Sourcing companies play a huge role in the supply chain. They benefit a wide category of people ranging from small business owners to large enterprises. There is a lot of misleading information about sourcing companies and this article aims to help you understand their processes better.
What is a sourcing company?
A sourcing company or sourcing agent assists clients with locating specific products at an affordable rate. They help to source for and purchase products that might be difficult for a buyer to get. In other words, sourcing companies facilitate international trade.
Sourcing agencies or sourcing companies take a grassroots approach to search for products. They are more hands-on in the supply chain process; serving as a client’s eyes and ears. Sourcing companies are ideal for importers who want to ship large quantities of products ; and may not be able to travel by themselves to get these products.
Sourcing company vs sourcing agent
A team of sourcing agents with years of experience usually work for sourcing companies. Their jobs involve structured processes such as sourcing, inspection, quality control, quality assurance, warehousing, logistics, etc. They usually have connections and relationships with multiple suppliers and manufacturers. This makes it easy for them to provide viable options for the clients they serve.
A sourcing agent aids a firm in discovering low-cost sources for items and supplies,. This allows the organization save money on production or purchasing. Sourcing agents may work for a single client independently or for a company that services many clients.
Generally, sourcing agents should be fluently multilingual, to enable them to easily connect with the locals of whatever region they source products from. A good ability to assess customer needs and provide viable solutions is an important skill every sourcing company or agent must have.
Who needs sourcing companies?
- Companies /establishments: Sourcing Companies are a good fit for firms that are looking to source affordable products in bulk. These could either be for souvenirs, product packaging, or products and materials that facilitate their daily processes, amongst many others. They help companies save money on their overall project cost.
- Beginners in Importation: Importation involves a myriad of processes that might be too complicated for a beginner in importation to navigate. An inexperienced person going through processes such as; sourcing the right products, effectively communicating with suppliers, following up production (when manufacturing), product testing/quality control, and planning logistics (including shipping and clearing) may result in scams, wasted money, and effort. Sourcing companies walk you through the processes so you have an opportunity to learn from them while you work with them.
- Clients who require sourcing for multiple products: The amount of effort required for one person to source for one product is tedious; as it involves product research, quality assurance, and much more. Sourcing companies have the facilities to handle multiple product requests at a time because they have databases of manufacturers and suppliers in their reach. For example souvenirs, multiple items for large retailers, etc.
People in search of special product categories: This involves building materials, hardware, specific tools, and equipment. Sourcing companies can help you locate products that might be impossible for you to find online, especially when the specification of the product is unique
What services do sourcing companies provide?
As mentioned earlier, sourcing agents/companies provide the following services amongst others ;
- Sourcing: Product sourcing is the service every sourcing company primarily renders. They also have different channels through which they source products. In a lot of cases, sourcing companies have suppliers and manufacturers in their reach; which helps to narrow the search for legitimate suppliers and avoid online scams.
- Supplier communication/Purchase of products: Sourcing companies convey the client’s requirements, concerns, and budget to the appropriate suppliers and help to make payment on behalf of the customer. As for how they charge for their services, sourcing companies have different modes of charging and they can range from percentages to fixed pricing, depending on how they operate.
- Quality assurance/Quality control: This includes inspection, testing, and following up on production. This is a very important step because it minimises product defects and wastage in the supply chain process. This process also involves arranging products for shipping.
- Shipping/Clearing: Transportation of products is another service that these companies/agencies provide. Sourcing companies handle all the groundwork and shorten processes such as clearing, import/export duties and they generally help to curb corruption surrounding the importation process. A sourcing agent or organisation should be able to transfer commodities through the foreign supply chain faster, cheaper, and with less risk.
- Other services; product design, packaging design, customization, etc
Conclusion
We have provided this breakdown to give you an idea of the processes that go into sourcing for different products. If you have any questions about sourcing agents or companies, you can send a message for professional help. Do you find this article helpful? Share it with your friends and share your ideas in the comments section. If you would like to locate a China sourcing agent, you can contact Moonbay Group is one of the leading China sourcing agencies in Nigeria.