Another China Sourcing Agent Post

[Kit26]

Just to be clear. I have spent considerable time searching this forum and the internet in general on this topic but I still feel there are questions I would like to ask.

At present I am working with two suppliers I have built good relationships with in China our business dealings have been great. However it took an awful lot of time to find them!

I have now however decided to invest heavily in my company, as such, I need to find more suppliers for various lines of 'off the shelf' automotive products. So all products that are already being manufactured. I'm of the belief that money spent paying an agent will be money well spent.

Furthermore, as I require various lines of products, which may come from various factories/suppliers, I believe the ability to consolidate, through a sourcing agent/company, would likely pay for the sourcing agent/company anyway.

So I've got this far, sourcing agent - tick.

Now the issue is to find a sourcing agent that has a knowledge of the industry (auto parts), the ability to consolidate consignments, and (most crucially) is happy/able/cost effective at sourcing multiple parts for multiple applications.

Just to elaborate on my concern/query. I am after a sourcing agent that will be able to find for example 5-10 different items for 5-10 different vehicles. Likely we are talking about small MOQs of 20-50 and overall total orders in the region of $5,000-10,000. Is this a realistic prospect, or am I hoping for too much?

Thanks

 

[Maple Sourcing]

In your case, I'd suggest you fly to China and visit one or two automotive parts wholesale markets, at there, you can personally check the quality, buy samples and compare quality/price to different suppliers.

Pls keep in mind that two products look same may perform hugely different, so, do not always pursue cheap prices.

If you worry that it's uneasy to communicate with the people at wholesale market (actually, they know simple English and can easily show prices to you on calculator or write on catalog), you may find a sourcing agent near the wholesale market.

I'm a sourcing agent myself, but not involved in automotive parts industry. But I may provide some advices if you plan a China visit, such as where to land in, and how to arrange domestic trips, etc.

 

[MOIC]

As above, fly to China, but visit an Auto Fair.

I would not advise buying from a wholesale market, as in effect you are buying from wholesalers who have little control of the quality of the products they sell. Repeat orders may well be from different factories, have different specifications and quality standards.

With automotive products, you have to be careful with IPR. The vast majority of vendors in the wholesale markets will have little knowledge of whether they are infringing branded products.

Can you ask your 2 current suppliers to point you in the right direction for the products you want to purchase?

 

[GraemeL]

I am after a sourcing agent that will be able to find for example 5-10 different items for 5-10 different vehicles. Likely we are talking about small MOQs of 20-50 and overall total orders in the region of $5,000-10,000. Is this a realistic prospect, or am I hoping for too much?

The feedback and advice above from Aaron and Ron is spot on and you are right to use an agent.

Here's my twopenneth.

If you are looking at OEM type product such as brake discs, cylinders and so on then the chance of you finding anyone who is a reputable maker of these for MOQ's of 20-50 per sku is slim to zero, using an agent or not. As you will be well aware, these products are made in long runs using specialised machinery.

I suspect an agent would turn your proposal down on the basis its a dead end, or else seek an up front fee.

On the other hand, if you are seeking more generic items such as leather steering wheel covers or warning triangles, you may well have success at a market.

And by the way, this:-

"Furthermore, as I require various lines of products, which may come from various factories/suppliers, I believe the ability to consolidate, through a sourcing agent/company, would likely pay for the sourcing agent/company anyway."

is easier said than done.

Good luck with the venture.

(You might find that a visit to China opens your eyes to opportunities you are not currently thinking about)

 

[joernicks]

On average, how many fly transport costs are there?

 

[MOIC]

@GraemeL is correct.

 

[Maple Sourcing]

In last 5 years, I've visited Yiwu market, Foshan furniture market and Seg Plaza electronics market many times. Yes, Ron is right, there are many wholesalers who do not actually run the manufacturing facility (they often tell you their relatives run the factories, sometimes true, most times not true). However, we should not jump to conclusion too quickly.

1) Nowadays, many decent factories would open wholesale shops at main wholesale markets. Usually, those shops are on upper floors as the rent is a lot cheaper there, so they could open a bigger shop. If you dig deeper, you would be able to find out the real factories. Basically, if they put their factory name and contact on the window and on name-card, the address is in an industrial zone, and warmly welcome you to visit them, there's big chance that it's a real factory. Also, a factory usually only makes products in the same one or two categories, very different from traders. For example, if you find air pump, lifter, repair kit, safety chairs all in one shop, I bet it's a trader, per common sense, it is not possible to produce such different products all at one factory.

