It’s a slippery slope when you decide to outsource production to China. First, you are dealing with a possibly opposite business culture than you are used to. There’s also the government bureaucracy to deal with, which is a whole different monster on its own. This is why hiring a China sourcing agent—which can be an individual or a group—that will make the licensing process smoother, ensures you are connected to the right outsource manufacturer, and so forth.
So what can you expect from the trading company or representative?
- They help with the quality control
- Facilitate logistics
- Help clear customs for your products
- Ensure buffer in product supply
- Negotiate the best price for product and labor
- Be your official representative in local trade fairs and exhibits
More often than not, you are at the mercy of your sourcing agent so the most important thing is to find the best one out there.
While trust is the most important thing here, you also have to protect yourself in case of a default. Sadly, with all the benefits of US outsourcing to China, there are some people who are bound to take advantage of unsuspecting businessmen.
They Have a Permit to Operate and Export License
This one is fairly easy to check. Licenses are usually processed at the Administration for Industry and Commerce. You may need translators for this because the permit contains only Chinese characters. It’s also noteworthy to know if the license is already expired at the time of your transaction.
They are Willing to Sign a Contract
Don’t ever agree to a verbal agreement. Before entering into a transaction with a Chinese sourcing agent, make sure there’s a written contract. This is your best bet if in case litigation will be an option down the road in the outsourcing of manufacturing products.
They Speak English Well
This might be a simple matter, and you may even make concessions if the sourcing agent promises to hire a translator. But there are a lot of gray areas that may be lost in translation. This is why the representative should be fluent in English so you can talk to him or her directly.
They Have to Be Experts in the Field
There’s a huge difference between a secretary and a sourcing agent. The first one will just handle logistics for you and make some calls. The second one is well-versed in the outsourcing production pros and cons. They have to know the industry you are in like the back of their hand so they can anticipate problems and come up with solutions instantly.
They Can Keep Secrets
The Chinese sourcing agent should be able to keep your IP secret, and not share it with anybody in order to undercut your business. This should be specified in the contract at the outset. Please also note of the hidden commissions, a practice where the agent and the outsource manufacturer are actually planning to keep quality low and pocketing the difference.
Keep these ideas in mind as you search for a sourcing agent. They should have your best interest in mind and you should feel confident working with them.