Introduction
One of the initial steps in starting any dropshipping or e-commerce business is to source products. We have already discussed the dropshipping business model and how to start dropshipping. Whether you are new to dropshipping or have been operating in the business for some time, sourcing is an activity that is integral to the success of your business.
In this article, you will discover all there is to know about product sourcing procedures and be able to choose the ideal option for your online business. We will also examine sourcing from China, and investigate whether sourcing from China is advantageous for companies. In addition, you will learn how to source products and engage sourcing agents in China.
Table of Contents
- Sourcing from China
- Why Source from China?
- What is a Sourcing agent?
- Why you need a sourcing agent?
- What do Sourcing agents do?
- How to find sourcing agents?
- Benefits and Shortfalls of Sourcing agents
- Tips for working with sourcing agents
- Final Words
Sourcing from China
Product sourcing/sourcing refers to the entire procedure of finding manufacturers or suppliers, getting in touch with them, finding out about the quality of their goods, negotiating a price, and building a business relationship.
Many specialists in the field of procurement favor China sourcing. This is because it is the nation that sells the most manufactured items worldwide. Due to its robust and sizable industrial sectors, China is frequently referred to as the “factory of the world.” Because Chinese goods are so inexpensive in comparison to those from other nations, dropshipping from China is definitely worthwhile. Dropshippers can maintain a high-profit margin because of this.
The advantages of sourcing your goods from China are numerous. However, it could take some time to look for the ideal source, bargain, and get a good deal. Finding a supplier or doing business with one can be difficult for most suppliers, and this is especially true when the given product does not meet the criteria and is of low quality.
Understanding the Chinese market and interacting with providers require a lot of knowledge, so you need all the assistance you can get.
Why Source from China?
The best course of action for a business looking to cut expenses when purchasing goods is to source from China. China provides inexpensive supplies, which is why it is a popular destination for product sourcing. There are however some challenges that you may source when sourcing from China, such as language barriers and different business practices.
When this occurs, foreign purchasers often turn to a Chinese sourcing agent or agency for assistance. By doing this, they no longer have to personally negotiate with Chinese suppliers or manufacturers, making their business more efficient.
Some of the reasons for sourcing from China are given below:
- Variety of suppliers: China is renowned for having a diverse range of businesses operating in many different cities. It is one of the biggest nations with a lot of producers. As a result, you can select from a variety of suppliers to get the most value for your money. In the same way, if you want to have your product created, you can choose from a variety of manufacturers.
- Low cost of labor: One of the elements affecting a product’s selling price is labor costs. Given that China has the largest population in the world, cheap labor is frequently available. Cheap skilled labor can be obtained via sourcing from China. You do not need to worry about the money you have spent while you are away. Everything will be handled for you by the sourcing agent or agency that you hired.
- Reasonable Product Quality: There is a misconception that Chinese goods are so flimsy that they do not last for very long. This is the cause of the widespread perception that Chinese goods are of low quality. But this couldn’t be further from the truth. Numerous experts have already discovered numerous China-based suppliers of high-quality goods. The vendors will provide the organization with materials of the anticipated quality for a fair price.
China is the main source of goods on a worldwide scale. There is practically no limit to what you can buy from China, right from electronics, clothing, accessories, household items, and so on. The majority of factories and product producers are in China; therefore, if you run an internet store, this is your best chance. But how do you navigate the huge Chinese markets to source your products, with all of the challenges and complexities involved?
This is where you need sourcing agents.
What is a Sourcing agent/agency?
A sourcing agent is a third party that helps you find the right supplier. A sourcing agent communicates and negotiates with suppliers, oversees production, provides updates, performs quality inspections, and arranges storage and shipping.
A product sourcing agent is a person or business that searches for the kinds of products you require on your behalf. Typically, these agents will purchase the goods from manufacturers in the nation in which they reside or are physically present.
On a larger and more organized scale, a product sourcing company is in charge of performing similar duties to a product sourcing agent. A product-sourcing business typically employs a number of sourcing agents. For safety reasons, it is always preferable to work with a sourcing agent who is an employee of a sourcing organization. A lot of product sourcing agents are independent contractors, which reduces their reliability and stability.
Why do you need a sourcing agent?
As a dropshipping business that wants to source products from China efficiently,you need a sourcing agency. The following are some advantages of using a sourcing agent:
- They are situated in the supplier’s country of origin
- They are able to find new and reliable suppliers
- They can monitor the process and guarantee the quality of the product
- You save both time and money
- They are accountable for making sure the supplier/manufacturing is legitimate
- The whole dropshipping service, which includes storage, packaging, delivery, etc., can be provided by several sourcing agents
- Timely order fulfillment and superior customer service
- Product sourcing firms frequently offer an entirely automated procedure and integrations with your online store
- You are open to a wider range of manufacturers and suppliers
What do Sourcing agents do?
