Sourcing

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China Sourcing Agent: A Guide to Sourcing Products from China in 2022

by Stanley Nieh

CHINA SOURCING AGENT A GUIDE TO SOURCING PRODUCTS FROM CHINA

Whether you’re in eCommerce or retail, a China sourcing agent can be a great addition to your business, especially when you’re ready to scale and order in bulk

Product sourcing from China without an agent is also a possibility, but it comes with a lot more challenges and obstacles. From speaking the local language to avoiding scams, a local sourcing agent is the best solution to these issues. 

To feel the most benefits, you need to find a cost-effective sourcing agent with experience in your product niche. But, among the different sourcing agents in China, how to find the best one for your needs? How to ensure that you get what you paid for and avoid scams?

We’ve got your back! Let’s dive in and learn everything about Chinese sourcing agents and buying from China! 

china sourcing agent

What Does Sourcing from China Involve? 

In theory, you can do the task of sourcing products from China on your own. However, in practice, you need to be aware that this is not a small task to undertake. It involves a lot of time, effort, and research in order to find the right suppliers and manage the entire supply chain.

If you’re looking for OEM services or private labeling, things become even more complicated. In this case, you’re the one that has to work directly with factories on product development.

Product sourcing from China involves:

Researching and Vetting Suppliers 

If you decide to source products from China on your own, you always have to start by researching, screening, and isolating the right suppliers for your needs. 

You can do this by going to B2B marketplaces like Alibaba or 1688. Note that you might need language assistance since 1688 is a local website. 

Another way to do this is by visiting China trade shows directly. For those without experience in the Chinese market, we recommend using a sourcing agent. 

Finding a Good Price vs. Value Ratio

Naturally, you’ll want the most bang for your buck! Usually, buying directly from factories in bulk can give you the best prices. Trade companies are another option if you don’t mind paying slightly more.

Finding a Good Price vs. Value Ratio

At this step, a sourcing agent could be useful since they’re able to negotiate the prices and speak the local language. 

Starting with a Small Order

Remember to always start small when first working with a new supplier: either order a sample first or a low MOQ order. 

By ordering a sample, you’ll be able to check the product quality as well as the delivery speed. Additionally, you can take your own product photos and upload them for best results. 

Most importantly, placing a small first order lowers your risks in case the product doesn’t turn out as expected or doesn’t sell well enough. 

Following Up on Product Development and Branding

Businesses looking to develop brand new products will face even more challenges if they work without a sourcing agent. Taking over the responsibility of overseeing product development involves constant follow-ups and strict quality control processes in place. 

Without a sourcing agent, you’ll find it difficult to navigate the manufacturing management. In cases like these, you need an agent familiar with private labeling, white labeling, and ODM or OEM services

Following Up on Product Development and Branding

Quality Inspection and Quality Control

Each bulk order needs to go through a quality inspection. When you work without a sourcing agent performing quality control, you are the one responsible for it. 

You can always ask your supplier if they perform quality control or hire a third-party service provider to do it instead.

Performing Factory Audits (if necessary)

Often, the manufacturing of a product and the factory conditions will need to comply with rules and regulations. 

With a factory audit, you see if the raw materials are of good quality, if the conditions of manufacturing are satisfactory, and if the factory’s production capacities suit your growing needs. 

A sourcing agent can perform factory audits if and when necessary. But, without an agent, this responsibility falls on your shoulders. 

Shipping Incoterms, Import, and Export

eCommerce owners and retailers that want to take care of exporting and importing bulk goods from China by themselves need to have a solid understanding of shipping Incoterms and international trade.

If you don’t, partner with a sourcing agent or freight forwarders who will ship in your name. 

Inventory Storage and Fulfillment

Last but not least, product sourcing from China entails taking care of storage and order fulfillment

If you collaborate with a full-service sourcing company in China, they will take care of inventory and order fulfillment. However, without a sourcing agent, you have to find a warehousing solution and a way to fulfill orders. 

Inventory Storage and Fulfillment

What Is a Chinese Sourcing Agent?

A Chinese sourcing agent can be an individual or a company that helps you find the right suppliers and source, buy, or develop products for your business. The majority of suppliers and factories are in China, so working with a Chinese sourcing agent will help you leverage their network, language, and connections. 

What Does a Chinese Sourcing Agent Do?

The main job of a Chinese sourcing agent is to find qualified suppliers (factories or wholesalers) that sell your desired types of products in the quantity you need. They should represent your needs and negotiate prices in your favor. Finding the best price vs. value ratio should always be their aim. 

