The Benefits of Using a Sourcing Agent

Experienced buyers usually go immediately to a sourcing agent, while inexperienced buyers end up at our door only after having several frustrating or negative attempts to source things for themselves. Using a sourcing agent can provide a number of benefits when sourcing materials, products, and services, which we will briefly discuss here.

First, time. A sourcing agent can save time for you as a buyer by handling the sourcing process on your behalf. This can include researching potential suppliers, communicating with them in ways they understand and building rapport, negotiating good terms that meet your requirements, and visiting their factories or warehouses to ensure quality and compliance. This can free up time for you, the buyer, to focus on other aspects of your business.

Second, market knowledge. A sourcing agent can provide deep expertise and inside knowledge of the industry and specific markets. Sourcing agents often have established relationships with suppliers, which can provide a company with access to a wider range of options, to avoid being trapped into a bad deal. This leads to potentially better prices and terms. Additionally, sourcing agents may be familiar with specific regulations and compliance requirements that need to be met, which can help ensure that the company is sourcing materials, products, and services in a legal and ethical manner. There are many in-country regulations which may control, limit or even prevent export, as well as import regulations in the delivery country which may control, restrict or block imports. A good sourcing agent will have the knowledge and contacts to identify potential problems and to avoid or solve them. 

Third, a sourcing agent can help you to mitigate risks associated with sourcing. This can include risks related to quality, delivery, and payment terms. A sourcing agent can help ensure that a company is sourcing from reputable suppliers who can meet the company's needs and expectations. How something is made is often as important as what it contains, now that ethics govern so much of our international trade, especially with the European Union or the USA. Additionally, a sourcing agent can help negotiate payment terms and other contract details to protect your interests as a buyer, when local financial services are more likely to favor local business, and the suppliers know the tricks and loopholes of the local system.

Fourth, culture and language. Sourcing agents can communicate with suppliers in their native language, which can help to ensure accurate and effective communication. This doesn't just mean working in national or regional languages, it means understanding the language of business, the protocols, the informalities and formalities, knowing what to say, when to say it, and how to say it. This includes how and when to respond, and what cultural factors may affect the seller's decisions, the negotiations, and the relationship. A sourcing agent can help to navigate cultural differences and customs, which can be important when doing business with suppliers in other countries. There are many sensitivities to consider, such as religion, politics, family power dynamics, status and respect, speed and timing, and so on. It takes time to get under the skin of a culture, which is why sourcing agents are so useful in bringing this value to your sourcing efforts. 

Fifth, logistics. Once you have found your seller, and secured your materials or products, you will need to think about how to take delivery so you can start making money. A sourcing agent can often also provide logistics support for your business. This can include help with locating and engaging transportation, warehousing, freight packing, customs clearance, and other logistics-related issues. This can help ensure that the materials, products, and services are delivered to you or to your customers in a timely and efficient manner.

Can you do all of this without a sourcing agent?  Yes, absolutely you can, if you are prepared to invest the time and effort to learn all of the steps discussed above. If you are prepared to make a few (hopefully not too expensive) mistakes. If you are prepared to wrestle with the local bureaucracies, financial systems, and legal complexities. If you are prepared to handle the range of supplier behaviors from simple incompetence to human error all the way to outright fraud. Using a sourcing agent can provide a number of benefits, including saving time, providing expertise and knowledge, mitigating risks, providing language and cultural support, and providing logistics support. As a result, many buyers choose to work with sourcing agents to help them effectively source materials, products, and services, and many of those choose Globally Sourceable. Why not get your next quote here?