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Product Sourcing overseas for your business can be a time consuming and difficult task. Sourcing the goods from another country requires certain important steps that you must complete.

Without proper research, you might have to compromise on quality and pricing. In such cases, a good Sourcing Company is your right chance of getting the best out of your experience.

Sourcing companies can help you with such tight corners. They are a great way to source your products efficiently for those who are new to the concept. We have elaborative information that should be enough to understand what a sourcing company is.

What is a sourcing company?

A sourcing company is an organization that can help you get good products. Now, how they work is not fixed. Sourcing companies provide a diverse range of services.

These services depend on your requirements so you can choose the right sourcing company for yourself. Sourcing companies provide you with numerous services.

They can find the right supplier, they can negotiate prices on your behalf, they can conduct quality inspections and they can arrange storage and shipping etc.

What does a sourcing company do?

A sourcing company works to implement a detailed set of procurement rules and regulations that are mainly aimed at locating, assessing and engaging the suppliers for goods to be purchased.

The sourcing company normally gathers a professional team for purchasing, quality assessment, management etc.

The team usually has knowledge in multiple languages, both local and foreign. The main tasks that a sourcing Company does include:

sourcing company

1. Product sourcing

Product Sourcing involves finding and locating of products to be sourced to the client. A sourcing company act as the middleman between the supplier and the client. They specialize in importing goods from foreign countries on the behalf of local businesses.

During product sourcing, the company usually tries to find out the best sources which have the best competitive prices in the international market.

This helps to save businessmen significant product costs, an essential factor in making of profits.(Related article:How To Minimize Risks When Import Products From China)

2. Order monitoring

Once the products to be sourced have been identified and purchases made, the next step a sourcing company will engage in is order monitoring.

After the ordered products have reached a certain milestone e.g. a certain shipment time, it is important for the sourcing company to notify their business client.

Similarly, if the order is going to get delayed or there is an expected delay in shipment date, the company has to issue alerts to the client which may be in form of telephone calls or email notifications.

3. Quality Control

Quality Control is a system that has been established to ensure that the quality of the products being sourced meets the customer’s or client’s requirements.

The set-out procedures and measures have to follow an established order. A product sample is usually checked against the set specification or benchmarks.

Quality control helps to ensure that any error or defects are fully eliminated or they are minimal. This helps to ensure that the product is consistent.

4. Logistics

The Logistics of a sourcing company is a comprehensive management and organization of the flow of products from the point of origin to the where they are required in order to meet the requirement of the business corporations or customers.

The details of logistics include the type of product to be shipped e.g. electronics, construction equipment, beauty products, foodstuffs, animals, and the mode of transport i.e. by air or by water.

It also includes abstract items such as information and time.

5. After-delivery

After the product has been packed and transported, the sourcing company has to check with its client after the delivery.

The packaging, security and quality requirements of the products have to be confirmed to ensure that the products the client has received are what they had ordered.

sourcing agent

The advantages of the sourcing company

The benefits of a sourcing company are numerous and they include:

1. Local Presence

Sourcing companies are stationed locally although they outsource their products internationally. As a client, nothing can be compared to having a close and trustworthy agent who is available locally at any time.

Their local presence means that you can handle your business with them in a local manner. This helps to cut down the costs that you would have been used to search for the products that you require and the costs involved in the shipment.

2. Access to Prices

A sourcing company can be termed as the overseas agent. They have direct access to prices of products from the source. They also deal with importation costs such as import duties, taxes, and tariffs. In regions where corruption is rife, a sourcing company can easily navigate through such complications.

Overall, a seasoned sourcing company has access to original financial information from the factories they network with. The company can negotiate with the supplier, ask for discounts and other relevant deals which the client may not have a direct access to.

This will helps the client to get goods in an affordable manner.

3. Time Efficiency

A seasoned sourcing company will be efficient in the delivery of items. They know multiple businesses and they have a formidable network hence they have great channels of communication which they can use to place requests for orders.

Their business professionalism and knowledge in multiple languages help to save time. Furthermore, the sourcing company’s good coordination skills and great business sense will overall help to improve the time efficiency.

4. Quality-Wise

A sourcing company has a greater understanding of the product quality as well as the rules and regulations of the foreign country. Sourcing requires extensive research hence the company can be relied upon to locate the appropriate company and to choose quality products.

They can inspect companies to check if they meet the production standards and this may include ethical evaluations such as labor conditions, environmental pollution etc.

The company will assess your product needs and they match them with the relevant supplier thereby ensuring that the quality of the products that the client wants are met.

sourcing agent in China

Who needs a sourcing company in Asia?

Asia is one of the regions in the world with a lot of corporations which require the use of sourcing companies. Some of the entities that need to use a sourcing company in Asia include:

• Small and Medium-Sized Enterprises which are constantly putting massive efforts in sales and marketing of their products but they are lacking when it comes quality and purchasing of products.

