5 Things You Need To Know Before Choosing A Sourcing Company

5 Things You Need To Know Before Choosing A Sourcing Company
Penglight is a professional sourcing company specializes in led light

Penglight is a professional sourcing company specializes in led light

In the last post, I have written why you need a sourcing agent? Now you know the importance of having a sourcing agent on your side to help you with import business, it gets you relieved from many unnecessary paperwork and gives you more efficiency, so you can focus on your core activity.

If you are about to hire a sourcing company to assist your business, the following are the 5 things you need to consider before you make up your mind to choose them.

Knowledge

The sourcing company should have a solid knowledge of the products they deal with, otherwise, it’s with little chances for them to do the work well, especially when it comes to technical or electrical products, like Mechanized products, LED products, etc.

For example, if you’re in the LED lighting business, they should know the specification and parameter of the products, such as the type of LED chips (2835, 3030 or 5050, domestic chip like Sanan or branded chip like Cree, Lumiled, Nichia) and LED driver, which includes isolated, non-isolated and flicker-free version, etc.

Furthermore, a sourcing company should also familiar with how the products are being produced? What are the production processes? Which components or materials have a big impact on quality? Therefore they will know how to arrange the quality control inspection, and able to spot the potential quality issues before delivery.

Experience

Having the experience means that you know about what you are doing and how to do it. If a sourcing company does not have related experience in sourcing and export field, they have no idea where to find the right suppliers and how to evaluate good quality products. It will take them a lot of time to know the ropes and they also have to learn it from the start.

Additionally, lack of experience sometimes also means they do not know how to deal with the suppliers properly, which is very important to keep good business relationships with them and to let them work in your way.

For you, it means you are hiring a green hand to do the job, wasting your time and money.



Background

Conduct out a background check of the sourcing agents you are planning to hire. For example, you can check their Linkedin profile or Facebook page to see his or her former job experience and company information, such as founded time, services, company goal, number of employees, etc. The background information will help you to know what kind of capability they have, how many resources they can provide for you, and how well they can do the sourcing job.

If the sourcing agents’ former work experience is in the import & export field or other relevant work, they tie-up with vendors, suppliers, and logistics partners. By working with this sort of sourcing agent, you will be connected to other reliable agents for your whole business. This will reduce the level of your personal involvement, freeing up sufficient time for you to concentrate on core business operations.

Location

Location can have a direct influence on whether they can do the work well because your suppliers are dispersive in different areas, it will be a difficulty if the sourcing agent is far from it.

In China, the industrial clusters are mainly in coastal cities, which are mostly in the provinces like Guangdong, Zhejiang, Fujian. If the sourcing companies you selected are far from the industrial clusters and located in other provinces say Hunan, Guizhou, or other areas from the north/west of China, it will be a problem for them to visit the suppliers and do the routine works. Cost is very high in terms of transportation and accommodation.

Cities like Shenzhen, Zhongshan, and Foshan, are the industrial clusters for LED lights, in these cities mean you have more access to reach a variety of lighting suppliers, and you can even visit 3-5 suppliers a day.

Hence, if the sourcing company located in the right position, it is more efficient and quick for them to arrange the daily task for you, such as factory audit, pre-production inspection, quality surveillance, shipment arrangement, etc.

Map of China's 34 Provinces and Administrative Regions

Map of China’s 34 Provinces and Administrative Regions

Focus markets

Before you choose a sourcing company to assist your import business, please ask them first which markets they focus, or where are their customers from. Since different countries have their own different cultures, regulations, standards, and certification requirements.

For example, in terms of certification, CE is a must if you want to sell in European countries, and if you want to sell in the USA, UL or ETL is also indispensable. The others like SAA for the Australian market, BIS for the Indian market, SASO for Saudi Arabia, etc.

LED lighting product is with electrical components inside, the usage, installation methods, and safety requirements also vary from country to country. A sourcing company can easily get it and avoid unnecessary troubles if they have already worked in the market.

Different markets are also with different taste in the products. If you’re from the USA or Europe and you’re looking for high-quality products, but the sourcing agent’s customers are mostly from India or the Middle East, then they are not suitable for your business.

 

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3 replies
  1. Gary Puntman
    Gary Puntman says:

    I agree that you want to consider location when you’re finding a sourcing company. You should make sure you consider transportation costs, like you said. You want to make sure you can get the products in the right amount of time as well.

    Reply
  2. Eli Richardson
    Eli Richardson says:

    It’s great that you talked about how it’s important to hire a sourcing company that knows everything about their products. In my opinion, for any company, it could be a great advantage to work with a sourced company. Plus, I’ve heard that it could help you save money, so I’d definitely choose to work with one. Thanks for helping me learn about the benefits of working with a sourcing company.

    Reply

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