• Thu. Apr 25th, 2024

Difference Between A Sourcing Agent and A Distributor 

ByDorothy Randall

Dec 7, 2022

One of the unpredictable tasks in business operations is the procurement of goods. There are too many uncertainties involved in the process and not every facet of the process can be monitored with proper diligence. Besides that, it is only the procurement process where the expected outcomes do not meet the expectations of the person. 

This makes the procurement process from the low-cost markets a risky job. One of the practices adopted to mitigate the risk factor is hiring a Product sourcing agent who does the groundwork for you. Today, China is the second biggest economy in the world bested only by the USA. The share of chia in the global GDP is 16%. China’s growth is stupendous when compared with what it was in 2001.

In 2001, the Chinese economy was merely a 1.3 trillion dollar economy and today, it is a giant with a 15.5 trillion dollar economy. This growth is due to the optimum utilization of Chinese manpower by the Chinese government. The Chinese leaders produced a conducive environment for the proper utilization of the human resources of the nation. 

China, today, is the go-to nation for industries which are labour intensive such as the production of textiles, furniture, toys, etc. the major reason why china has grown into such a huge marketplace and supplier of the world is that today, china is offering a large amount of skilled and unskilled labour at very low costs. The labours provided by china are good for all types of industries. 

Besides that, the infrastructure provided by china is superior to any of the infrastructure facilities provided by other nations in the world. This has made the nation of china the world factory. The confluence of all of these factors is that a robust factory structure is built and exports are increased by a large amount. 

Today, the muscle power of china has risen so much that it even engaged in a trade war with the then USA in 2020. China has flaunted its exporting abilities time and again and has proven its mettle to the world. However, there is always an apprehension in the minds of western businessmen when dealing with Chinese producers directly. 

This is especially the case when these manufacturers are new in the business. Chinese markets are very different from the local markets. If you have no experience in dealing in such markets, then you should seek some guidance lest you will feel lost or worst, you will be dumped. The best option in front of you is to engage a Product sourcing agent

A Product sourcing agent can make your experience in Chinese markets very convenient and profitable. The Product sourcing agent is a local professional. He is fluent in Mandarin and is professionally proficient in English. This is a great relief when you get to know that all the suppliers in Chinese markets speak only mandarin. 

You will get stuck in the language barrier only if you do not engage a Product sourcing agent. This professional will act as the channel of communication between you and the manufacturer. He will further help you in shortlisting, finding and finalizing the right supplier for your manufacturing priorities. This agent can either be an agent or a company. 

When required, the Product sourcing agent will do the groundwork. He will be your alibi in Chinese markets. He will also make sure that the products manufactured are of the required quality. He will do all the heavy lifting for you including the negotiation of prices, production management and the supervision of the payments. 

He will further take care of the deliveries and the logistics involved. Thus, he is your shadow in China that will perform all the tasks that you are expected to execute. If you are still confused about whether you need a Product sourcing agent or not, here are a few tips that you need to get such an agent:

1- That you have little to no experience in sourcing and importing products from China.

2- That you need a large number of goods. 

3- That you require multiple products to be sourced. 

If you pick the right sourcing agent, then you can relax, but the task of picking up the agent is in itself very challenging. Here are a few pointers that you must keep in mind:

1- A good souring agent has his presence in China either in the form of his team or in person.

2- A good sourcing agent is expected to have great communication skills. This helps them to understand and deliver the messages to both parties.

3- The sourcing agent must be fluent in English and Mandarin.

4- He must have a prior experience as a sourcing agent.

5- The sourcing agent that you choose must have expertise in the products that you deal in. This will enable them to understand the requirements more clearly and you will get better results.

6- The sourcing agent must have his office close to yours. This will make them accessible to you at a short notice. This will be beneficial, especially in cases of emergency and special needs.

7- Ask for referrals when you choose the sourcing agent for your business. These referrals will be a testament to previous customer satisfaction and a promise that the work in your business will be executed with equal commitment. A good agent will be more than happy to give you the referrals of previous customers. He will not hesitate in giving you the referrals.

8- Understand how the agent gets paid because it is important to avoid any misunderstanding in future. Besides that, the agent must not receive any cut or share in the profit from the factory because that will cause a dent in the independence and unbiasedness of the agent.

Conclusion

Your Product sourcing agent will help you get the properly licensed manufacturer with all the certificates required. This is a risk-mitigating factor. This is to assure that the factory to which you have paid a handsome sum of money does not get shut down the very next day when it starts its operations.