Additionally, some Chinese sourcing agents such as Niche, offer all-around services including warehousing, branding, product development, order fulfillment, dropshipping, etc. These full-service sourcing agents can save you a lot of time and streamline your supply chain. 

Good Chinese sourcing agents should be able to source from different channels such as B2B websites like Alibaba and 1688, as well as use their local connections and network. 

What Are Different Types of Chinese Sourcing Agents?

Not all Chinese sourcing agents are the same. Typically, you will find three main types of sourcing agents:

Individual Sourcing Agent

These are usually local individuals, not companies, who have their own network and knowledge of the Chinese markets. If you’re lucky, you could find one that’s really good at what they do. 

However, beware that individual agents often charge commissions from manufacturers. This is important to know because, in case of a conflict, they will always defend the manufacturer. 

Sourcing Agency

Sourcing agencies usually employ more sourcing agents, each an expert in a different niche. With this, they can offer a greater scope of product sourcing services and cover more niches and industries. 

Full-Service Sourcing Company

The difference between a sourcing agency and a full-service sourcing company is that the latter provides a broader scope of services. Good Chinese sourcing companies can help you with:

  • Product sourcing
  • Product development
  • Product branding
  • Private labeling
  • White labeling
  • OEM or ODM services
  • Warehousing
  • Quality inspection
  • Order fulfillment
  • Dropshipping

We recommend sourcing companies that work on a commission basis rather than a flat fee upfront. This will help you avoid scams and pay according to the size of your order.

Working with full-service product sourcing agents can save you a lot of time and money in the long run. Instead of going to different logistics providers, you deal with one company that does everything. 

When and Why Do You Need a Chinese Sourcing Agent?

Every eCommerce and retail business can benefit from a sourcing agent in China. If you find yourself in one or more of the following statements, partner up with a sourcing agent:

  • You have no experience importing products from China.
  • You need OEM, private labeling, or product development.
  • You need additional services such as inventory storage, order fulfillment, etc.
  • You want to buy in bulk from China and scale your business
  • You don’t speak the language and don’t have a local presence in China.
  • You want to decrease the risk of buying from unknown suppliers.
  • You need someone in China that will perform factory audits and quality inspection.
  • You want to source from B2B websites like Alibaba, 1688, or tap into local markets and trade shows.
When and Why Do You Need a Chinese Sourcing Agent

Benefits of Using a Chinese Sourcing Agent

Collaborating with a Chinese sourcing agent, especially if it’s a full-service one, comes with many benefits. Most notably:

Saves You Time

A good sourcing agent can save you a lot of time and effort and let you focus on what’s really important to you – marketing and sales.

With a full-service sourcing company, you won’t have to worry about any step of supply chain management. From product sourcing to branding, packaging, and fulfillment – your sourcing agent will take care of everything. 

Matches You with the Right Suppliers

Another advantage of using a sourcing agent is finding the right suppliers. What do we mean by right? Here, we mean the suppliers that offer the best price vs. quality ratio at the best turnaround time. 

Once you find the right and reliable suppliers, scaling and growing will become much easier. 

Less Risk of Scams

A sourcing agent will drastically decrease your risk of getting scammed or becoming the victim of fraud. Chinese sourcing agents usually have their trusted network and connections to year-long suppliers for different types of products. 

So, working with an agent is definitely beneficial in this regard. 

Negotiating Product Prices

Negotiating lower product prices is part of the job of a sourcing agent. They know how to do it best! So, if you’re not the best negotiator, a sourcing agent can help you out. 

A Local Presence and Network

Sourcing agents in China are local, speak the language, know the culture, and are able to find the best deals. As a foreigner, navigating the Chinese market without the help of a local is impossible. 

Having a local guide like a sourcing agent in China will also help you stay compliant with local rules and avoid translation errors in official export documentation. 

An agent that speaks the language is especially important if you’re developing a product in China. Most Chinese manufacturers are used to dealing with locals and they don’t speak English or another foreign language. A China sourcing agent is your best solution for this problem.

Help with Export, Import, and Shipping Incoterms

Your chosen sourcing agent needs to have export/import knowledge and be well-versed in international trade. At the very minimum, they need to be familiar with shipping Incoterms and help you with customs clearance. 

A sourcing agent that offers dropshipping services is perfect if you have international buyers in more than one country. They will be familiar with the rules of each country and help you ship orders to your end customers hassle-free. 

Juggling Multiple Suppliers

Another area where sourcing agents can be really helpful is if you need to deal with multiple suppliers. 

