A sourcing agent is an individual or an agency that represents a buyer to source materials and commodities. The agent buys the raw materials required for manufacturing from the place where the buyer cannot reach. Foreign manufacturers rely on Chinese agents to buy the materials from China as they cannot reach the country. Hence, the role of a sourcing agent is extremely useful when you are into international trade.
Sometimes, sourcing agents act like an entity that sources supply for the clients. The conventional role of a sourcing agent in China is not only to find the right supplier but also to negotiate the price and confirm the efficiency and the on-time shipping. Agents also check the product quality.
Nobody can deny the world’s dependence on Chinese manufacturing. The role of China sourcing agent has always influenced global businesses. China had been the investors’ best choice mainly due to the cost factor. But the present global business world has questioned the future of these agents in China and their grip over the business world. This blog has discussed some facts that have made the future of the agents uncertain in China. Read on to learn about the facts.
1. Covid-19 Pandemic
At the outbreak of the COVID-19 pandemic, Beijing decided to close the factories and impose a lockdown to break the chain. Economists and market experts have predicted that globalization will never back to its pre-pandemic form. It has compelled Western companies to reshuffle their supply chains. Many companies have moved to other countries, and it gradually reduces the demand for Chinese sourcing agents.
2. Sourcing itself
Sourcing implies an identification of a supplier, who is able to provide the businesses with raw materials on time. Sourcing agents make this process easier and negotiate a price that is suitable for the buyers. The arrival of B2B directories such as Global Sources, and Alibaba have made the process easier, but they can facilitate only the first step of sourcing- identification of the supplier, while the process also needs to screen or audit the suppliers.
3. Changes in Supply Chain Process
• Design Sensitivity & Engineered Assistance
The Supply chain process witnesses design sensitivity and is looking for engineering assistance. For instance, you can imagine that the importer wants a factory to manufacture a product that is not easy to build but the factory is not able to fulfill the requirement; the buyer, on the other hand, has resources to provide training. In such a situation, only third-party interference can help. This kind of case needs expertise in dealing with engineering capabilities and generalists can’t improve the situation.
Some people question whether there will be still a need for a sourcing agent in China in the next 10 years. The answer is “Yes”. Chinese sourcing agents hold command over communication, and they have a better understanding of the importer’s need.
• Quality Assurance
Many professional agencies provide only quality inspection services. But these services are much expensive. Though some businesses have embraced these services due to the imposed lockdown followed by the outbreak of COVID-19, most businesses are still hopeful and want to hire Chinese sourcing agents as their services include quality assurance and it is a cost-effective solution.
A Final Takeaway
The future of the China sourcing agent might be covered by the clouds of uncertainties, but it is not finished. Still, there are plenty of opportunities for them and the situation will be better over time.
I agree with you however there is an important change going on with China and factories transitioning out of China and the issue with supply chain raw materials. I have been interviewed by Reuters several times as well as the south China morning post. I would like to set up all call with you and see if we can have some common ground for making money. I have just completed a factories China production to Thailand and have developed a very successful program.
I helped a American customer to source aluminum parts in China, after many quotes he decided to come to visit sorted China factories. I am so glad to help him with good local suppliers.