What is a Sourcing Agent?
A sourcing agent, also known as a procurement agency, is a service provider who locates manufacturers in foreign markets. Due to the high number of suppliers, this is mostly the Chinese market. A purchasing agent usually also takes on quality control by checking manufacturers on site.
How a procurement agency can help you
Would you like to know why companies frequently use procurement agencies? Or would you like to find out why Amazon FBA entrepreneurs and procurement agencies also use Alibaba as an alternative? We would like to inform you in the current blog about the advantages of using our services as a purchasing agency.
The most important information at a glance:
Procurement agencies can search for more extensive and detailed searches
The risk of fraud is significantly reduced
Supplier relationships can be maintained more easily
These and many other points will be picked up in the course of this block!
The Alibaba alternative
A common way of procurement in the Chinese market is to find a supplier via trading platforms. Since C-parts suppliers can usually be found in Chinese markets, typical purchasing usually comes across the Alibaba platform. However, the use of this platform can be problematic – especially for inexperienced users.
In the first instance, wholesalers like to pose as suppliers. By means of website presence and workshop images, they try to pretend that they are producing the products directly. This is problematic in that wholesalers add hidden margins, which can be avoided. A procurement agent also has margins, but these are visible, negotiable and not permanent, which is why such a service can be a real alternative.
One point that is addressed in the said video is that manufacturers can only react very slowly to customer requests. Do you have individual needs for your product or does it have a certain technical complexity? Maybe specialized machines are also needed? If you answer yes to these questions, a supplier will find it very difficult to respond to these points and will only offer you the product, if at all, at increased costs.
In short: a procurement agent can react to your individual wishes, which saves you time, money and, definitely, nerves.
Cover supplier bottlenecks
As the corona crisis has shown us, supplier bottlenecks can arise spontaneously and in large numbers. A good example of this would be the electronics industry, which had to fear for its entire supply chain. Good supplier management can reduce such a risk, but many companies do not have the time and resources to carry out such planning continuously. If a supplier were to fail in such a case, a procurement agency can help to find a new supplier quickly in order to guarantee the supply chain. Paul Sourcing has already performed such a service many times. In our article on Link Chemie AG , we report on the search for a manufacturer for a pump attachment.
Procurement agencies protect against fraudsters
Unfortunately, fraud is common when it comes to shopping. Most of the meshes either work on the payment system itself or on quality management. For example, instead of solar systems, a manufacturing industry may only receive electronic scrap without being able to check it in advance. A procurement agency helps prevent this. With the help of staff close to the supplier, loads can be checked before they are shipped. Upon request, an employee of the procurement agency can also record the sampling, which provides additional security.
The problem with the language barrier
Unfortunately, it is ubiquitous that communication with suppliers can be tedious. Various manufacturers also have a sales department that is equipped with a basic knowledge of English, but important details that only come up again when the contract is signed can be lost. A procurement agency can get around this by using employees who speak the Chinese language.
A procurement agency is advantageous in cases in which a simple, commercially available product does not meet the requirements. Carrying out a supplier search yourself can save money, but it costs time and nerves, and a procurement agency can help. Furthermore, delivery bottlenecks can also be avoided with the help of a clever selection of suppliers.