This is often the case for general eCommerce stores selling different types of products. They usually have to deal with more than one supplier. And, this can be very time-consuming without a sourcing agent. 

Overseeing Product Development

Working directly with a factory in China is even more challenging if you’re developing a new product. 

Having a local agent that speaks the language and can oversee the manufacturing or perform a factory audit is a great advantage for your business. 

Overseeing Product Development

Quality Control and Inspections

A sourcing agent is a great solution when you need a third-party quality control provider since they are local and can easily return or replace products if needed. 

Unfortunately, controlling production and managing Chinese manufacturers is pretty impossible when you’re not there on the spot. 

Product and Package Branding

The next thing where you might find a sourcing agent useful is if you need white labeling, product branding, or branded packaging services. 

In cases like these, full-service agents like Niche are at your disposal. 

Warehousing and Inventory Storage

A good sourcing agent should also offer warehousing services and inventory storage solutions close to your customers. 

This is a great plus that will allow you to offer better delivery times. For instance, if your customer base is in the US, an agent with US warehouses can be gold for streamlining your logistics. 

Order Fulfillment and Shipping

Finally, you’ll benefit from having a sourcing agent that’s able to fulfill orders and offers several different worldwide shipping methods. 

Sourcing Agent Fees: How Much Do Sourcing Agents Charge?

The three most common types of payment structures you’ll encounter are flat fees, hourly charges, and commission-based models. 

Flat Fees

Many sourcing agents in China charge a flat fee upfront. There are always slight differences in the charges(i.e. per week, per month, etc). In any case, this is not the best option for bulk orders. 

Often, flat fees also lack transparency. Always ask for a cost breakdown to learn exactly what services you’re being charged for. 

Hourly Charges

Some sourcing agents in China, typically freelance individuals, might ask to be charged per hour. This payment structure has its ups and downs.

For instance, you’ll pay a flat hourly rate no matter the size of your order. However, nothing stops the agent from sourcing slower and taking their time so that they can charge you more. 

Commission-Based Models

Commission-based models are usually anywhere from 5% to 10% of the total order value. These models are fair for both parties since they depend on the size of your order. 

No Upfront Fees

A Chinese sourcing agent confident in their abilities to find the best products for your needs will offer a free quote service. Being able to see what your agent can do upfront without any risks or obligations is a great way to build trust and make an informed decision. 

So, whenever possible, avoid paying upfront until you get more information and insights. 

How to Find a Sourcing Agent in China That’s Right for Your Business?

Your sourcing agent can make or break your business. You must find one that’s able to match you with the right suppliers at the right price.

A Business License

The sourcing agent that you choose has to show you their business license or trading license when you ask them to. They need to be able to verify that they’re a real business entity. 

Experience in Your Product Niche

The second thing you want to do is find a sourcing agent that has experience in your niche or industry. Some full-service agents like Niche have experts that cover every industry, while others are limited to several types of products only. 

Let’s say you want to order wholesale kitchen knives, your best bet would be sourcing agents experienced in wholesale knife sourcing. 

Experience in Your Product Niche

Good Ratings and Reviews

You want your China sourcing agent to have good customer reviews, testimonials, and ratings. Also, it’s a good idea to ask them for some customer references. Google them, and check their background. That’s how you vet and choose a trustworthy sourcing agent. 

An All-Around Service

Next, you want to make sure that the sourcing agent you choose offers all the services you need. Some agents will simply establish a connection between you and a supplier, while others will offer an all-around service such as dropshipping, storage, fulfillment, packaging, etc. 

For instance, if you want to develop a brand new product, you will need a sourcing agent that’s well-versed in OEM services and private labeling. 

Fits Your Budget

Naturally, the sourcing agent fees need to fit into your planned budget. Otherwise, you’re cutting from your profits. However, don’t do the mistake of always going for the cheapest service. 

In China, just like anywhere else, the price matches the quality. So, don’t expect to pay cents and get something incredible in return. 

Having said this, beware of sourcing agents that offer incredible services for meager prices. You might be getting scammed!

Transparent Process and Expenses

Next, you want to work with an agent with a transparent way of doing business and gives you a clear breakdown of the costs in advance. No small font hidden charges! The more transparent the supply chain, the better it is for your business. 

Warehouses Close to Customers

Ideally, you’d want a sourcing agent with warehouses that are geographically close to your customers. With this, you’ll shorten the delivery time and increase customer satisfaction. 

Warehouses Close to Customers

How to Filter Out the Bad Chinese Sourcing Agents?

