Mike Genung, founder of Global Trade Specialists, has over 25 years of experience as a China sourcing agent.
Over his career as a sourcing agent Mike has helped hundreds of companies source their products from Chinese manufacturing companies.
In this article Mike has shared his expert insight on what you need to understand as you decide whether hiring a professional China sourcing agent is the right move for your business.
China Sourcing Agent Article Contents:
Options for Sourcing Products from China without a Sourcing Agent
There are several ways you can try to find a reliable manufacturer in China for your products:
1. On your own through a Chinese eCommerce website
This is fraught with risk because, in spite of how much those sites proclaim they filter out “the bad eggs,” it’s impossible for them to check them all. Unless you’re meeting with them face to face, you have no way of knowing if the entity on the other end is a trading company, factory, or a guy in his apartment who’s out to take your money and run. A trading company may not have a good factory available and may just be fishing for customers. Or you could be talking to a factory without the capability to make your product as needed.
Over the years, we’ve encountered all three of the above scenarios when sourcing product for our customers. We’ve also had customers tell us they traded emails with a vendor from an e-commerce site who then disappeared. We’ve heard stories of where they were the victim of a “hit and run,” where the Chinese vendor vanished after money was sent. One customer told me he paid a 100% deposit, then the Chinese vendor disappeared.
2. Look for Chinese Manufacturers on Google
The problem with this approach is that:
- There are many factories in China who don’t have a website.
- Some factories in China who do have an online presence are only written only in Chinese, or, if they’re in English, are crude and won’t give you a true impression of their capabilities.
- Some websites are a scam. One website we looked at was professionally made and well written in English. When our partner company in China went to visit the “company,” their building turned out to be an apartment complex.
- As with the e-commerce sites, it can be difficult to tell if you’re working with a first class factory, a small factory with limited equipment and capabilities, a trading company or a scam artist.
3. Go to a trade show
This is a hit or miss proposition at best, and again, you won’t know if the Chinese vendor can do what they promise until later. Years ago I gave an Asian supplier I met at a trade show a chance at quoting an order. Their booth was professionally done, and their personnel spoke good English. First impressions are a big deal in Western countries so I thought it would be worth giving them a try.
The experience was a nightmare. After they submitted their quote, which was competitive, the customer signaled they were ready to place an order. I asked the supplier to confirm their prices once more to make sure there were no issues – and they doubled the prices of both the parts and tooling.
Here’s the bottom line: In a country of more than 1.3 billion like China, where Eastern culture and thinking are vastly different than that of Western Culture, corruption is a problem, and, they’re looser with their laws and enforcement than we are, the only way to know if you’re dealing with a viable source is to meet them face to face.
Finding a trustworthy, qualified factory requires knowledge of the business culture, the potholes to avoid, and how and where to look for find a good factory.
The Advantages of Using a Professional China Sourcing Agent
A professional China Sourcing Agent resolves all the problems noted above, and more. Sourcing agents have spent years traveling to China, learned the business culture, and, most importantly, built solid relationships. The Chinese call these influential relationships guanxi, and they’re critical to getting business done there.
In the process of looking for a factory in China, many forget that business is a two way street. Just as you’re evaluating the manufacturer in China for their capabilities and trustworthiness, so they are taking a look at you to determine if they want to do business with you. How you present yourself, your company, and your project to them can be just as important as how they present themselves to you.
For example, if a prospective importer presents a set of incomplete drawings or a rough prototype to a factory in China for a quote, the manufacturer may decide they don’t want to the quote the business because the customer either isn’t ready for manufacturing, or they don’t appear like they know what they’re doing. Production factories also don’t want to get involved in prototype and design, so this could scare them away too.
An experienced, professional sourcing agent will look at your project before submitting it to a quote to China. If your drawings or prototype isn’t production ready, they will work with you to get them right to avoid problems in the future. Our U.S.-based engineer can look at your product and help you create drawings and prototypes that factory in China needs to manufacture it. This saves you the hassle of trying to find an engineer and prototype company on your own.