A product sourcing agent is responsible for conducting product research and finding manufacturers, wholesalers, or suppliers of the goods you need. They are in charge of determining the optimal price-to-quality ratio and making sure the product meets the standards for quality. Among the responsibilities of a product sourcing agent are finding suppliers, contacting them, negotiating costs, evaluating product quality, setting up storage and shipping, and filling orders.
- A good sourcing agent/agency will handle the following for you:
- Locating the best products at the most affordable pricing
- Package with white label and private label
- Examining the product’s quality
- Putting your goods in their storage facilities
- Addressing order fulfillment
- Excellent customer service
How to find sourcing agents
Finding the ideal product sourcing agent might be challenging at first, especially if you’re dropshipping from a nation where you’re not from and don’t have much familiarity with the market. For a start, make sure the sourcing agency you choose has warehouses both in China and the USA. The amount of time it takes to transport goods to US customers will be greatly reduced if you store inventory at a warehouse there.
Before you set out to select a sourcing agent, consider the following inquiries for yourself:
- Does the product sourcing agency have a business license?
- Do they provide comprehensive dropshipping services (storage, quality assurance, packing, order fulfillment, logistics, etc.) or just sourcing services?
- Does the product sourcing agent speak the same language as your suppliers, and are they nearby in terms of language and geography?
- Do they have a sizable supplier network?
- Have they already sourced goods for your dropshipping niches?
- Are the fees and prices upfront and transparent?
- Can they send you product samples?
- Do they offer private labeling services?
- Can they be reached and verified on the internet and on social media?
To find sourcing agents, you must carry out comprehensive research on the internet, shortlist a few, visit their websites, and read reviews of their operations. Other popular directories for sourcing agents, manufacturers, and suppliers include Alibaba, AliExpress, Made in China.com, and 1688.com. A lot of sourcing agents can be found on these websites, along with their contact information. You, however, need to be careful and verify the agents before continuing with them.
All reliable sourcing businesses will share the following three characteristics:
- They will be present and able to source from China (where production is far less expensive)
- They will have a warehouse in the United States (while shipping to the United States can be a little more expensive, it will undoubtedly be faster there)
- They’ll provide a comprehensive dropshipping solution rather than just product sourcing
In summary, define what you need, set your budget, choose the right sourcing agent; research and compare, get different offers, negotiate, and document your agreement.
Benefits of Sourcing Agents
- You can exploit the extensive network and experience that sourcing agents in China have.
- You can benefit from sourcing agents’ expertise in bargaining while speaking with the supplier.
- Your business will be able to overcome the language barrier
- Decreased shipping costs and guaranteed quality
- Allows you to focus on other areas of the business
- They take off the burden of sourcing
- It saves time
Shortfalls of Sourcing Agents
- There is a significant chance of the sourcing agent receiving concealed commissions.
- The interactions with suppliers are more under the supervision of sourcing agents.
- Without informing you, sourcing agents could swap suppliers if they stand to gain more.
- The sourcing agent controls the relationship with the supplier, and once the agent is lost, the supplier is also lost
- They can switch suppliers midway, causing changes in quality
- They can mark up the cost of your goods
Tips for working with sourcing agents
- Look for the right and verifiable sourcing agents: Finding the appropriate sourcing agent is the first step in any sourcing process. Find the best vendors who are aware of all your wants and specifications. You also must request the suppliers’ credentials in order to verify their legitimacy. The business must also consider the supplier’s background and experience in product sourcing. You must also confirm if the sourcing agent can provide the right range of items. You may also check reviews of other customers who have patronized the sourcing agents.
- Request for Samples: You must request a sample of each item before placing an order. You can decide whether or not to place an order based on the samples that you will examine. The samples will let you know if it meets the standards and quality that you have in mind.
- Communication: Have a steady communication channel with the sourcing agent
Final Words
Sourcing from China could be a hurdle due to a number of challenges, but with the help of the right sourcing agents, you can skip all the heavy lifting and focus on your selling. We advise you to contact a sourcing agency that knows the terrain of the Chinese market, so you can be safe from the pitfalls involved in sourcing.
We are a sourcing agent agency with order fulfillment capacity. We offer tailor-made services you’re your business whether you are a small business, a dropshipping business, a Shopify seller, or an Amazon FBA seller.
We are reliable as we have an extensive network of suppliers and manufacturers to source for your desired products. In addition to sourcing services, we also provide Sampling, Warehousing, Quality Control services, Flexible Shipping methods, Customs clearing, and Support services for your business. You can check out other services available to you.