To help you make the right decision when selecting a good China sourcing agent, we’ve put together a list of red flags to avoid:

  • Sourcing agents that are paid by the factory or manufacturer
  • Sourcing companies that work with a flat upfront fee regardless of the order size
  • Individual sourcing agents without proof or references of past work
  • Slow sourcing service and a lack of customer support
  • No language skills (the sourcing agent has to speak English at the very minimum so that you’re able to communicate your request)
  • No additional services (acting only as a middleman while you need dropshipping, for example)
  • Way over your budget or product quality that doesn’t match the price
  • Doesn’t allow you to send a third-party inspection service

How to Work with Sourcing Agents in China?

Here are the usual steps to follow when you work with a sourcing agent for the first time:

Step 1: Get in Touch and Describe Your Product

Let your sourcing agent know the type of product you need and give them the exact product specifications. Be as precise as possible and give them the exact color code, sizes, dimensions, materials, etc. 

This is the stage when you inform your agent if you need a new product developed, your branding added, or simply wholesale buying.

Step 2: Wait for a Quote

Your sourcing agent will start working and find the best product price and quality for your budget. They will present you with a quote and offer. If you like it and it fits your budget, accept the offer.

Step 3: Order a Sample

Before you order in bulk, ask your sourcing agent for a sample. In the case of custom products, this can be the unmodified or white-label version. In any case, always ask for a sample first. 

Samples are not always free. So, you might need to pay for it. However, if an agent refuses to send you a sample even if you pay for it, it’s definitely a red flag. 

Step 3 Order a Sample

Step 4: Place and Pay for the Order

Next, it’s time to place your order and make the initial deposit. Smaller orders might need full payment upfront. However, for bulk orders, you will usually pay a small deposit upfront (about 30%), and the rest after your entire order is produced. 

Step 5: Receiving and Quality Inspection

A good sourcing agent should perform quality inspection and ensure that the products are free of faults and manufactured according to your quality expectations. 

Step 6: Storage and Warehousing

Let your sourcing agent know if you want them to store the order in their warehouses and help you with dropshipping. Or, perhaps you want your bulk stock sent to your FBA or other 3PL warehouses. 

Step 7: Order Fulfillment and Shipping

Finally, it’s time to decide how you will fulfill orders and ship them to your end customers. A full-service sourcing agent will also offer order fulfillment and dropshipping. Another option would be to ship your products to Amazon FBA warehouses or another third-party logistics warehouse. 

FAQs about China Sourcing Agents

We want to leave no question unanswered, so let’s look at some of the most frequently asked questions on the subject of Chinese sourcing agents. 

How to Find the Right Alibaba Agent?

If you need an Alibaba sourcing agent, you have several options:

Google Search

Go to Google and search for “Alibaba sourcing agent in China” or something similar. Check the results you get and see if you find an agent that fits your business and product needs. 

Google Search

Search on Alibaba

The next thing you can do is head over directly to Alibaba and look for shipping forwarders or 3PLs to help you fulfill and ship. But, in this case, you’ll need to source the products on your own. 

Scope of Services Needed

Make sure that the agent you choose provides the right scope of services you need. Every part of your supply chain management can be outsourced with the help of a full-service agent. 

Freelance Websites

If you don’t mind working with individual sourcing agents instead of a company, you could turn to platforms like Upwork or Fiverr. There, you’ll find many Alibaba sourcing agents in many different niches. 

We advise you to stay cautious when working with individual sourcing agents due to the high risk of fraud and the inability to verify their backgrounds. 

Freelance Websites

Word of Mouth or Referrals

Last but not least, you could join communities or forums and ask for references from other eCommerce owners or retailers. Hearing the experience of others can be of great help when choosing. 

Experience and Specialization

When deciding if an Alibaba agent is right for you, look at their experience and the niche they specialize in. This will give you a good insight into their connections and supplier network in China. 

NicheDropshipping

Get in touch with Niche and use our free sourcing service to see what we can do for you with zero risks and obligations! We can source from Alibaba suppliers and local B2B platforms like 1688.

Niche is one of the best sourcing agents in China with years of experience in all types of industries. You can focus on marketing and selling and leave the rest to us and our fulfillment center. 

What Should I Ask a Chinese Sourcing Agent?

