Many businesses in the United States and Europe today source their products from China. These businesses include wholesalers, retailers, online sellers, one-dollar/euro stores, department stores, and supermarket chain stores. The direct savings in production costs is the primary benefit for these businesses to source products from low-cost regions such as China.
Many businesses have long contemplated this option but are yet to make the shift. They hesitate due to perceived risks. For these businesses, China is unknown territory, and thus, there are a lot of risks attached to sourcing products from there directly.
The good news is that it is no longer mandatory for businesses to source products from China on their own. Instead, they can entrust a China sourcing agent with this responsibility. However, it is important to keep in mind that not all China sourcing agents are equally efficient, experienced, and/or well-connected in the Chinese market.
Therefore, you must perform proper due diligence to find the right sourcing agent to source products from China for your business. This guide aims to explain this process in detail. However, before we get to that, it is important to know why businesses should source from China in the first place.
1. The Top 3 Reasons to Source Products from China
For almost two decades now, China has been the world’s manufacturing hub. While outsourcing their production to China makes financial sense for large enterprises, it may not be a feasible option for smaller businesses and many mid-sized companies.
For these businesses, the best option may well be sourcing finished products from China instead of outsourcing their entire manufacturing function to the country. Following are the top 3 reasons for these businesses to source products from China:
1.1 Cost Savings
If you’re looking to source products from China, then you’re most likely doing it for cost savings. With these cost savings, you can set a lower price for your products without having to lower your profit margin. If you play your cards right, you have a chance to increase your profit margin and generate greater profits for your business.
Moreover, the additional profits you earn as a result of the cost savings can be reinvested to help your business grow. The reason prices of products in China are much lower than in the US and Europe is that China is a competitive market. This increased competition in China is due to the low cost of manufacturing there.
The cost of manufacturing is low in China because the country has factories with production capabilities to manufacture products in bulk or large quantities. The production facilities in China allow manufacturing companies to give large orders that decrease their cost per unit. Ultimately, this allows your China sourcing agent to source the desired products for your business on the cheap.
Contrary to popular belief, you can find products in China that meet your quality standards. The popular perception that goods manufactured in China are of poor quality is not at all true. Many production facilities in China manufacture goods according to American or European standards. The best part is that you can get products that meet these standards at a fraction of the cost you would have paid for the same in a Western country.
No matter what type of product you are looking for, you will find it in China — artificial flowers, handbags, toys, kitchenware, sports equipment, office supplies, and more. Therefore, you can be confident of finding the product you want at a low cost when sourcing from China.
This list is not exhaustive, and there are many other advantages of sourcing products from China.
2. How to Find a Top-Rated Sourcing Agent to Source from China
If you decided to use a sourcing agent to source products for your business from China, then you should be congratulated for making the right decision. It’s now time to get down to business. You need to start searching for a top-rated sourcing agent to source from China. But how do you do that?
Sure, you can turn to your all-weather friend Google for this purpose. But a simple search for ‘China sourcing agent’ will return hundreds of results and throw up an equal number of sourcing agents, with each one claiming to be the best. This can make it tough for you to find the right sourcing agent for your business. However, you can make the task easier for yourself by shortlisting the agents based on certain key qualities or factors that make a top-rated China sourcing agent. These key qualities or factors of a top-rated China sourcing agent are detailed below:
2.1 The Ability to Search for Suppliers with the Best Price and Offerings
The primary reason for any business to source from China is to lower their product-related costs. Therefore, it is essential for any business that wants to source products from China to have a sourcing agent that can search for and find suppliers with the best price and offerings.
In today’s increasingly connected and digitized world, virtually anyone can look for suppliers online. For example, anyone can head over to Alibaba or the 1688.com website and start searching for Chinese suppliers of the goods they want. However, only people with expertise and experience in the Chinese market can identify the suppliers with the best price and quality on these sites.
For instance, a 1688.com Buying Agent will make searching for wholesale products online and separating quality suppliers from the rest breeze for you. Not only can a good sourcing agent make the search for quality supplies on sites such as Alibaba and 1688.com easier for you, but they can also help you to find quality suppliers that are not listed on these popular online marketplaces.
2.2 A Local Presence in China
At the minimum, your sourcing agent should have some presence in China with an office and a dedicated staff there. Ideally, your sourcing agent would be based in China. It would be unrealistic for you to expect a sourcing agent that is based outside of China to fly to the country every time you need something or have issues with the quality of any products you’ve sourced from China via the agent.
