The fact that the term “sourcing” is often misused, or that a “sourcing company” is more than enough mistaken for a trading company is common knowledge within our industry. Clients may ask us what does a sourcing agent do, some others may ask us to explain the differences with a trading company, and so on….
Well, the time has come to provide our readers with a comprehensive answer about what a sourcing company in China does, differences with a trading company, and advantages of dealing with a sourcing agency when buying from China.
What does a sourcing company do?
In a nutshell, it implements a comprehensive set of procurement practices, aimed at finding, evaluating and engaging suppliers for purchasing goods. Naturally, a Chinese sourcing company will gather a team including profiles from each profession (namely, purchasing, management, quality, logistics …) proficient in local and foreign languages.
The involvement of a sourcing team is similar to a trading company since it is involved in each step of the order, as described below :
|Product sourcing||Order monitoring||Quality Control||Logistics||After-delivery|
What is the difference with a reseller or trading agent?
The core differences are as follow :
|Chinese Trading Companies||Chinese Sourcing Companies|
|Offer :||Sells goods||Sells services|
|Specialization :||Industry specific||Processes specific|
|Main interest :||Factory’s||Client’s|
|Focus :||Sales||Cost vs Risk vs Quality|
Which advantages does a sourcing company in Shanghai bring?
|Local presence :||nothing compares to having a trusting party ready to act locally at any time.>|
|Time efficiency :||communication and business habits are decoded and made easy. A knowledgeable and honed professional with real language skills equals hours saved.|
|Access to prices :||a seasoned sourcing agent will give you access to his network of factories, potentially allowing better purchasing prices and terms.|
|Quality-wise:||sourcing agencies in China usually have a better understanding of foreign quality standards and regulations.|
Who really needs a sourcing company in Asia?
- SMEs that are putting all efforts on sales and marketing but lack in terms of purchasing and quality.
- Buyers involved in dealings spanning various industries, who need to deal with a certain number of factories and traders.
- Groups and brands which operations are more complex, such as product pooling and repacking.
- All companies involved in niche markets, adamant to ensure a tight control over production, quality management as well as brand and design protection.