Is it best to use a sourcing agent or ' go alone ' when buying from china

[funkygolddog]

So I have found my product I wish to sell to UK market and got a sample from alibaba, have spent literally hours trying to find the right supplier for me - alibaba just seems to be full of middle men trying to make a bit from dropshipping and by the time I have factored in the cost of product, shipping taxes plus selling fees ( ebay etc) it really doesn't seem worth while .The couple of companies I have found have such large MOQ's which I don't have the funds for and haven't responded to my emails anyway but I also want to test the market with a smaller quantity first to check the product is a good seller - The longer view would be to create my own brand - do I bite the bullet and use some of my working capital to use a sourcing agent who can help me find the right supplier or do I pay a much higher price and use a dropshipper...? I have also been looking at companies like The Import House.. does anyone have any direct experience with them, Thank you in advance for any replies

 

[Lentinus]

Lots of sourcing agents will be along in a minute to tell you you do. There is a barber's forum where you can ask if you need a haircut too!

Not sure an agent will be able to address the core issue which is the closer you get to the manufacturer the larger the MOQ Price going up as quantity drops is a fact of life.

Personally I would accept the fact that the first sales are going to be a slim to zero margin and look at that as cost of entry. You will know quite quickly if the product will sell.

If it sells well you should be confident to commit to quantity and raise some funds. An agent would likely be a good investment at that point. If it doesn’t shift you have not lost much and will have gained experience.

HTH

 

[GraemeL]

Can you afford to lose the cost of the products, plus freight, of your order? That's the risk you are taking when importing from China.

If you can, go alone. If you cannot, use an Agent or Trading House. I buy container loads from China and I do not go direct. My aim is to reduce risk at all stages.

G

 

[Mike Jenkins]

I'm interested in your comments. We have always felt that companies should own there supply chains. By this we mean directly purchase from the supplier. Our method introduces as or as little controls as the client likes. We ideally specify and contract a clients order , but the consignment is low risk we can simply offer a QC check. Problems with agents are well documented an certainly cause many people a lot of quality issues

We are different in that we are an official partner company of the Chinese Import Export Group of companies, Owned wholly by the Beijing Government and we hold a unique territorial agreement with a number of the sub companies. In effect this gives us direct access to over 180 government employed inspectors. There role is to QC goods , but possibly more important, they support the export drive of the Import Export Group. The key here is that is design to support export. Good staff , accurate reports , low cost. A government job is important and no one wants to lose theses. The consequence is that the inspectors offer and excellent level of reporting and honesty . I'm sure people who have had inspections and then find the bulk different understand my meaning here.

Whilst our primary business is management of overseas companies business , we are increasingly assisting in initial and one off purchases from China, or simply offering QC and fault rectification.

Buying from China, still offers fantastic opportunity , but unfortunately we spend a lot of time talking to people that do not do this successfully. Be careful, if you cant afford to do it properly don't do it, this is my advice. Checking and contracting adds little to the total cost. Feel free to contact me if you need anymore information . I hope my thoughts are useful
UK Office +44 1162 633918

 

[Directimport]

Lots of sourcing agents will be along in a minute to tell you you do. There is a barber's forum where you can ask if you need a haircut too!

This is one of the pithiest and apropos answers I have seen on this subject.

My answer is not without bias either, because I have a very firm opinion on the subject, having taught hundreds of people, mostly newbies, how to safely source and import from China.

With a lifetime of experience in shipping, exporting, and importing, I know the ropes and since retiring I have kept my brain active by teaching others.

Alibaba has a huge listing of suppliers, a large number of whom are masquerading as manufacturers. Those traders will never give you the best price because they are buying from real manufacturers and adding their margin.

There are safe sourcing sites (not Alibaba) where what you see is what you get. If a supplier is listed as a manufacturer, that is what they are. When dealing with traders you will find that they tend to be much more inflexible on MOQs than the manufacturers are.

It is possible to negotiate small orders regardless of MOQs provided you take the right approach.

Newbies often find that suppliers don't respond to them. That is because the newbies tend to ask newbie questions.

Here are a few hints on how to get suppliers to respond:

• Don't mention that you are new to the business.
• Don't tell them you are a sole trader.
• Don't offer your business plan like you would to a supplier in the USA.
• Don't ask what is their MOQ. They will tell you soon enough. That is when you might start working on them to supply a lot less.
• Don't offer your tax or business registration details.
• Don't ask for samples early in your communications with them, and don't expect them to be free.
• Don't haggle. Most "experts" will tell you to do so, but there are good reasons why you should not and I teach why you don't need to. This issue is even more critical in the early stages. If you try to talk the price down early on you will suddenly find no more emails arrive.

