Starting out
What a sourcing agent actually does.
A sourcing agent represents the buyer in the producing country. They find and verify producers, negotiate, inspect, coordinate documents and manage the shipment. What decides whether that is worth anything is who pays them, because an agent paid by the factory has the opposite interests to yours.
Nine jobs.
Not all of them are needed on every order, and a buyer with an established supplier may want only two or three.
- 01
Find candidates
Including from clusters that do not appear in any directory, which is the part that cannot be done from a desk.
- 02
Verify them
Business registration, what the company is licensed to do, whether the name on the quotation matches the name on the account.
- 03
Visit and audit
Somebody at the address, on a day you chose, looking at machines with your product on them.
- 04
Translate the specification
Not the words. The intent, into terms a workshop floor can act on, which is a different job from language.
- 05
Negotiate
On specification first and price second, which only works if the agent has no interest in the price being higher.
- 06
Collect and compare samples
From several producers to one specification, with duplicates sealed at each, so the comparison is real.
- 07
Map the documents
Against your destination rather than in general, before anyone quotes, because some of it has to exist before production starts.
- 08
Inspect before loading
Against an approved sample, at the consolidation point, with the balance attached to the result.
- 09
Coordinate the shipment
Consolidation, freight, documents, and the domestic leg that nobody prices.
Three things they cannot do.
Carry your import obligations. FSVP in the United States, product safety in the European Union, food licensing in Canada and registration almost everywhere sit on the importer by law, and no arrangement with an agent moves them.
Guarantee a producer. An audit describes a company on a day and an inspection describes a container. Neither promises what happens in eight months, which is why the controls repeat rather than being done once.
Make a bad product good. If the specification was vague or the price was pushed below cost, an agent can tell you and cannot fix the consequence. The leverage is at the specification stage.
The one question.
Who pays them. An agent taking commission from the factory is paid a percentage of what you spend by the party you are negotiating against. That is not automatically dishonest and it is a structural conflict, and it is invisible because the service looks free.
The follow-up question is what they physically do. Somebody who never leaves an office is a broker with a nicer name, and the work that justifies a fee is the work that happens at the address of a workshop.
Our own answer, since the page would be worthless without it: five per cent of order value, paid by you, nothing from the producer, and the producer's own quotation goes to you unedited.
Questions buyers ask.
Can I just use an inspection company instead?
For a supplier you already have and trust, often yes, and it is much cheaper. Inspection answers whether this container is right. It does not find producers, verify them or map documents against your market, which are the jobs a first-time buyer actually needs.
Do I still need an agent once I know the supplier?
Usually less of one. Many buyers move to inspection only, or to inspection plus occasional audits, once the relationship works. That is a normal trajectory and an agent who fights it is protecting a fee rather than serving a client.
What does an agent cost?
Ours is published, which is unusual in this trade and deliberate: a buyer comparing three agents cannot compare anything when all three say contact us. Where a fee is not published, ask who else pays them before asking what they charge.
Read next.
Agent, trading company or direct
Three ways to buy from Indonesia, what each costs you in money and in visibility, and when you should not use an agent at all.
Finding a producer in Indonesia
Six routes to real producers, what each is good for and blind to, and the five-step funnel from a list of names to a first order.
Inspecting before it sails
The five moments worth inspecting, what a report has to contain, and the mistake that makes an inspection worthless.
What to look at on a factory visit
A day at a producer answers questions no document can. What to look for and the three things that tell you most.
A sourcing agent or a B2B platform
What a platform does well, what it structurally cannot do, and the order size at which paying somebody on the ground starts to make sense.
A sourcing agent or your own office
At some volume an agent stops being the cheaper answer. What each model actually gives you and where the crossover sits.
Sourcing from Indonesia?
Tell us the product, the quantity and the destination. We come back with what it involves before anyone talks about money.