Using a sourcing agent or sourcing yourself. What are the pros and cons?

Stephen Choi

Using a sourcing agent or sourcing yourself. What are the pros and cons?

I don't have lot of experience in the sourcing game.

For our members that are looking to source products in China, I would love to hear some wisdom from our more experienced members on why a buyer should use a sourcing agent or go down the road of finding a supplier on their own.

posted over 1 year ago

Paul Baylis		Hi all, we are china-buy.com - a sourcing/procurement/QC agency specialising in construction and decoration. We've been involved in many projects including high-end New York construction projects - Trump Soho, 75 Wall, Trump Ocean Club and more. Our clients use our services for the simple reason that they had a lot on the line (often their house!) and every container needed to be perfect. Often they didn't see the product themselves, but it was shipped directly to its end-used location to be fitted immediately by contractors. The importers simply did not need any issues whatsoever. You simply cannot completely trust in Chinese factories having your best interests at heart. Often, they don't care if they lose your business after the first order. All too often, with the pressures of lead times, things get rushed out the door with little or no QC. It's a time bomb. Mostly, we get clients who are sick and tired of receiving inconsistent product quality - perhaps a resonable batch of product in the first container, then a load of rubbish in the second. There are too many dynamics in a typical Chinese factory for them to be trusted completely. It only takes the sudden loss of a key spray painter for quality to take a sudden dive. Or perhaps the factory has won a contract to supply the local government and suddenly they have no time for your project. If you are serious about your business, it is imperative, in my view, to have someone in the face of the manufacture on a daily basis. posted 5 months ago

Tony Tan		I happen to be a sourcing agent to the subject. I would like to share my experience in this field. There are three major factors that allow us to add value to the supply chain, instead of cost. The first is trust. It's much easier to build trust with one agent than with a few manufacturers. And since we (the agent) only work with a handful of customers, trust is really THE ONLY product we are building and sure is the last thing we (agent) will ruin. The second factor is communication efficiency. I am based out of North Amercia and my sourcing team is in Guangzhou, which enables us to work around the clock for our customers, thus making the cycle of communication much more efficient. The third is the cost factor. Last but not least, it is always our customers' major concern that our (agent's) work would inevitably add more cost to the product. It's true that buying prices will likely higher than buying direct from manufacturers, but when it comes to long term landed cost, we always have the advantage. It's hard to have a clear cut comparison, but the fact that our customers are able to offer competitive products to the market can substantiate the claim. Some big companies build sourcing office in China in order to tap into the huge sourcing opportunities. There are some success stories as well as failures. Principle-agent issue is one of the hidden traps causing those failures. While using an agent, you have cut-and-dry cost breakdowns, and could expect much better service than your own employees. I guess many of you would agree on this. With these said, the choice still largely hinges on the company's view of its own core competencies and its culture as well. Some companies would tend to focus 99% on frontline such as marketing and sales, while outsource the sourcing and supply function to an agent, which is what I would call "a vertical disintegration", and some would prefer to keep most critical functions under its tight control, which is more in line with traditional vertical operations. posted 11 months ago

Gope Earthling		thanks again Carey for link posted 12 months ago

Carey Chambers		In the past I noticed a lack of good, centralized China sourcing information but China Sourcing Information Center has stepped up and filled that void. I like what they're doing over there. They're providing good info and I'm sure it's helping their business as well. http://chinasourcinginfo.org/ posted about 1 year ago

Carey Chambers		David Alexander, President of Baysource Global, just submitted an article to our blog that relates to this discussion. The article is called "Best Way to Conduct Manufacturing Outsourcing in China". Here's the link: http://www.dragonbn.com/articles/102 posted about 1 year ago

David Tutelman		As a buyer who could not always be on the ground in China, I agree with Tim. For an important or large order, spending a little extra money to make sure your order meets expectations is better than receiving a container of bad product. posted over 1 year ago

Stephen Choi		Thanks Tim. Can you give our members an idea what is the best way to work with a sourcing agent? Also, can you talk about how sourcing agents charge for their fees? I think it would be of intersest to many of our members. posted over 1 year ago

Tim Johnson		I might be biased but I feel that, for a buy of any significant size or importance, you need a sourcing agent, unless you are on the ground in China and have some sourcing experience. For small buys, sure, you can do it yourself via Alibaba and take your chances. But in most cases I suggest, at a minimum, using a supplier qualification services like this one offered at Sofeast: http://www.sofeast.com/qualification In short, if there is any significant money on the line, or the order is important to you in terms of on-time delivery or quality, use an agent. posted over 1 year ago

Using a sourcing agent or sourcing yourself. What are the pros and cons?

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