If you’re considering outsourcing and offshoring your manufacturing to China, you may also want to consider hiring a sourcing agent. These experts work with companies who want to outsource their manufacturing to other countries. They assist with finding the best company to handle the manufacturing, negotiate contracts, serve as a translator, and provide business advice. Some sourcing agents do more than others, of course, so you always want to talk to the agent about what they offer.
When you hire a sourcing agent, you typically pay them a percentage of the overall job. They earn this commission each time you work with them. In some cases, you may actually hire the sourcing agent to handle all of your outsourcing. Usually, only large companies do this because it does mean paying the agent a monthly retainer.
Is it worth hiring a sourcing agent? In many cases, the answer is yes. There are a number of ways a sourcing agent can help you increase your profits and decrease your headaches.
You Don’t Have to Research the Market
If you’re considering outsourcing to China, you’re going to have to do your homework. Most people have no idea what companies in China even accept outsourcing jobs. You’ll need to spend a good amount of time doing your research and learning which companies are going to provide the right services for you. A sourcing agent already knows all about that. Once you contact the agent, they will be able to pull a list of companies that might be a good fit within a few minutes. Of course, you’ll need to do a little research on sourcing agents, but that will take a fraction of the time.
The companies your sourcing agent recommends will provide the best products for the best price, too, so you will be able to start off saving money right away. In many cases, these agents have built relationships with the manufacturers, so they may already have low rates locked in for their clients that you simply couldn’t negotiate yourself.
They Understand the Culture and the Language
Chinese culture is, in many ways, very different from other cultures. Like with any other culture, there are small faux pas and other little pitfalls that could upset your Chinese partners. In addition to studying Chinese businesses, many sourcing agents also speak Chinese (often Mandarin and Cantonese) and understand the culture. They won’t misspeak or accidentally say something confusing or offensive. Sometimes, a simple wrong word choice is enough to end negotiations or cost you a valuable discount.
Most sourcing agents are located in China or at least have an office there and visit regularly. This gives you a representative on the ground, so to speak. They can quickly meet with your manufacturer if something goes wrong or if you have questions. You don’t need to go through the headache of scheduling an international phone call or flying to China yourself, both of which can get very costly if you have to do them too often.
These are just a few reasons why hiring a sourcing agent can help you. The value of a sourcing agent far outweighs the cost, especially if you’re new to outsourcing and don’t know where to start.