There are a few things you should say:

• Tell them you are an established importer.
• Tell them quality is important to you.
• Ask them for a copy of their catalog, preferably a printed version.
• Give them your business name. Don't have one? Invent one.

 

[Mike Jenkins]

We prefer a less of a finger in the air approach . Check the legal status , check the export licence, verify the bank details , check the government tax records. Audit the site , Check the production.
Its difficult as a start up . Whilst I don't fully agree with "Direct Imports" comments if full, I very much agree with the point on haggling. China has little in base quality level and therefore you can only discuss price once you have agreed quality. Buy what you want in terms of volume, not what you think you need , I'm still surprised how little price varies between full loads and pallet quantities

Some simple checks can save fortunes. Avoid high risk product areas!

 

[Directimport]

We prefer a less of a finger in the air approach . Check the legal status , check the export licence, verify the bank details , check the government tax records. Audit the site , Check the production.
Its difficult as a start up . Whilst I don't fully agree with "Direct Imports" comments if full, I very much agree with the point on haggling. China has little in base quality level and therefore you can only discuss price once you have agreed quality. Buy what you want in terms of volume, not what you think you need , I'm still surprised how little price varies between full loads and pallet quantities

Some simple checks can save fortunes. Avoid high risk product areas!

There is nothing "finger in the air" about the approach I teach. I explain how to do the necessary checks oneself, or how to use those rare B2B sites that actually do genuine and thorough verification processes.

Yes, simple checks and precautions can save a fortune.

I quite agree about the small price variation for different quantities, and I have previously posted on that subject on the forum.

The success of my methods is evident in the fact that of the many hundreds that I have taught safe sourcing and importing, only one has reported being scammed.

He admitted that he did three things that I strongly advise against:

• He sourced through Alibaba and finished up dealing with a trader while thinking he was dealing with a manufacturer.
• He ordered a large quantity before doing all the necessary procedures that should lead up to that.
• He paid via Western Union.

My methods are a result of many years of practical experience, including 22 years operating a franchise network in 4 countries importing and marketing goods from a number of countries including China. None of my franchisees ever suffered at the hands of scammers. They all followed my instructions. (No option as franchisees.)

 

[Mike Jenkins]

China is very much a changing country and certainly frauds that we have seen have been far from simple, multi containers in some cases, sophisticated and complex. Even so I still think that base checks offer value. For example factory audit , QC and supervised loading. Certainly for high risk items these step's still present a degree of risk.

Know who you are dealing as far as possible, visit the trade fairs, and if you travel take a translator. Canton Fair is 10 billion dollar business for the Chinese Government . There are a number of check in place to qualify companies allowed to exhibit. This is a good starting point

Shop on the internet at your own risk! No one ever seems to talk about the "40 thieves"

We pick up many clients after they have often lost money or bought something that they are not happy with. When you drill into these problems, the vast majority can be associated to poor purchasing technique, no specification, simply an item in the post to check, followed by a payment for $30,000 etc. Crazy !

I don't personally believe there is a sure fired method of purchasing without risk , the game is simply managing the risk, this sadly cost's money. Often people buying from overseas simply believe that the cost of product is what they pay + shipping and duties. Equally many of these never make a second purchase.

Our method is clearly different from yours, equally we benefit from legal representation and use this to our clients advantage . Courts is China are strong , setting a clear path of how to access the law is the difficulty.

 

[Directimport]

Hi Mike, I think we are very much in agreement.

I too, have had a lot of people come to me after being burnt when buying online. Many are unwilling to spend any money on learning proper procedures until after they have lost a lot of money. I think this quote is of value: "If you think education is expensive - try ignorance."

I have often written about the huge number of scams arising out of dealings on Alibaba, Aliexpress, Tradekey, DHGate and others. The most notable event to come to public attention was the subject of an article in the Economist a few years ago under the title: "Alibaba and the 2236 thieves".

I recommend the use of inspection services where appropriate, and my book lists long established and reputable ones. My countless visits to China have given me a good insight into Chinese culture and business practice, and this is constantly updated through my contact with old friends there. I also deal with a law firm there that specializes in looking after the interests of overseas buyers.

