The advantages of a sourcing agency

Would you like to know why companies often use procurement agencies? In our blog, we would like to explain the advantages for you and your company of working with a procurement agency.

A sourcing agency is a service provider that identifies manufacturers in foreign markets. Due to the large number of producers in China, this is usually the Chinese market. An agency usually also carries out quality control by inspecting the manufactured products on site before they are transported to Germany. Procurement agencies are also known colloquially as import-export companies, import agents or agencies, as their main activity is importing and exporting.

A common way for many companies to source in the Chinese market is to find a supplier via large trading platforms. As suppliers are usually found in Chinese markets, many buyers usually come across the Alibaba platform. However, using this platform can be very problematic, especially for inexperienced users. Many wholesalers on these platforms like to pose as suppliers. They try to use their website presence and workshop images to make customers believe that they produce the products directly. This is problematic because wholesalers often add hidden margins to the prices, which are avoidable. A procurement agent also has margins, but these are transparent and negotiable. Procurement agencies are therefore a real alternative for companies that produce abroad, as they are not significantly more expensive but are much more secure and transparent.

However, a sourcing agency can not only help you in your search for producers in China, but also with logistics. After all, there is a lot to consider when transporting products from China to Europe. There are different ways to transport the goods - sea freight, air freight or rail transportation. What is best suited to the company and the product in question depends on the goods themselves, the urgency of the product and the company's budget. Although air transportation is very fast, it is also more expensive than the other options. A sourcing agency can help with these decisions and much more, such as customs duties in China, so that the company does not have to worry and can look forward to the arrival of its new products.

Are there individual requirements for the product - does it have a certain technical complexity or are special machines required for production? If the answer to any of these questions is yes, a wholesaler from a platform will usually find it very difficult to respond to the company's wishes and requirements. They will offer the product at a higher cost, if at all. A procurement agency, on the other hand, can respond to your individual wishes and implement them. By simply communicating with an import agent, which at best has locations in China and Europe, companies can save time and money and concentrate on their actual business while the sourcing agency takes care of everything else.

It is often the case that communication with Chinese suppliers is quite laborious. Although various manufacturers are equipped with a basic knowledge of English, important details can still get lost. A sourcing agency can avoid this by using employees who speak Chinese and often come from China themselves. These employees speak to the producers on site to clear up any misunderstandings so that the end product meets the company's expectations.

Unfortunately, fraud often occurs in connection with purchasing and production in other countries. A procurement agency tries to counteract this in the best possible way. With the help of employees close to the supplier, loads can be checked before they are dispatched. On request, an employee of the procurement agency can also record the sampling, which provides additional security.

A sourcing agency is an advantage in many cases, as a simple, standard market product often does not meet the requirements and wishes of the company. A sourcing agency can also produce more sophisticated, high-quality products in China. Although conducting a supplier search yourself can save money, it can cost time and nerves, which is where a sourcing agency can help. If you conduct the search yourself, the risk of falling victim to fraud is significantly higher than if a specialized agency does this, as the experts visit the factories on site and speak directly with those responsible. Agencies with offices in Germany and China in particular offer great advantages for companies, as this means that communication is always easy and there is always someone on site to take care of everything.