When choosing a good sourcing agent in China, ask them the following questions before agreeing to a collaboration:

  • Can you show me your business license?
  • What are your fees?
  • Do you offer free product sourcing quotes?
  • Can you help me with product development?
  • How and when will you charge me (payment dynamics)?
  • Are you an individual agent or a registered China sourcing company?
  • What additional services do you offer (private labeling, white labeling, product development, branding, order fulfillment, warehousing, etc.)?
  • Do you offer dropshipping services (if needed)?
  • Do you have warehouses close to my customers?
  • What types of products can you source?
  • Do you perform factory audits and quality inspections?
  • What’s your order turnaround time?
  • What types of shipments do you offer?
  • Can you ship to my FBA or other 3PL warehouses?
  • Can you show me some customer references?
  • What customer service options do you offer?
  • How can I reach you?
  • What’s your MOQ?
  • How to start working with you?

These are some of the general questions every importer should cover. However, feel free to add more to the list according to the specific product you’re ordering. Make sure to ask everything in advance and have all answers in writing. 

What Should I Ask a Chinese Sourcing Agent

What Mistakes to Avoid When Sourcing from China?

When sourcing from China alone or with the help of an agent, avoid these common pitfalls:

  • Working with an unverified individual instead of a China sourcing company
  • Paying before you even get a quote
  • Not checking a supplier or a sourcing agent’s background or forgetting to ask for customer references
  • Working with unreliable suppliers who lack communication and transparency
  • Working with sourcing agents that are paid by factories or manufacturers
  • Trying to do it all by yourself without any experience in international trade
  • Not ordering a sample before placing a bulk order
  • Not giving detailed product specifications or giving vague explanations
What Mistakes to Avoid When Sourcing from China

How to Minimize the Risks When Sourcing from China?

To minimize your risks when sourcing from China and avoid scams, follow these best practices:

  • Work with a trustworthy sourcing agent that has a good reputation.
  • Always check customer reviews, ratings, and testimonials.
  • Ask to see the sourcing agent’s business or trading license.
  • Ask for the sourcing company’s physical address.
  • Don’t pay bulk orders fully upfront.
  • Always order a sample first.
  • Give clear product specifications and be as detailed as possible.
  • Don’t forget that you can always negotiate prices.
  • Calculate all expenses in your budget, not just the base product price (shipping, insurance, customs clearance, duty, taxes, etc.).
  • Compare multiple supplier or sourcing offers to get a feeling of the real value.
  • Always perform quality inspections on bulk orders.
  • Communicate in writing to have proof in case of any problems (regardless if you’re sourcing from an agent or directly from Chinese suppliers).
  • Ask to see customer references or testimonials.
  • Use verified and trackable ways of payment (PayPal, bank transfer) instead of Western Union and similar services.

Where Can I Find a Reliable Sourcing Agent in Yiwu?

Yiwu Market, in Zhejiang, China, is the world’s largest small commodity market. So, it’s no wonder that many dropshippers and retailers want a piece of that pie. Here are some good ways to find and vet Yiwu sourcing agents:

Search on Google

The first thing you could do is Google for “best sourcing agent in Yiwu” or “reliable Yiwu sourcing agent”. Check the results you get and research the background and credentials of all agents before agreeing to work with them. 

Visit Yiwu Market

Yiwu International Trade City, otherwise known as Yiwu Market, is said to be the largest small commodities market in the world. Naturally, the best way to experience it is to visit it. However, not everyone will have the possibility to do so. 

If you have a sourcing agent able to buy products from Yiwu Market, you won’t need to visit in person. 

Visit Yiwu Market

Community Forums and Groups

Next, you could try joining social media groups and community forums where other eCommerce owners exchange experiences. Word of mouth and customer references are great ways to ensure the validity and trustworthiness of an agent. 

Freelance Websites

If you don’t mind working with individual agents, you could head over to Upwork or Fiverr and look for Yiwu agents there. 

Freelance marketplaces typically have public reviews and customer satisfaction rates, so it should be pretty easy to vet agents on their skills. 

NicheDropshipping

Last but not least, you could get in touch with Niche. We’re a local China sourcing agent and can buy from Yiwu as well as B2B marketplaces like Alibaba or 1688. 

We’re a full-service company and want you to experience working with us without any upfront risks. That’s why we offer a free sourcing quote with zero obligations. 

Niche Dropshipping

To Wrap Up

Hopefully, we’ve managed to show you what it means to work with a Chinese sourcing agent. Ultimately, they can save you a lot of time, streamline your supply chain and fulfillment, and help you focus on sales and growth. 

If after everything you read, you still want to source products from China on your own, remember to adjust your expectations. It’s possible, but it definitely won’t be easy. 

For those of you that want to work with a sourcing agent but are afraid to start, get in touch and ask for a free quote! We offer a free sourcing service, allowing you to start working with a China sourcing agent risk-free and with zero obligations. 

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