Finding buying agents in China: 6 things you should know Part 2

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Hidden commission

It is a public secret that many sourcing agents demand commission from the suppliers. Getting commission from supplier means your buying agents and the suppliers become alliances, they will not push for the best price otherwise the suppliers won’t happily to give them the commission; they might turn a black eye on quality issue; they don’t recommend the best suppliers to you, instead, they recommend a supplier give them the best benefit.

You pay them decent service fee, they present you a make-up sourcing report(price is not real, factory presentation is biased, best supplier might be disregarded), all the problems are caused by hidden commission.

Hidden commission is so common, so suppliers often offer to give commission to the buying agents even the agents don’t ask for it.

So how can you make sure your sourcing agents won’t betray you – adding hidden commission?

First of all, you should sign a contract with your sourcing agents, state clearly in the contract that hidden commission, actively or passively, is not allowed.

Secondly, you could contact some suppliers by random, using a different company name, see what price you get.

Hire an experts, not hire a secretary

There are thousands of products world buyers trying to buy from China, products are different to each other, it will take months or even years of learning to understand the production mechanism of a new product. A competent sourcing agent should be a product expert, if you don’t know the product, you don’t know how to plan the quality control, you don’t know the cost and can’t negotiate the price properly, you don’t even know where to buy the products.

That is why Li & Fung only hire sourcing experts with 10+ years working experience in certain industry. The experience give them the knowledge of quality control, price negotiation, product research and development. They can deliver a solution.

Communication often is a problem

First is the language. You should make sure your sourcing agent speak your language well, good enough to understand your email, to draft and review English contract, they should also be familiar with products in your language(parameters, specification, parts and component etc). You need a sourcing agent who is well prepared and hit the ground running. If you are looking to build a long term relationship with your agent, ideally the agent should be proficient in speaking, as in many cases, email is slow, you will need to call them to speed up process.

But as a matter of fact, generally Chinese don’t speak good English, so for important matters, better to send an email or fax to make sure your agent understand and won’t miss your key points after the phone call.

The efficiency of communication is an issue to look at, especially when we have a time zone difference. See how long it takes your agent to reply your email, if they set up third party email management software like outlook, foxmail, they should be able to reply your email instantly. Instant messenger can be used to speed up the communication, text message can also be used for urgent contact.

 

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Comments

1 Responses to " Finding buying agents in China: 6 things you should know Part 2 "

  1. Dr. Aman ullah on  DEC   16th , 2012 9:30 AM

    Dear Sir,





    Our company from pakistan. We want purchase from China on large scale. But we are in problem we need your help.



    Our Company want to open L.c. at sight, As you know we will open L.C at one company.

    Problem is this we will purchase from 14 companies from diffrent cities, how we will deal them in matter of payment. We intent to purchase 200 container 40 feet.



    You please write us indetail what you can do for us. We hope that you will provide us an opportunity to serve you, We shall come up your expectations.

    Waiting for your news and thank you in advance.





    With best regards,

    Khokhar & company

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