Updated on September 25, 2018
Explaining the Work of a Sourcing Agent
Searching for a recognized and reliable overseas factory to manufacture your products is a lot easier and more effective when using a good sourcing agent (as opposed to searching for yourself).
This allows you to get more proactive in marketing your products and opening up new retail outlets (considering you now have someone managing your back-end).
Sourcing agents can aid in locating factories that are a perfect match to your needs. They can also help to better identify which suppliers will be punctual, provide efficient service and are trustworthy.
From there, you can be given an outline of the prices and how best they can be negotiated, a break down to how orders are placed, payments are taken and suppliers paid.
Another important function of your sourcing agent is to do proper inspection of factories to check that they have high standards and conditions. It is also important that you inspect your goods before having them shipped so that they are in good condition BEFORE they are put on the ship.
Terms and conditions of international trade sometimes sounds like ‘crazy-talk’ so sourcing agents sift through the clutter and define the policies and agreement that will become effective once you establish a business relationship with the overseas manufacturer.
Payment terms, duties, and other pre-requisite will be vital in determining what is expected so having a sourcing agent handle these aspects is an asset to your business.
Sourcing Agent fees Fees are relatively flexible to the amount of goods and services being purchased over a particular time.
Sometimes a flat fee for sourcing and manufacturing setup is charged, or a percentage fee (or a combination of the two).
Duties of a sourcing agent are basically 4-fold:
1.To guarantee you a trustworthy supply partner
2.To outline the agreements with your best interest at heart
3.To make sure the ensuing manufacturing runs like clock-work
4.To make you, the small business owner more comfortable and confident in your supply line so you can focus your attention on building yoru businesss
Once you choose a sourcing agent it’s also key that you become acquainted with the fact that this doesn’t mean you will be free to stop learning about your niche and the manufacturing processes involved.
It’s to your advantage to have a deep understanding and knowledge of your industry, and also the country in which you will be doing your manufacturing.
Industry trade shows are an ideal asset that you can use to strengthen your industry knowledge, and also aid in your search for a suitable sourcing agent.
When it comes to working with an in-country sourcing agent (one in your own country) or a local sourcing agent in the country of manufacturing, working with a local sourcing agent has its advantages in that some countries have better manufacturing capability making it convenient to have one source of contact who provides access to component suppliers and manufacturers of all types and can easly rotate or re-setup your manufacturing if needed.
It’s also a good idea to make sure that your overseas manufacturing representative or sourcing agent can speak your language fluently so that nothing is lost in translation.
Getting multiple pricing comparisons is a useful service of a sourcing agent. A good sourcing consultant is able to maneuver and negotaie efficiently due to their knowledge of the local factories, the ability to combine orders of other clients, and their understanding of what