How shall we get sourcing right in China?
The answer is you can gain cost advantages when you source quality assured components or finished goods mostly in China.
Although the opportunity is certainly enticing, it can be hard to get the many pieces of a procurement operation in China right when you are not very familiar with Chinese market. Finding high-quality suppliers and negotiating agreements with them is a problem that companies face in any new locale, but the greater geographic distance between suppliers in China and your company makes the job tougher for companies based in the location far from China. Then too there are issues—such as sorting out logistics, securing reliable broadband connections, and cultural and language differences—that companies rarely face at home.
In this case, engaging a sourcing & procurement agent and third party inspection company is neccessary for your benefits. Through this tailor made services, the additional mitigation team can help you mitigate risk to ensure your target meet.
A sourcing agent assists a company with the process of locating sources for products and supplies at low prices so the company can save money on production. Sourcing agents may represent a single employer or could run a business that serves a number of companies. The work can require knowledge of multiple languages as well as a good business sense and coordination skills. Pay typically occurs on a commission basis, where the sourcing agent makes a percentage of the order’s value.
A company can use a sourcing agent to get the best prices. Sourcing agents have connections with local companies and know where to find various supplies. They can negotiate with a prospective supplier and may be able to work out discounts and other deals that the company does not have time to negotiate on its own. This can save the company money and may also create a longstanding and valuable contract for the supplier, so both sides have an incentive to work with a sourcing agent.
Companies may also have an interest in an international sourcing agent. In this case, they rely on the agent to local companies they can work with overseas. The sourcing agent’s job includes assessing the needs of the company, locating suppliers, and meeting them to see if they will be able to take on the orders. They can inspect factories to confirm that they will be able to meet standards. This can also include evaluations to address ethical concerns like worries about pollution or exploitative labor conditions.
The international sourcing agent can also deal with issues like import and export duties, tariffs, and taxes. These can be challenging for companies not familiar with the regulation in a given nation to handle. The agent’s skills can cut down on expenses and also move goods through shipment more quickly, with less risk of a holdup at some point along the supply chain. In regions where corruption can complicate business negotiations, a local sourcing agent familiar with the community and the traditions can cut through red tape quickly and efficiently.
