The Cost of a China Sourcing Agent: Understanding the Fees
China sourcing agents assist international sellers at every stage of the procurement process. From finding the best manufacturer and quality control to export, sourcing agents are the best eyes and ears when working with China facilities. China sourcing agents drive the sourcing process from start to finish on behalf of your company. Sourcing agents look for the best manufacturer based on your individual product needs. Sourcing agents can also coordinate agreements with China-based companies.
The result of having a sourcing agent is invaluable for many businesses, but some sellers do not fully understand what they are paying for with an agent. It is important to understand what China sourcing agents do and what fees are associated. If the following apply to your business needs, a sourcing agent could be right for you.
- You need to manufacture a bulk order
- You cannot be in China during the manufacturing process
- You need assistance with logistics and communication with the manufacturing
- Your product is niche or has unique specifications
What fees are associated with a sourcing agent?
Just like any business, sourcing agents can range in size, structure, and fee. Depending on your specific requirements and goals, you may need to collaborate with a larger firm or be able to make do with a small one. The sourcing agent fees will also be based on your product needs.
- Will you need repeat orders?
- Are you manufacturing one or multiple products?
- How much inventory do you need?
One-time support
Typically, sourcing agents with a one-time fee is associated with finding a manufacturer. The fee is charged regardless of the specifics of your order. This fee will be for researching potential suppliers. The research includes reviewing licenses and communicating with the supplier. The sourcing agent will also verify that the supplier is local and is a manufacturer, not a trade company. The sourcing agent will also translate your product needs to the supplier to make they can produce. Once you have approved the sourcing agent recommendation from the sourcing agent, they turn over further business relationship management to you, the buyer. This leaves the responsibility of the supply chain to you and the manufacturer.
Ongoing assistance
With ongoing assistance, the sourcing agent will continue to collaborate with the supplier after they have been approved. They will maintain the relationship management. The sourcing agent will be responsible for conducting quality control and resolving any challenges with shipping or production.
How sourcing agents get paid
There are two main ways that sourcing agents get paid. They will have a flat fee or work on a commission structure. Some sourcing agents will charge a flat fee which will be based on a certain period or a per-product basis. The commission structure is based on the value of the product. The usual commission structure for a China sourcing agent is 5%-10%. The structure will depend largely on the cost of your product and the size of your order.
The ability to work with a sourcing agent in the way that best works for your business could make it an attractive option. If you are looking for a sourcing partner or want to learn more about how China sourcing agents work, contact us at Global Manufacturing and Sales
