have an agent communicate your product requirements and expectations to the boss instead of a sales rep.
You may have a very unique product that requires specifications to be frequently communicated with the factory, you can benefit from better communication if you buy through sourcing agents.