Why should we work with a sourcing company? Often throughout my working years in China, I have been asked this question by Clients/Buyers/Amazon sellers (New and Experienced ones both).
They ask questions like - Why work with a sourcing company? What are the Pros and Cons? Is it worth our time? How much are the fees/commission? And yes, as any good business service provider does, I give them as much information as possible.
I would like to flesh out my thoughts on the topic based on my experience in dealing with different buyers/sellers from all around the world and from my experience of starting my sourcing company in China. I have mentioned below the general response of buyers towards sourcing comapnies. A question for you -'Is that you?'
- Often the first thought comes to any buyer or company is about Money. They have to think about how much they have to compromise on their profits & margins. They sometimes feel that any sourcing company would not reveal the real factory prices and quote them prices after adding high margins. So, it is quite considerable of any buyer/Amazon Seller to remove a sourcing company out of the equation.
- A buyer could think - Why should he go through a sourcing company when he can easily source all the suppliers on the internet through websites like Alibaba, Global Sources, Made In China, Ali Express, DHGATE, HKDTC, 1688, Google search and others?
- Unlike before Language is also not much of an issue anymore due to the emergence of Google translate, WeChat App Translation, and other various translation Apps. And these days with Escrow payment systems like Alibaba Trade assurance and PayPal it has become even easier and safer to do business through technology. A buyer could also attend exhibitions in China to meet potential suppliers directly. These days most Chinese suppliers are putting up their booths in other country exhibitions also. So, it’s never been this easier to do business than now.
- Also, there are now many good verified third-party Quality Control Inspection Companies Located in China that provide full inspection services with reasonable prices.
- Some buyers might also feel that working through a sourcing company might be time-consuming because everything has to be relayed through the sourcing company to the supplier and vice versa. So many buyers think this is wasting time and hence prefer to deal directly with suppliers.
- Also, when there are modifications in a product, they feel it’s best to explain their exact needs and requirements directly to a supplier instead of going through a sourcing company.
- Some buyers also would be apprehensive to share product ideas with a sourcing company who could leak or sell their product idea.
- Most buyers and Amazon sellers also want to have full knowledge as to where their goods are going to be manufactured. So, they feel that there would not be that much transparency with a sourcing company and they can have some quality issues.
Now let us get to the more interesting part which will help you decide whether you want to work with a sourcing company in China OR not. Following are the things all the buyers usually think when they want to decide for themselves.
What exactly is a Sourcing Company?
In business, it’s nearly become part of human nature to ask for a Middle Man/Company/Broker/Agent/Sourcer/Trader. (We have many nicknames).With the gigantic leap in technology over the last 20 years, it is becoming true even more so.
We can call it a sourcing company when it provides us following services:
- Source the right product and a good reliable supplier for the client.
- Negotiate the best possible prices and arrange samples to the client.
- Make full detailed contracts with all the terms and conditions stated clearly both to the supplier and client. The contracts include payment terms, required Certifications, delivery date, packaging/labels, etc.
- If necessary, visit the supplier before confirming the order to check their reliability, capabilities, an confirm whether they are a manufacturer or trading company.
- Follow up with the suppliers during the production of the goods.
- Inspector gets the goods inspected for quality control before the shipment.
- Arrange the shipment of the Goods with the best shipping prices and speed either by air or sea. Also, provide all the documentation to clients so that they can clear the goods from their local customs.
- If there is more than one product and supplier, then coordinate with the factories to club the goods together for shipment.
- Even after your clients receive the goods, provide after service to them and tend to their other needs and requirements.
So basically, these are some of the services and functions of any good sourcing company.
Now, this is a question for you to meditate - 'What value can a Sourcing Company provide to buyers or Amazon Sellers?'
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