A professional sourcing agent is also connected with experienced, knowledge China based business partners who can locate the best factory for your product, negotiate prices, inspect the orders, and make the shipments. We have known the president of two of our trading partners since 1993; they are skilled, honest, and reliable businesspersons with decades of experience in manufacturing.
If anything goes wrong (which, we work hard to avoid), they will insure that any defective product is replaced. Without the guanxi a China sourcing agent provides, the chances of the factory disappearing, should there be a problem with defective product, ratchet up considerably.
How to Avoid Hiring An Amateur China Sourcing Agent
Not all China sourcing agents are the same. As our customers have told us, it’s not always easy to find one who’s still in business since they first contacted them. Before making a decision of which sourcing agent to go with, look at how long they’ve been in business; if they’ve been going for 10 years or more it probably means they have long term customers who are happy with their service (we’ve been in business since 1991).
How often do they go to China? Do they have Chinese boots on the ground? If so, in what city? Most of China’s industrial base if located on the East Coast. We have three partner companies we work with in China; in the northeast, the east, and the southeast, which gives us access to the key industrial areas of the country.
Do they have a written replacement policy in place so you know what will happen should something go wrong? (We do).
Do they have a nationwide network of customs brokers who can clear the shipments for you should you need one? Can they walk you through the import process? (We do on both counts).
What products do they specialize in, and is their experience a good fit for what you need? Do they only work with a few factories, which they represent, which means they’re limited in the suppliers they can offer, or is their approach to try to find the best factory for your product? (Which is what we do).
Speaking of products…
Products that are a good fit for Sourcing from China (and those that aren’t)
The products that are a best fit for sourcing from China are those with more labor. For example, buying a low value, low labor cost item like a cardboard box alone won’t work. You’d be better off buying a cardboard box from a domestic supplier.
The higher the labor cost and value of the product, the more competitive the prices are from China. Machined parts, forgings, medical products, plastic injection molded parts, products with multiple parts that require assembly, electronics, clothing, sporting goods, and most consumer and industrial items are a great fit for sourcing from China, as are many more.
Our company offers you engineering, prototyping, decades of experience in product development and manufacturing, and the guanxi needed to put it all together. Contact us today so we can get started on your project.
Fees for Hiring a Reputable China Sourcing Agent
All prices we quote (including tooling or mold costs) do not include our commission (10%), which is invoiced separately, U.S. customs duty, inland freight from the port of entry, ddc/port fees or custom’s broker’s fees. All shipments are made direct from China to you; prices are quoted in U.S. dollars. Please see Importing Info for more information.
We work with a customs broker with a nationwide network and can provide you with a referral so you can obtain the other import costs upon request.
To hire Global Trade Specialists as your China sourcing agent, the minimum order value, not including tooling costs is $10,000.00
- Mold or tooling costs – 50% to be wire transferred to China with the PO.
- Balance of the mold/tooling costs is due after sample approval.
- Production parts – 30% deposit by wire transfer after sample approval. Balance when the order is packed and ready to ship from China.
We need a purchase order, subject to sample approval, for the molds and the minimum production run quantity. You are not obligated to proceed with the production run until after approval of the sample.
Our assumption is that you have fully engineered, prototyped, and tested your product, and that all drawings or samples provided to us are final and a complete representation of the product as you want it made. Production factories in China do not do engineering and design work; you will need to have completed this process before going to production. Once the molds and/or tooling are made, any further changes will result in rework charges that are the responsibility of the customer.
We offer optional 3rd party inspection services in China for $350.00 for one man to perform a 5-6 hour inspection and provide a written report, complete with pictures. For first time orders for a new product, we highly recommend this. If the report results do not meet the written parameters you provided us prior to production, you have the option of requesting that the shipment is returned to the factory for rework/replacement.
We have not performed a patent or trademark search on your product line; all issues related to patent / trademark infringement are the responsibility of the customer.
Please note that the U.S. government requires that all products imported be marked with “made in China”; there are different requirements for each product. You will need to provide us with instructions as to how you want your product marked with the country of origin. More information on this is provided in the Importing Info document.
**All orders are subject to our Warranty / Defective Product Replacement Policy.
Ready to get started? Contact us now to speak with a qualified China sourcing agent.