The existence of traders and sourcing agents is due to the fact that there are numerous manufacturers who vary in export ability, global market understanding, national business performance and foreign language skills, etc. The global market requires a role to bridge the gap between international buyers and manufacturers. However, while there are countless buyers (wittingly or unknowingly) dealing with trading companies, some buyers, especially those with specific technical requirements, prefer to hire a local sourcing agent. Why do they go from dealers to sourcing agents or sometimes not even deal directly with a manufacturer?
1. Better control
With a good sourcing agent, the buyer’s interests are fully enacted in a very controlled manner. First, with someone digging deep into the factories, the buyer has better control of production, delivery, and after-sales service, and can ensure that all tracking information he receives is true and verified. Second, and more importantly, the sourcing agent may jointly or independently find out supplier information and negotiate with suppliers without any motivation to win an order or sell a particular product. Therefore, the buyer is more likely to find a more suitable product, since it is not confused by exaggerated or even false descriptions of the trader or manufacturer.
2. Authentic evaluation and audit
A sourcing agent can provide the buyer with complete information on registration details, official documents, latest photos, and written reports about the factory, including offices, production lines, warehouses, quality control station, equipment laboratory, etc. to access the qualifications, credibility and production of the factory. technical skills and experience. But merchants can send any data to the buyer or even claim that they are a manufacturer of any product, while the fact remains that they may not be technically sound or have sufficient production capacity.
3. Easier communication
A good sourcing agent is a person with fluency and understanding of English, general technical knowledge, business assessment, logistics, product design, and a global perspective. You can perfectly work on behalf of the buyer to access suppliers, negotiate price and terms, troubleshoot, follow up on orders, coordinate in urgent times and ultimately improve the business relationship with the supplier.
4. Cost savings
First of all, sourcing agents or representatives usually work in a smaller team or just work alone, while trading companies work in larger offices with multiple departments. The result is that the expenses charged by the latter are much heavier. However, a more important reason is the conflict of interest between the merchant and the buyer, the merchant will never share the manufacturer’s information (contact, original price) with the buyers for fear that the buyer will bypass the merchant and deal directly with the original provider. In all cases, the merchant settles with the buyers with a higher, hidden margin, while the sourcing agent works for the buyer with clearly stated service fees. Coupled with the expense factor, the price the buyer could get from a dealer is much higher than the fees he must pay to a sourcing agent.