• Groups, businesses or brands which carry out complex operations such as re-packing and product pooling.

• Buyers who are involved in business dealings that span across multiple industries and they need to deal with a particular number of traders and factories.

• All companies which are involved in certain types of market niches, those that are very adamant in ensuring that there is a tight control of production, brand protection, design protection as well as quality management of their goods.

Overall, sourcing companies do not only offer sells services, they are also specialized in process specific services and their main interest is usually their clients. Their focus is on the cost of the product, quality and also associated risks.

Who is a good Sourcing Company?

If you have made your mind on using a sourcing company for your business, you must be aware of the key factors. There are some points to differentiate a good sourcing company.

These points can effectively help you to choose the right sourcing company.  

Have a look at the following points to choose a good sourcing company for your needs.

Business License

No matter how good a company is, you should always conduct business through a sourcing company with a business license. A business license ensures authenticity and a trustworthy business relationship between all parties involved.

Experience & Specialization

There are different sourcing companies with different specializations. The specializations might be regarding a country, a product or a supplier.

Hence, you should always consider a sourcing company with a particular specialization. This will enable you to learn about the experience they have.

Also, you have chances of getting a better rates with a sourcing company that has a specialization in your required products.

Testimonials

Testimonials from previous customers also help a lot. If you are looking to conduct business with a sourcing company, you must read their testimonials and reviews.

This will give you a better idea of the level of services that are provided by them.

Language

A good sourcing company is not restricted by languages. If you want to hire a sourcing company, find one that does not have any language barriers.

This will ensure two things:

1. They have experience of working with foreign clients and you can trust them.

2.There are no communication lapses or language barriers that can affect your business.

Location & Flexibility

Where a sourcing company is located is highly important. Your sourcing agent should be accessible. This will ensure that you get the right accessibility with your agent.

You should always ask your sourcing agent for customized arrangements that suit you best. A good sourcing agent will be willing to show some flexibility with their plans for you.

Supplier Network

The better supplier networks a sourcing agent has, the more chances there are to get products at better prices. Hence, you should research the supplier network of your sourcing agent. This will ensure that you are getting a clear picture of further options.

Transparency

Transparency should be your main concern while choosing a sourcing agent. It will ensure that you can see what is going on. This leaves lesser chances of fraudulent activities.

Also, you will be able to get a better idea of prices, commissions and more.  

Therefore, you should always choose a sourcing agent that has transparent methods.

Who is a bad Sourcing company?

Now you have a clear idea of what makes a sourcing agent good, you should also consider some red flags that make a sourcing agent bad.

Hence, there are some clear instructions to get an idea of bad sourcing companies. If you see any of the following in a sourcing company, you should avoid them:

1.The sourcing agent is paid by the factory

Some sourcing agents are paid by both you and the factory. Such sourcing agents are loyal to the factory as they are more frequent clients.

You should avoid such sourcing agents. You should always choose a sourcing agent that is willing to work for you. Avoid the sourcing companies that are not working for you but the factory or supplier.

2.The Sourcing Agent offers quality inspections but works on commission

Some sourcing agents offer quality inspections but they work on commission. You should avoid those sourcing agents. The clear reason is, they are more concerned about their commission rather than the quality.

Hence, there are high chances of getting false inspection reports. There are also chances that these agents may be working for some other competitors.

3.Don’t have a business license

Never conduct business with any company that does not have a business license. Companies without a business license are not reliable. They also have higher chances of fraudulent transactions.

4.Taking too much time to find a supplier

There are sourcing agents who are faking the experience in the market. A good agent will always have a list of suppliers ready for you.

If they are taking longer to find a supplier for you, it means that they have lied about their experience. If any agent takes more than a week to find you a supplier, you should instantly cancel any contracts.

5.Poor language skills

There are sourcing agents in the market with poor language skills. That means they are not able to communicate with you efficiently. This reduces the chance of getting the right products for you.

If you feel that your communication with the agent is getting affected by a lack of language skills, you should terminate operations with them.

How to find the best Sourcing Company

Since you have a better idea now on good and bad sourcing agents. It is time to sort the process out for you. You should be extremely careful with the internal process of finding the best sourcing company.

The more efficient your process is, the better chances you have towards profitability.

To ensure a smooth relationship with your sourcing company, you must set your process on the following steps.

Step 1: Define what you need

First of all, you should have a clear picture in mind about what you need. This includes products, the country you want to source from and more. Hence, you should define what you need and work accordingly.

Step 2: Set your budget

Once you have defined the products that you are going to the source, it is time that you should set a budget limit. The budget limit should be approximate minimum and maximum for you.

