After several painful lessons of trying to “buy direct”, are you planning to hire a sourcing company for your business? If that is the case, then you are making a good choice. But, are you going to hire one just because you have heard how they can benefit you? You might end up selecting a wrong agency which cannot stand up to your expectations. However, there is always a way to determine what is right for you. So, here are a few things you should consider whilst you compare different sourcing companies.
1). Knowledge:
A sourcing company needs to be acknowledged about every product they deal with. It will not be able to perform the tasks without proper knowledge. It is especially difficult for a sourcing company to move ahead with their work when their supposed specialization is technical items, such as mechanical or electrical products.
Take this for an instance; your business is in LED lighting, so they must know the parameter and specification of the products. Also, the sourcing company needs to be familiar with the production of the goods – how they are produced, what is the process, and which materials or components affect the quality. If they know this, they will be able to arrange a quality control audit and find out the potential issues regarding quality before the delivery.
2). Experience:
One of the biggest factors that make the best sourcing agency is experience. Having experience means that they know what they are doing and also how to do it. If they lack experience in the field of sourcing and export, they will have no clue where to get the appropriate suppliers and how to analyze the quality of products. You do not want them to learn things from scratch whilst dealing with you. If they make mistakes, you will be at a loss. Another problem you will face with inexperienced sourcing companies is that they do not really know how suppliers should be dealt with.
3). Background:
Perform a background check of the agency you want to hire. You can check their Facebook and LinkedIn profiles to see how long they have been in business. It will also give you information regarding the firm when they were founded, what kind of services they offer, their goals, and the number of employees they have, etc. You will understand their capability, and how well they can utilize the resources.
If the sourcing companies you are considering have enough experience in the field of import/export or other relevant fields, they will be partnered with suppliers and vendors. So, these sourcing firms will be able to connect you to several reliable suppliers for your entire business, lessening the level of your direct involvement and providing you with time to focus on your primary business.
4). Location:
This element can have a straightaway effect on whether an agency can conduct efficient work or not because the suppliers are scattered in various areas, and it will be tough if the sourcing agents are far away from them. For example, the industrial conglomeration in China is primarily in the coastal cities, mainly in provinces like Fujian, Zhejiang, and Guangdong. So, if your aim is to source from that country and the sourcing agency is located somewhere in a different province, visiting the suppliers for routine tasks will be really difficult for the sourcing company. Expenses in terms of accommodation and transportation are pretty high.
Hence, look for a firm in the industrial sectors so that they have easy access to the suppliers and can visit at least 2 to 3 of them in a day. If the sourcing company is situated in the right place, it will be much quicker and efficient for them to handle everyday work like industry audit, pre-production inspection, quality check, shipment loading check, etc.
5). Focus Market:
Prior to choosing a sourcing agency to help you with your imports, enquire about which markets they consider and where their customers are from. As various countries have their own cultures, standards, requirements and regulations, it is important for them to know all of these factors for efficient and effective work.
Different markets provide different qualities for specific products. If you are looking for high-quality items from the Middle East or India, but your sourcing agents are from Europe or the USA, they are not the right match for your business. The best sourcing method is to look for a sourcing company dealing in that particular market. This will ensure that you are getting maximum value for what you pay.
