Recently updated on April 15th, 2021 at 03:00 am
Many companies and startups start to source products from China via China purchasing agents. Using intermediary is like a double-edge sword. Even though tomes have been writing about the pros and cons of China sourcing company, we’ll focus on the dark secrets of China sourcing offices and give solutions to how to find reliable China import agents.
Dark sides of China buying agents
- Hidden commission
It’s a public secret that many sourcing agents in China take black kickbacks from suppliers, which means they become allies. They wouldn’t push the suppliers for the best prices, and in case there are some quality issues or delays in delivery, they would turn blind eyes to it. Related: China Sourcing Agent Fees: Commission Based or Fixed Cost?
Solutions:
*Sign a contract with your China buying agent, stating clearly black commissions are not allowed.
*Contact some other suppliers and check whether the price given by your sourcing agent is good or not.
*Pay reasonable service fee to your sourcing agent.
Low price is the premier attraction for most people buying from China. However, the price increases a lot in recent years and lots of buyers are only keen on low prices or free service. To be ahead of the game, some buying agents in China charge as low as 1% of total buying amount. Considering all the other factors such as small buying amount, complicated OEM orders, distances of different suppliers, dishonest of Chinese suppliers…a tedious and scary process…they would have to pay their own money if they don’t take hidden commissions.
The best way is to do a market research about the cost of life/salary in the city you source from, and discuss with your sourcing agent how much work involve and agree on a reasonable rate both of you are satisfied without the temptation of black commissions. Find a reliable China buying agent and grow up together.
- Relation-based sourcing
If they have connections who may know a China manufacturing company of the product you are looking for, chances are they would be chosen over other suppliers. It’s a relation-based selection rather than competency-based.
- Being secretary rather than expert
Most sourcing companies in China tend to act more like secretaries than experts. However, it depends on whether you are sourcing goods requiring strong expertise. Sometimes it can take months or years to understand the mechanism of a specific item especially electronics. A qualified China buying agent should be a product expert so they know roughly the costs, how to carry out quality control, etc.
That’s why some big companies only hire sourcing experts with strong background and enriching experience, which helps a lot in product research, turning ideas into reality, price negotiation, quality control, etc.
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