Hence, set a budget and stick to it. While setting a budget limit, you should consider all the costs. These costs include shipping, sourcing agent fees, product costs, etc.

Step 3: Choose a type of sourcing company

With the product and budget decided, you can now choose the type of sourcing company you will need. This will ensure that you get the best company. There are certain sourcing companies of different sizes.

These include working on commissions or working on a flat fee.  There is also a wide range of services provided by these sourcing companies.

So, choose the right sourcing company that will match your needs best.

Step 4: Research & Compare

So, you got your budget set, you have defined what you need and you have a clear idea on what type of sourcing company you will choose.

Now, it is time to do research based on these parameters. Shortlist the companies that fall under your requirements and then compare these.  

This will ensure that you can get the best sourcing company that suits your requirements. Comparison will also enable you to save some money by choosing the best-priced sourcing agent.  

Step 5: Get different offers & ask for business licenses

You need to ask the shortlisted sourcing companies for offers. They will be happy to provide you with a no-obligation quote. Feel free to ask for the offers from these sourcing agents.

Also, ask them for their business license. You should also verify these licenses with authorities. This will reduce the chances of getting ripped off by a phishing scam.

Step 6: Negotiate payments

Negotiation is the best way to cut down your costs and increase profitability. The lesser your price is, the better you will earn. Hence, you must negotiate the payments with your sourcing agents.

They can also negotiate with the supplier/manufacturer on your behalf. You should never hesitate to negotiate and get the best possible price.

Step 7: Write down everything that was agreed upon

The best practice for any business is to write down any contract that you have agreed upon. This includes all the terms and conditions, prices and more.

Feel free to ask for a written contract with your sourcing agent. A trusted and honest sourcing agent will be happier to write everything down and provide you with a satisfying written contract.

How much does a Sourcing Company cost?

There are different sourcing companies with different payment methods. You should consider them all and choose the right sourcing company according to your preferred methods.

The price plans vary according to the services provided by these companies.

To get a better idea of the costs of sourcing companies, please have a look at the following:

1.Commission

There are sourcing companies that work on commission. That means they charge you a certain percentage on the value of goods being sourced through them. This is the perfect method if you want to source the products and only pay for the services you are getting.

2.Hourly rate

This is one of the most popular methods among US sourcing agents. They charge you an hourly fee for time that is being spent on the work.

However, there are some chances of paying extra than you owe. You should only opt for this payment structure if you trust the sourcing company and they are transparent.

3.Flat fee

Flat fee is another popular method to get the products sourced if you are looking to have the products sourced for you. Some agents only charge a flat fee for the services they are providing.

The flat fee ensures that you can cover all the costs in advance. Also, there are no unpleasant surprises.

4.Mixed payment structure

Given that you don’t like any of the above payment methods, you can also get a mixed payment structure. Some sourcing agents offer a mixed payment structure customized for your needs.

Never hesitate to ask your sourcing agent if they can provide you with such a plan. You should also agree on the terms that suit you best and not the agent.

Top 5 Product Sourcing Companies

So, now you have a clear idea of good and bad sourcing companies, and their payment structures. You also are aware of the process you need to opt to get the products sourced.

There are 5 top products sourcing companies from china. These will ensure that you can compare effectively and have a list prepared in your mind to choose the right sourcing company for your needs.

These companies include:

1.LeelineSourcing

LeelineSourcing is the top company that provides a complete range of product sourcing services from China for you. Their options are not limited and they have a highly transparent method.

LeelineSourcing provides you with quality inspection services, price negotiation, and more. They have zero sourcing fees and only charge you with a slight percentage on the actual value of goods.

2.Unitedgs

United Global Sourcing company is a US-based company that provides a variety of sourcing services. They are the best option for you if you are looking for an agent sourcing service within the USA.

3.Dragonsourcing 

Dragon Sourcing Company is conducting business within China since 2004. They have vast experience in their hand and a huge network of suppliers. They support sourcing services for over 200 countries from China.

4.Partnerloggroup

Partnerloggroup is a multinational sourcing agent. They have offices in US, Sweden, and Hong Kong. They provide a diverse range of sourcing agent services across the world.

The pricing is relatively higher, but so are the quality standards.

5.Et2c

Et2c is another Asian sourcing company. They provide product sourcing services across the world from China.

Conclusion

This is a definitive guide that will help you find the right sourcing agent. You should consider all the pointers and carefully choose the right supplier for your sourcing needs.

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FOUNDER’S NOTE
LeelineSourcing will always help you buy cheap and good quality goods from China.

sharline leelinesourcing founder


About the author

Sharline is the founder of LeelineSourcing.com. With 10 years of experience sourcing in China, She loves to share knowledge and ideas in sourcing bussiness.She writes only the truths which others are normally not willing to tell. This makes her posts distinguishable from other import & export articles.

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