Importing Sourcing Goods From China Sourcing Service Procurement Agent
Many businesses are in need of a helping hand when importing from China. This is when the purchasing agent (or sourcing agent, procurement agent etc.) becomes relevant. He, she, or the company, that acts as a purchasing agent shall be your right hand and an incorruptible ally on the front line in China.
However, It’s not a protected professional title and anyone can call him or herself a purchasing agent. If you don’t make an informed decision when selecting a purchasing agent you might end up losing a lot more than the commission or service fee.
What is a purchasing agent and why do I need one?
A purchasing agent could be an individual, employed by a company or working as a freelancer,a professional company helping companies overseas to import from China. While a purchasing agent is not a requirement in order to import from China, a good agent can be an extremely valuable asset in your overall Product procurement strategy. Below I list a few examples of what a purchasing agent can help out with:
1.) Finding new products and suppliers.
2.) Audit existing suppliers.
3.) Manage negotiations and draft agreements.
4.) Perform factory inspections and quality control.
5.) Manage shipping and logistics.
Dealing with Chinese suppliers is very time consuming. Finding the right one even more so and requires a well laid out strategy that actively weeds out the bad suppliers (that’s about 80 – 90% of them) identifies those who are qualified to manufacture a certain product. Finding the right supplier also requires a certain amount of product knowledge, an asset not possessed by many inexperienced importers.
Whether or not you should choose to work with a purchasing agent is up to you. If you have previous experience and ”in house” expertise to manage the often risky and time consuming procedures, don’t hesitate save a few dollars and do it on your own. For everybody else I present the four most important factors when selecting a procurement and purchasing agent in China.
Organization and sourcing procedures
Finding suppliers is easy. Finding qualified suppliers requires an efficient and well executed sourcing strategy. A good procurement agent has a transparent and ”technical” approach to product sourcing that puts the clients product specifications and certification requirements in the first place – in front of any existing supplier relationships and related kickbacks (I’ll get back to the latter part in a few minutes).
While purchasing agents in China work in very different ways, I’d say that the standard procurement process should look something like this:
1.) Confirmation of product specifications and certification requirements
2.) Supplier sourcing
3.) Initial price research, sample order and selection of qualified suppliers
4.) Initial price negotiation
5.) Audit of qualified suppliers
6.) Final supplier selection
7.) Sales Agreement
8.) Production and Quality Control
9.) Shipping
Management
It’s true that sourcing companies with a Western management tend to charge higher service fees than Chinese managed enterprises. However, importing products from China is a risky enterprise and neglecting the quality standards set by western consumers can put you out of business. Neglect consumer safety standards and certification requirements and you might find yourself in court. Choose wisely.
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