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A Sourcing Company can be an invaluable partner when importing products from China. Or, they can be a useless middleman that offers nothing but delays and higher unit prices.
This is not a regulated industry, so anyone can claim qualifications to manage product and supplier sourcing.
In this article, you will learn what a sourcing company can do for you – and how much you should expect to pay them.
In addition, we also list some of the leading sourcing companies in Mainland China and Hong Kong S.A.R.
Why should I work with a Sourcing Company?
The core function of a sourcing company is to identify qualified suppliers, based on the customer’s needs and technical requirements.
There are no industry standards for how the supplier sourcing process is managed. Some Sourcing Companies have a more relationship-based approach, funneling customers to their existing supplier network.
This can be a win-win for both you and the sourcing companies, assuming they select suppliers based on the product’s technical specifications – rather than the size of the kickbacks they receive.
I’d say that most sourcing companies put kickbacks before selecting the supplier that is the most qualified to make a certain product.
Most sourcing companies can do a lot more than just, well, sourcing products.
For example, some can help you with factory audits, quality inspections, contracts, quality assurance and day to day administration.
As said, there are no set industry standards, so you need to discuss this with your Sourcing Company.
How do sourcing companies charge for their services?
Previously, most sourcing companies charged a commission based on the order value. However, in recent years, more and more sourcing companies have adopted fixed pricing.
Thus, they charge based on a per project or service basis, rather than a commission.
Of course, the final cost depends on what exactly you want the sourcing company to do for you. Continue Reading →