China has emerged as one of the global centres for low-cost country sourcing, a development that entails obtaining goods and/or raw materials from developing nations at competitive prices. While many organisations conduct this type of product procurement independently, many others are unable to.
Businesses, especially small and medium-sized ones, frequently lack the financial means to invest in sourcing goods from low-cost nations. In such a situation, they contact Chinese product sourcing agencies or procurement agents.
However, what precisely does a Chinese procurement agent do? And how might a person like that help your company expand?
The role of your procurement agent
Simply said, a sourcing agent finds goods and supplies for companies at reasonable pricing. Their objective is to help the companies they partner with reduce their production costs.
A sourcing agent may own a business that employs several agents and works with several businesses at once, or they may work independently with one business at a time.
The following characteristics of a reliable procurement agent in China are expected:
- Good knowledge and experience of manufacturing hubs in their home country
- Well-versed in several languages and also excellent communication skills
- Excellent coordination skills
- Awareness of various compliance rules and regulations
After outsourcing their services to China, the majority of business owners need assistance. At that point, a procurement agent’s job becomes important. The agent, who will be working on the front lines in China, will be seen as the company owner’s right hand and a reliable ally.
However, anyone can claim the designation of “procurement agent”—whether they are a genuine, competent agent or a fraud. The owner is entirely responsible for making a thoughtful choice when selecting an agent because a poor choice could cost him much more than the service price.
However, using a China procurement agent can benefit your company. Prior to that, you should be aware of a few qualities a Chinese sourcing agent should have.
Why do you require a purchasing agent?
A purchasing agent is a firm employee or a freelancer who assists businesses in importing products and goods from international markets.
Every business seeking to outsource services to China should employ a purchasing agent since they can assist the owner with the following:
- Find new and relevant products and their suppliers
- Manage negotiations and draft agreements
- Manage logistics and shipping
- Audit the existing supplies
- Perform quality control as well as factory inspections
Dealing with Chinese vendors might take a lot of time. If an owner decides to work directly with Chinese suppliers without the use of an agency, there are a number of difficulties that he may encounter.
These include linguistic difficulties, a potential lack of market knowledge, potential difficulties in negotiations, and a host of other things. Additionally, locating the ideal provider is a challenge that necessitates a well-thought-out plan.
These tactics will be aggressively followed by the sourcing representatives in China, who will be able to identify qualified manufacturers and screen out unreliable suppliers thanks to their years of expertise. The information necessary to identify the ideal source is something the Chinese procurement agent possesses.
The products that are imported from other countries must adhere to safety rules. Importing goods that don’t meet legal requirements is against the law, and these goods can only lead to legal action or a forced recall if they cause harm to someone.
The majority of Chinese suppliers offer goods that don’t meet international standards. Many of them don’t even understand why adhering to the demands of foreign purchasers is so crucial. There are many other factors besides just that one.
Many suppliers lack necessary knowledge to comply with market safety rules for products. You run the risk of being held accountable if the products do not meet the necessary requirements if you work with such agents.
As a result, you should only work with China sourcing agents from reputable organisation who have a track record of satisfied clients.
Another critical aspect that you should search for is the area of product expertise. This completely depends on the thing you are purchasing if you are importing goods from China. While some things are very easy to obtain, others are a little more difficult.
As a result, you should request buyer references and case studies for prior orders from the Chinese agency you plan to use.
Even if it becomes challenging to locate a Chinese agent with expertise in a particular niche product, you can find out if the agent is competent by asking for a buyer reference from a related business.
Hiring a purchase and procurement agent with the right skills will eventually mean the difference between a disastrous company process and a successful one.
The sourcing practises and organisations are the third crucial element you should pay attention to. You must understand that while locating a source is simple, choosing the best, most qualified supplier requires significant effort.
This necessitates a carefully thought-out sourcing strategy and a capable procurement agent. A knowledgeable agent will understand the client’s certification requirements and product specifications and will approach them in a straightforward manner.
An agent will always attempt to include these requirements first. Even if sourcing agencies in China operate in various ways, the typical procurement process flow should resemble this in some way:
- Supplier sourcing
- Initial price negotiations
- Selection of final supplier
- Choosing the qualified supplier
- Quality and production control
- Sales agreement
- Qualified suppliers audit
- Confirmation of product specification and certification requirements
- Sample order
This brings up the location, which is the next crucial consideration. A well-versed purchasing agent must, at least, have an office in a Chinese metropolis, including Hong Kong, and an entity in a registered firm.
A more qualified procurement agency would also have a presence in China in addition to your country.
The downsides of choosing a foreign country for your purchasing needs include linguistic and communication issues. But when you decide to engage with a reputable sourcing firm, these factors become simple to manage.
You will be hiring Chinese procurement agents, and they must be fluent in their native tongue. Trying to communicate with a foreign supplier who speaks a different language is surely difficult and hard. Maintaining strong business relationships is more likely when there is clear communication.
Hiring a China procurement agent may help you experience numerous valuable services that can successfully ease the purchasing process, whether you want to buy items on a small or large scale.