A sourcing agent with an office and a dedicated team in China eliminates the need for this, saving you and your agent both time and money. Not only can a sourcing agent based in China quickly deal with any product quality issues, but they also help you to quickly find a reliable supplier and negotiate the best prices with them.
In addition to the above, Chinese-based sourcing agents are well aware of the fraudulent suppliers in the country and as such, will keep you away from these scammers. Once a supplier has been selected, and prices are negotiated, the market agent based in China will take care of the follow-up tasks such as packaging, quality-checks, and shipping for you.
2.3 Expertise in Procurement/Sourcing
A good sourcing agent will be an expert in procurement/sourcing. The best way to confirm is by finding out the number of years a sourcing agent has been in the trade. A good sign is if they’ve been in the trade for five years or longer.
Another way to determine the agent’s expertise or credibility is by getting in touch with previous clients. If that is not possible, then start searching the web for customer reviews about the sourcing agent. If there are more positive reviews or word-of-mouth about the agent than there are negative reviews, then you’ve found yourself a good one.
Another key quality to look for in the sourcing agent is experienced in sourcing from China. The importance of this cannot be emphasized enough. Would you give your car to someone who has no experience of driving on the road but claims to know how to drive? You wouldn’t! In the same way, it would be foolish of you to put your trust in a rookie China sourcing agent or someone who has no previous experience of sourcing from China. The chances of things going wrong with a rookie sourcing agent are significant.
So, why take the risk? Do the sensible thing and look for an agent with five or more years of experience in sourcing products from China for clients. The sourcing agent you choose should not just have experience in sourcing products from China, but also in the inspection, consolidation, warehousing, and shipping of these products.
2.4 The Cost of the Sourcing Agent
One of the main reasons for any business to source products from China is to lower costs and save money. Therefore, you must consider the costs quoted by the different agents sourcing products from China. Ideally, the sourcing agent should charge you a price for the entire process of sourcing products from China based on the value of your order. They should also be able to negotiate prices for products with suppliers on your behalf to get you the lowest price possible. If you find such a sourcing agent, then waste no time to sign up with them for your sourcing needs.
You must ensure that the sourcing agent you choose can source products from China in a fair and transparent manner. You must have complete knowledge of your products’ whereabouts after you place an order for them through your sourcing agent. Transparency of the sourcing process is important because it ensures openness, communication, and accountability.
With a transparent process, no one can be held liable for a mistake they did not make. Additionally, a transparent process helps to eliminate duplication, make bulk purchasing easier, reduce procurement costs, improve record management, and plan your sourcing in a way that adds strategic value to the company. You are not hiring a sourcing agent but working with an on-ground partner for your business.
2.6 Ability to Handle Quality Control and Follow-Ups for You
If you’re concerned that the final product that reaches you wouldn’t be of the quality you expect or desire, then you should let your sourcing agent handle the task for you. However, you must choose a sourcing specialist with expertise and experience in handling the quality control of products manufactured in China.
The sourcing should have the capacity to perform the quality inspection in detail. Additionally, the agent should be able to communicate to the supplier any quality issues detected during the inspection to get them resolved at the earliest.
Another quality to look for in a sourcing agent is the ability to perform follow-ups. This is because following-up with Chinese suppliers can be a tiresome and frustrating experience for foreign businesses. However, a sourcing agent that knows the Chinese suppliers in and out and can communicate with them in their own language will solve this problem for you, allowing you to focus on your primary business activities.
2.7 Dropshipping Facility
Dropshipping is a way to fulfill orders and eliminate the need to keep products in stock. It helps to lower/eliminate your ordering, warehousing, and shipping costs. Dropshipping delays the need for you to buy a product until the sale is made, and the product purchase is paid for by the customer or end-user. While many sourcing agents of Chinese products offer a dropshipping facility to businesses, only a few of them have no minimum order quantity (MOQ) requirement.
While finding a top-rated sourcing agent to source products from China is not easy, you can increase your chances of finding such an agent by shortlisting China sourcing agents based on the qualities/factors mentioned above.
There should be no doubt in anyone’s mind that China is the best place to source all sorts of products in bulk at a low cost. However, to buy quality products at an affordable cost from China, you need the help of a specialist, and that specialist is a top-rated or reputed sourcing agent based in China. Using a top-rated agent to source products from China has many benefits, and you can never go wrong with this. We guarantee this!