Hidden Commissions between Sourcing Agents and Chinese Factories
Like everything in life, there are two types of sourcing agents: good and bad. Where the good agents are a useful resource and mostly non-existent, bad agents are a heavy liability. In this post, we’ll be sharing the ugly truth of Sourcing Agents in China Market and how they can impact your business.
Let me show you by an example:
You’re an importer and are searching for a manufacturer or supplier in China. Either you can make a visit to China yourself or locate sourcing agents in China to act on your behalf. Most of the times people go with the latter.
Now you might think you’ve got yourself a good deal. Rather, a good resource who will be loyal to you and find you the best supplier in China. But I am sorry to say, it is just your myth and I am here to break the bubble.
The Sourcing Agents- Yes, I am talking about both, local agents and foreign agents acting on behalf of the foreign companies in China. These malicious people try to fill their pockets from both parties-the foreign company or individual and the Chinese factories.
If you visit China as an Agent, you will see how they think it is so normal. That’s the sad reality which is impacting not just your business, but the reputation of honest Chinese factories and suppliers as well.
Let me share with you in-depth how a supplier will ruin the business for you!
The ugly truth about sourcing agents in China
Trust is the key factor when you hire a sourcing agent to act and make decisions on your behalf. Many times, the sourcing agents ask for a commission from factories and manufacturers to gain a side income.
This is the ugly truth of many sourcing agents in China and yours (if you have one) might be included.
All the genuine suppliers and factories suffer at the hands of these corrupt sourcing agents in China.
A corrupted agent will:
- Never push for the best price quote afraid that his commission will be reduced.
- Give no consideration to the quality of the products.
- Be biased towards the one supplier who’ll provide him greater benefits.
- Disregard genuine suppliers best for you.
- Disrespect the ethics and morals of a business relationship.
How Can You Ensure Your Safety From These Money-Leaking Agents
As an importer, it is very natural for most foreign companies to look for economic and best-quality products in the powerful market of China. However as noted above, entering into Chinese Market through a sourcing agent is a bad idea. They’ll leak money out of your pockets and charge you for nothing. Quality control Inspection is an important factor while partnering with a manufacturer. Sadly, these dual-faced agents know only one language-money and they’ll still proceed if the quality is not up to the standard.
Quality control Inspection is an important factor while partnering with a manufacturer. Sadly, these dual-faced agents know only one language-money and they’ll still proceed if the quality is not up to the standard.
Here’s a word of advice:
Always do your research and deal with Chinese Factories and suppliers directly. I agree, it seems challenging. But this will all be worth it.
Chinese Suppliers believe in Guanxi (“relationship”). They treat business arrangements and agreements as the relationship. Trust, communication, respect and time, these four factors are the backbone of a lasting relationship with your Chinese supplier.
Laying the foundation of a lasting relationship with a Chinese manufacturer by the foreign company (or individual) themselves will result in higher responsiveness and you’ll be able to see the difference, rather experience it on your own accord.
Why You Should Deal With Chinese Suppliers Directly
As mentioned before, the primary focus of Chinese manufacturers is to maintain Guanxi with their clients including local and foreign companies. Here’s why you as a foreign company or importer should directly contact Chinese factories for business:
> Manifest lasting relationships and enjoy more benefits.
> Higher and quicker response to requests.
> Favorable pricing options and payment methods.
> Readiness to fix any potential problems during or after the process.
Now that you know how the benefits of eliminating the Sourcing agent impact your business, pay a brief visit to China and finalize the deal yourself. Later on, for convenience, you can hire a representative for the follow-up on your behalf.
At ANETHIC, we are proud to say that we discourage such malpractices prevailing in the market. Like all genuine and honest Chinese factories(or suppliers), our primary focus is to deliver the best for our clients while cooperating on all steps involved in the spirit of Guanxi.
Remember, like most businesses, working with Chinese manufacturers is established on building relationships. Your relationship with your supplier is the cornerstone of your future progress.
Hence, move in the right direction with respect and commit to investing personally the necessary time in building the alliance, and you’ll see how they reward you in kind.