Sample this … In 2019, the USA imported goods from China worth $451.7 billion. This is pretty much a representation of how much other countries import from China.
The robust Chinese manufacturing sector has made the country a powerhouse. Manufacturing agricultural machinery, generator sets, fashion, appliances, tech items, and furniture.
If you wish to start importing goods from China to your country, you have to find an agency for your business. A local or Chinese agent is your business partner.
Instead of traveling to China to source goods, you can trust your agency to find what you need at the best prices. This saves you both time and money.
But first, how do you find the best agency for your business or in China? Keep reading!
9 vital tips for finding the right agency for your business at local or in China
Scammers are everywhere in the agency business. Thus, you need to be very keen on which agency you work with. To reiterate, your agency is like your business partner on the ground. They help you meet your business needs at fair prices.
Here nine pointers to help you get the right agency:
Compare a few of the top agencies side-by-side There is a simple way to compare agencies in or outside China side-by-side. Ask for quotations from three or four such agencies.
If one agency charges a meager price, avoid them. They could be getting kickbacks from the factory. If one charge is too high, avoid them since they could affect your profit margins.
Also, a good agency leaves room for negotiating. For example, if their commission is 8%, they should drop to at least 6% or 6.5%.
1. Look at the portfolio of the agency
Before you choose an agency, you need to do a thorough background check on them.
Ask to see the other business that the agency works with or has worked with in the past. Also, you can check the years that they have been in business.
Once you know the other businesses that the sourcing agency works with, you need to get in touch with them. Find out whether the agency serves their needs well.
Businesses using the same agency can give you unbiased information. They will tell you of their actual experience with the agency.
If the businesses have used the same agency for many years, you can go along with that agency.
2. Agency in or outside China?
You can choose to work with agencies in or outside China. It makes no difference if they charge the same prices.
Before you choose a local agency, make sure they have a strong presence in Mainland China. Make sure that they have an operational office there with multilingual staff.
The main benefit of doing business with a foreign agency is that there is no language barrier. It is hard to communicate with Chinese agencies that don’t have multilingual support.
There are some benefits to choosing a Chinese agency. For instance, they can help you navigate through the paperwork faster. You need to know how to communicate with them to overcome the language barrier.
Strict internet policing in China makes it hard to do a background check on Chinese agencies. Thus, you might want to work with a local agent.
3. The type of agency
There are three main types of agencies to collaborate with within or out of China. They are as follows:
a) Single sourcing agencies
These are small enterprises, which do not take too many clients at a single time. Thus, it is easy to create a personal relationship with them, enhancing how they take care of your needs.
If you are starting out importing from China, you could work with such an agency. If you are well established, you will need a more central agency with more extensive networks.
A sourcing agency has many connections. They have hundreds of sourcing agents under their wing.
These agents specialize in different areas of expertise. For instance, one sourcing agent might deal with farm machinery. Another one deals with fashion and another one with household appliances.
It is easy to do background checks for sourcing agencies. Because of their extensive networks, they can find the things you need.
c) Sourcing and logistic agencies
These are big companies. They will not only look for what you need from China, but they will also arrange the shipping for you.
There are so many benefits of dealing with such companies. First, they will do a quality check on your products to always get what you ordered.
, they arrange the shipping of items to a warehouse that is closest to you. If you like, they can also deliver your items to your place of business.
4. Knowledge of the product that you sell
It could be hard to get an agency that deals with one type of product, but there is no harm in trying. Find out whether the agency you want to work with has expertise in the development you want to import.
To know this critical bit of information, you should ask for references. Check whether they help other companies import the same products. If they do, work with them.
5. Charges and Commissions
You should find out how else the agency makes. It’s money apart from charging you for services that they provide.
Some charge a flat rate commission for finding the things you want to import. Usually, flat rate commissions are within the range of 1 to 10% of the factory-buying price. They will collect their fee when you are paying the supplier.
Does your agency charge a low commission? They could be getting kickbacks from the manufacturers. If yes, they might not get you high-quality goods.
Even if they are not getting a kickback, negotiate for the best rate possible. For example, a commission of 4.5% is better than 7%.
Some agencies also charge a blind markup price. You will never know how much the goods cost at the factory because the agency plays the role of the middleman.
They source the goods that you need, and then they add their margin. Thus, you pay them, and then they pay the supplier/factory.
Some agencies get their fee from the factory. In such a case, it can be risky since you may not know whether you are getting goods of the best quality. If the agency receives a commission from the factory. They can influence you to buy low-quality goods.
You could ask them to tell you the factories that they buy from. If they do, find out whether the manufacturers provide goods of excellent quality.
Such agencies are better than the ones that charge a blind markup price. With the latter, you never know where the goods are coming from.
6. Ensure the agency gives the proper documentation
Until you get the proper documentation from your agency, you still do not own the goods. These include:
· List of items
· Bill of lading (a legal document for the type of goods, destination, and owner)
· Certificate of origin
· Fumigation certificate
These documents are essential since you will use them to release your goods from your port. Check them to ensure they are for the goods that you ordered.
If you decide to work with a Chinese agency, you should find one that has multilingual support. The most crucial combination would be Mandarin and English.
You will exchange written documents. Thus, make sure the agency has a customer service team fluent in spoken and written English.
8. Quality Assurance
The agency charges you a fee to do all the sourcing work in China. Thus, make it clear that you will only accept goods that meet the quality that you ordered.
They should clarify whether the money you pay stays in escrow until you verify the quality of the goods. If the goods do not meet the request you ordered, there should be a replacement or refund of your money.
Before you pick any one agency in China or for your business, do your own due diligence. Do not pick the first agency that pops on number one in Google.
Go deeper! Find out what other business people say about them. There’ll be a mix of positive and negative reviews. If the negative reviews are too many, you should avoid that agency.
Finally, agree on the payment method and the currency to use. Also, get everything in writing, including what to do if you receive goods of inferior quality.