Common Mistakes When Choosing a Sourcing Agent
Business owners who are in the planning stages of opening a business often make mistakes when choosing a sourcing agent for the procurement of products. Whether the business is a specialty company, an E commerce site, or a large retailer, products have to come from somewhere. Currently approximately eighty percent of all products sold on the global market come from China. It is a major sourcing country that supplies products for all types of industries. Business owners can get maximum benefit from sourcing products from low-cost suppliers.
Mistakes are common when attempting to broker deals, establish connections, and work out logistics. One mistake is assuming processes are the same in China as they are in the United States. Quality, materials, and standards differ greatly from supplier to supplier. It is wise to have more than one supplier for products to ensure quantity and be sure demands can be met on time. The laws and culture are also drastically different. It can be confusing to navigate all the aspects of sourcing. One way for business to ensure they will be getting what they want, and what they expect, is to hire a sourcing agent.
An agent will be familiar with the laws, have connections already in place, and understand the culture. It is crucial to find a sourcing agent with experience. There are independent sourcing agents, and then there are consultants and agents who work for companies. Selecting a company to navigate the process for the business is more cost-effective, and can ensure all aspects of the process are complete, legal, and designed to benefit the business.
One component, for example, that many owners handle incorrectly in shipping costs. In an effort to save money, owners forgo asking for sample products, they tend not to send out prototypes, and they settle for, what they believe to be, the cheaper shipping option for product deliveries. There are two basic options are Cost Insurance and Freight (CIF) and Free On Board (FOB). FOB costs are shared between the supplier and the business. That means some expense for the business, but it also means some control over the carrier. Dependable shipping is paramount to meeting customer demands.