Business & Finance

All That You Wanted to Know About Procurement Agents in China

Procurement Agents in China

China has now emerged as a global source of several industrial products. The language barrier is the first issue that foreign business owners encounter while dealing with a Chinese company. So, it has become necessary to hire a certain Chinese-speaking procurement agent, who has an office in China.

No doubt the purchasing agency in China is very important for any business company or the trading company of the Western countries. Many of the companies in the west may not be sufficiently aware of how this sourcing agent can really be useful to them.

Therefore, in this post, we shall discuss the various roles that any procurement agent in China can play in the growth of your business in your own country.

What is a Chinese sourcing agent?

A certain Chinese sourcing agent can be defined as a person or a company located in China whom you can hire to find any product/products that are needed for your business.  If you select any product then the sourcing agent and his team will work on behalf of your company to search for a Chinese company that can produce those products.

In addition to that, the sourcing agent can also help and support you with the following few things, which may be very difficult for you due to language issues in China.

  • Price negotiation
  • Necessary follow-ups
  • Quality control
  • Testing
  • Compliance
  • Logistics
  • Shipping
  • Any other service that you may require

Today, China is producing anything that you name. They have also developed excellent infrastructure and a huge production capacity. They have got huge manpower, who are well qualified and trained. Because of this reason, the labour charges in China are very cheap and no other country can beat China. Therefore, you can get the products at an unbelievable price.

However, there are very few people in China who can speak English properly. Most of the businesses dealings are done in their own language and hence many such Chinese sourcing agents have opened their purchasing agency to offer support to any foreign businesses.

These procurement agents were proven to be very essential, particularly during the recent COVID-19 pandemic periods, and they helped to keep the supply chains running as most of the buyers from different countries were unable to visit Chinese suppliers.

However, all purchasing agents may differ in their terms of expertise, methodology, transparency, and pricing.

Sourcing agent or agency

Most people often tend to think of a certain sourcing agent or an agency as the same entity. For most purposes, this may be true.  However, both these are two distinct concepts and it is necessary to understand how they differ from one another

A sourcing agency exactly is what it sounds like. It is a certain group of employees who work together in the organization but has distinct duties. Each person is responsible for a certain duty, such as sourcing, warehousing, quality control, logistics, and shipping. Usually, they have a lot of freedom when it comes to locating manufacturers, and they frequently assist multiple customers.

The sourcing agent can be a certain individual who can be hired on a full-time basis, for helping you with your desired products. Actually, the agent is a misnomer, because there can always be a few groups of people working within a small office.

A few of these agents can also have considerable experience in trading or with any Chinese sourcing companies. 

Let us try to answer a few questions that most of you may be thinking about a purchasing agency.

1. What is the best way to find any purchasing agents in China?

By simply doing a Google search you can get the list of many such purchasing agents.

2. How can I decide whether the purchasing agent will be trustworthy?

They can explain their methodology and how they maintain the quality of their supply. You can, however, cannot expect them to manage everything if the agent is working as an individual.

3. How can I hire any purchasing agent on a full-time basis in China?

You have to hire a certain company that has got an office located in China that has got a set of employees. There is nothing like a recruitment agency in China.

4. Can I find any freelance purchasing agents located in China?

Upwork.com and a few other websites can offer you information about freelance purchasing agents. They can offer limited support in some specific areas only.

5. What questions should I ask any purchasing agent?

You must ask the following few questions to your purchasing agents:

  1. Whether you have past experience with any of our product categories?
  2. What is your methodology for supplier sourcing?
  3. Criteria based sourcing
  4. Relationship-based sourcing
  5. Network-based sourcing
  6. What is the revenue model of your business?
  7. Fixed-rate
  8. Commission
  9. Kickbacks
  10. Which parts of our process can you help in managing?
  11. Product development
  12. Sample management
  13. Sourcing
  14. Order management
  15. Lab testing
  16. Quality inspections
  17. Shipping to destination

6. What is the basic difference between a purchasing agent and a sourcing agent?

A purchasing agent’s traditional responsibilities include arranging purchases, handling follow-ups, and controlling shipping. Whereas sourcing agents help their clients find new suppliers. Product development, quality control, as well as logistics, may all be handled through sourcing agents.

As such, in Asia, there is no distinction between any sourcing agents and purchasing agents.

What services can you expect from any sourcing agents?

Your sourcing agent will help you to find the manufacturer that will most closely meet your requirements of the specific product design. 

  1. You will generate your product design.
  2. You will share your design or idea with your purchasing agency.
  3. The agent will find 5 to 10 manufacturers that can meet your specifications, also ensure that the companies are compliant with all the necessary laws.
  4. You will select a manufacturer of your choice from the list given to you.
  5. The sourcing agent can act as your buyer and facilitate all necessary communication that may take place between the manufacturer and you.
  6. The products will arrive at a certain specific location as agreed, and you receive your product.

Step 5 above is the most important one and let us discuss it here. The following procedures will be followed by your purchasing agent during the production of your product:

  • Communication with the manufacturer
  • Price negotiation
  • Coordinate production
  • Regularly checking production status
  • Sample checking for quality
  • Necessary updates
  • Storing and packaging while preparing for their shipping
  • Shipping
  • Necessary paperwork

All these services are broadly common for the purchasing agency. However, based on your product, you can either add or delete any additional services.

Featured Image: Warehouse worker photo created by aleksandarlittlewolf – www.freepik.com

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