Yes, our methods may be different, but while you probably deal primarily with large buyers, the majority of people who come to me are newbies with very limited capital. Both frequently need protecting from their own enthusiasm and lack of knowledge.

 

[leoand]

i suggest you try with small order that cost limit money,
in the long term, its wise and worth you to do,
for the lessons you need to learn from it, and for your own business possible growth in the future.
leo

 

[leoand]

and i think for the quality,
it is very much depends on the kind of goods you are importing,
some goods taking more risks, some, less.
just like what we buy from ebay or amazon,
besides all the surveys and comparation we can do,
we still need luck, to get a satisfied item from an online shop.
leo

 

[MOIC]

Generally, before deciding on a supplier you should compare products, quality and prices from several suppliers, before deciding which is the best supplier for you.

This involves receiving samples from a shortlist of suppliers that offer the products you are looking for.

Ideally, the samples should be check before being sent to ensure they adhere to your specifications as well as avoiding shipping costs, if they are wrong. Having the samples consolidated into one parcel will save you on costs.

Ideally, you need someone on the ground to do the following:

1. Visit the factory and check it exists and is actually owned by the supplier.

2. Check and verify all licences, certificates & bank accounts

3. Ensure the Proforma has everything included & detailed regarding all the product specifications, packing, packaging, shipping details, payment terms etc etc relevant to your order and are correct. (This is in effect, your contract with your supplier)

4. Have the sample approved.

4. Have each shipment inspected, irrespective if it's repeat orders.

5. Check & compare the shipping costs for each shipment with a reputable & trustworthy shipping company

6. Ensure you have an after sales service from both the supplier and shipping company.

The more precautions you take, the less risk you will have.

Unfortunately, there is no substitute for someone being on the ground in China to ensure the order process is conducted correctly and your goods leave the factory as required.

Best of luck.

 

[nalami]

For you situation,I think it is best for you to find a local agent in china,who will help you to find the right products for you,don't trust alibaba,you know,lots of middle business men there,of course there are factories,but problem is that they almost request a large MOQ,especially with your logo,so a local agent can find you small factories,which not ask so much moq,and they can really source many factories,after all they are professional in this.

 

[PFS_Logistics_WILL]

Hi,
Even I m SOHO in Shenzhen China, PM me what product you want you buy, then I ll check my files to ask for you, its free.

 

[Maple Sourcing]

Once, my British client tried to ask my help to do drop-shipping, as they have lots of consumers in Australia, USA, Japan, etc. However, we're surprised how expensive the courier cost would be. So, my client gave up this option.

Unless your products are high-value but low weight/volume, otherwise, drop-shipping will not work.

Regarding to quality, pls always compare samples and place a small order to test, before you commit to mass QTY. It will be worthwhile to pay a few hundreds of USD to hire someone to do QC check before products are loaded into container.

 

[funkygolddog]

thank you for all your replies - very informative

 

[Chinese Interpreter]

It depends on what products you want to buy. If you could find the supplier who is willing to offer you the products at the quantity needed, you may try to deal with them directly. But if some other products you can't find it easily on internet, or you don't trust the supplier, you need use an agent first. If you are doing a small business at the beginning, a freelance sourcing agent is good choice.

 

[Lattimore]

You may try the China sourcing fair in Hong Kong in Oct / March... You can also source from its website directly online. I attended this show several times, a pretty good sourcing show.

 

[MOIC]

A sourcing agent can source a product.

You need someone on the ground who understands your product, order, requirements and has experience to ensure everything is done correctly.(Not a sourcing agent)

If the order is small, say under £2,000, you may feel the costs can be saved.

Paying someone to ensure quality assurance is a small price to pay in the scheme of things.

 

[Maple Sourcing]

I've put an article on my website:
"10 Easy Steps to Filter Potential Scammers"
http://www.maplesourcing.com/blog-full-article.aspx?bid=1

Pls have a read if you do not mind. By correctly doing these checks, you may screen out 90% scammers.

I agree with "My Office In China", someone on ground in China to monitor order process and check quality for you will be important.

 

[sourcingagent1234]

yes,sourcing agent could help you cost down and risk down.It is a good choose

 

[PowerForwarding]

As per prior comments, a sourcing agent is certainly the safer option but of course if you can avoid then it will be cheaper but this brings about more risk. I'd probably find my own supplier and just use a sourcing agent to verify the supplier is legit and maybe inspect the commodity for the first few times.