2) I would not simply turn down wholesalers. Sometimes, the specific products are only made by a few big factories which are not interested in taking small orders, so, working with wholesalers is the only practical way. For example, even you find out a 1000-worker decent factory, your order of 200 pcs will probably be refused.

3) It may take time and lessons, but per my experience, we did find out some excellent suppliers at each of the 3 wholesale markets mentioned above, and we worked with them for quite a few years with good quality and service.

 

[MOIC]

In reply to Aaron's good post above, there is a fundamental difference between the 3 markets mentioned and in particular, wholesale markets for car parts, which are the following:

1. Yiwu Market: This was set up (mainly) to supply 'small orders'. The overwhelming amount of traders cater for India, South America, Africa & Middle East countries, where the quality is not the main focus of attention, but the price. Products that require certification will not be available and many that are offered will either not be genuine or related to a different product. The after sales service is non-existent. This has been my experience in visiting Yiwu Market for the past 10 years. They have not improved, rather they focus on the customers who's first priority is price, not the quality of the product.

2. Foshan Furniture Market: This is a huge market and again a worthwhile experience if you are looking for furniture in small quantities. However, for small quantities you will struggle to obtain the correct furniture regulations (UKFR) to satisfy UK regulations. The genuine factories will require a minimum order of 1 container (normal 1 x 40HQ) in order to change any of the materials to adhere to UKFR. They will also restrict the amount of designs you can order to be loaded in one container, normally limiting to 3 or 4 models. Of course there are always a few factories that are eager to get your orders and will promise you the earth, however, China factories are not set up to supply the 'smaller' customer (buying less than one full container).

3. Seg Plaza Electronics Market: You can find an abundant amount of suppliers of all technology products in this market, as well as the surrounding areas. The problem with buying electronics in markets and in small quantities, is that you will be buying 'from stock' and accordingly the certificates required to sell in EU will be lacking. Again, after sales service in these markets (if you have problems with the products you buy) will rarely result in replacements or recourse, as the sellers attitude is 'you have bought as seen', which for electronics is foolhardy, as you cannot see and check the inside of technology products. You can find genuine factories at this market, but they do not cater for a 'small' buyer that will require full certification with the product . . . . .unless you buy in large quantities.

In summary, it really depends on the product you want to purchase and for car parts (where many factories flout IPR), its not advisable to buy from wholesale market suppliers where products need to have certification.

Ideally, you need to visit the cities/provinces where these products are made.

The best way to appreciate the above, is to visit China and see with your own eyes whats good, what's bad and ultimately what suits your business.

There are now millions (literally) of Chines sellers, individual, wholesalers and even factories themselves that sell in all the global marketplaces, that buying and competing with them is becoming increasingly more difficult.

The answer is to have your own brand, offer your own individual service and try to stand out from the mainstream of China suppliers.

But for that you need to buy in quantity . . . . . . . .

 

[Kit26]

Hi All

Many, many thanks for your informative responses. It's really so good that people are able to offer to much of their knowledge and information.

It seems a visit to China will be the way forward. Having friends in Hong Kong, this is not really a big issue as I do visit anyway, save for actually finding the time to be away from my business!

In the interim I think working with a good trader is probably my best choice. They have already done all the sourcing and will be able to consolidate a considerable amount of items.

Thanks

 

[MOIC]

Some further advice, given you may/will visit China . . . .

1. Go with someone who understands your products and can guide you to the correct locations.

2. Before placing any orders, take all the information that you have digested from your trip and ensure you make a list of all your requirements and this has been verified with each supplier you want to work with.

3. Arrange a sample and ensure that any problems/changes/amendments are counter sampled and approved, before placing an order.

4. Ensure that the Pro Forma Invoice covers in detail all your requirements, including (but not limited to):

a. Product photos
b. Full specifications of each product
c. Individual product packaging
d. Master carton packing
e. Branding
f. Certification
g. Payment terms
h. Shipping terms
I. Delivery schedule
j. Warranty

5. Have an independent company carry out a quality control inspection with each factory, for at least the first 2 orders. (If it's economically viable have an inspection with each order).

6. If you are involved with products related to colour shades and natural materials, accept the fact that there will always be colour tolerances to adhere to and that samples sent for confirmation will always have a tolerance level during production.

Enjoy your trip!