China is the largest manufacturing country in the world. Getting your products made here can reduce production costs significantly even if you have to ship good halfway across the globe.
Starting an import business means you need a good manufacturer. The manufacturer is your business pillar because they control your inventory quality, which in turn controls how consumers interact with your brand. Finding a good supplier means superior product quality, happy consumers, great feedback, and increased sales. Alternatively, a bad supplier can lead to an unsuccessful business. So, determine how you want to approach the manufacturers – directly or using third-party services like trading companies or sourcing agents.
Unfortunately, handling manufacturers directly is not recommended. There are also the China sourcing agents and trading services you need to consider. This means to help work in an alien environment you have to choose between manufacturers, trading services, and China buying agents.
It is best to communicate directly with the product manufacturers, especially if they have the skills and are familiar with your kind of project. Cost is the main feature that appeals to businesses to work with manufacturers directly.
Manufacturers also define themselves as trading services or sourcing agents. They may be producing a narrow range of products on their site but will outsource other production lines. So, the first step is to get 3rd party verification report before investing in 3rd party factory audit.
China trading services
Working directly with China manufacturers is cheaper than hiring a trading service. They are a medium between you and the local factory. However, there are pitfalls in that they may be partial during disputes. They will seek to defend the manufacturer’s interest because you are not able to directly contact the manufacturer. Even if they are capable to negotiate at lower per-unit rates but you need to find reliable trading services.
China sourcing agents
Sourcing agents will represent your company and handle problems that pop up locally. They will be loyal to you instead of the manufacturer during disagreements. Just like trading services the sourcing agents have a good network and the ability to drive economies of scale to lower final per unit cost.
Reliable sourcing agents are proactive about Quality Control processes essential for an array of products. It includes contracts in the local language, product inspections, setting QC systems, and follow-up. They check to verify the product resembles the given specifications and if necessary handle the problems. Unlike trading services, the sourcing agent will not have in-depth knowledge about the product, but just write the specifications in detail, so they can check it at the factory site.
Reliable China buying agents can take charge of the whole sourcing process including finding a manufacturer, checking Chinese contracts, inspecting compliance, and even handling the supply chain.
The subtle difference between trading services and the sourcing agent is that the former can be better at decreasing per unit factory price. The latter is capable to offer greater savings in the overall supply chain.
Which is better to work with – manufacturer, trading services, or sourcing agents?
Each importer’s needs differ, so the choice may depend on several factors like experience, familiarity with import processes and regulations, knowledge about compliance protocols in regions the product you plan to sell, order size, and available resources for import management.
Large buyers can fulfill the manufacturer’s MOQs and is familiar with import processes and regulations, knows compliance protocols, and have available resources for import management. They can consider working with manufacturers directly.
If orders can fulfill the MOQs but the experience is insufficient or negligible then go for a direct manufacturer but involve a sourcing agent as your representative on the local grounds. They will handle the project management, and compliance requirements, as well as deal with contracts and shipping.
If your order is not large enough then choose a trading company. They specialize in a specific niche and develop a wide product range. The products are manufactured in different factories. It offers an option to import small quantities of multiple products.
Even if are working with trading services, you can engage a sourcing agent to handle the risks, and manage the project, QC, and logistic needs.
China buying agents work locally, so have a better way to find established factories. Trading services dominate B2B portals, but a sourcing agent will handle the entire sourcing and importing process.
Sourcing agents can add value when there is a dispute-like problem during pre-shipment inspections. The negotiations in such circumstances with the manufacturer are intense. Getting them to re-work completed orders to fulfill your expectations is stressful. A local representative negotiating the modification terms will make a vast difference.
Benefits of engaging sourcing agents in China
Working with China buying agents makes it possible for importers to find the most suitable manufacturers. Since the agents reside in the native country of the supplier, they can get the work done faster and efficiently. They are well-versed in navigating the manufacturing sector than a foreigner. They check raw materials as well as inspect the process at different manufacturing phases to ensure quality. It helps to keep production at the minimum possible cost and prevent downtime due to delays.
He verified the purchase applications and compares items requested in the master list, clarifies unclear items, and if necessary recommends options. He ensures that the purchase items are obtained and forwards them to the suppliers. A good agent is the eye, nose, and ear of your company. They visit the manufacturing site and run background checks to ensure you receive goods as expected.
An appropriate China buying agents releases 80% of the product manufacturing burden in an alien environment. You have to just communicate with a couple of members in a familiar language rather than talking to multiple factory employees who have insufficient English knowledge.
It is not possible to discuss your design ideas clearly with the employees at the factory. You need a representative with technical know-how, who in turn will communicate on your behalf with the supplier and get back to you.
China buying agents are competent to ensure that you get high quality products manufactured by an established supplier. They do it more efficiently than you, so consider looking for an experienced sourcing agency in China.