06 Jul Product Sourcing Agent Explainer
What is a sourcing agent?
A sourcing agent will work with a brand to source products at low prices so a brand can make the most of their budget while not compromising quality. A UK-based sourcing agent may work for multiple companies and utilise the relationships they have with global factories that specialise in specific fabrics or products.
A product sourcing agent is a specialist who has long term relationships with factories in many different countries, that can manufacture products. There are many benefits of using a UK-based product sourcing specialists, so we’ve outlined them here so you can make your own mind up.
What type of sourcing agent exists?
There are different kinds of sourcing agents, and you must choose what is most relevant to your business. Single-sourcing agents tend to work independently and work closely with you to understand your business needs. The advantage of single-sourcing agents is that they work as part of your team and understand your business like you do, but it’s also hard to understand the scale of their network or gain credible references from previous clients so the opportunity for fraud or scams is high.
Sourcing agencies have several employees’ working for them, and they tend to specialise in niches for example electronics or textiles. The benefit of sourcing companies specialising in a genre of product is that they are experts and really understand nuances of the market and working with brands like yours.
Full-service sourcing and logistic companies provide several services from sourcing products to shipping, coordinated logistics, storing and quality inspections. By far the full-service agencies are more versatile than other types of sourcing agent because they manage the whole project for you. They are experienced in sourcing a supplier and the manufacturing process, to quality testing using third-party auditors to delivering a product, customs and tax considerations as well as storage and fulfilment all on your behalf. The benefit of using an all-in-one agency like this means that you are only talking to one project manager, and they are coordinating everything for you. The risk is that you are dependant on one organisation to make it all happen for you, so you need to ensure that they are a credible option and can provide credentials.
Why should you use a UK-based product sourcing specialist?
Having a UK-based supplier really helps with the up-front due diligence and ongoing status communication. The time difference when using global suppliers can elongate the time is takes to understand how your project is progressing but with a UK-based supplier you are working in Pound sterling, your project manager is direct and can answer all your questions when you ask them. A UK-based supplier will also have the experience of working with other companies like yours and you can utilise that specialist product knowledge by asking questions and seeing samples of other work they’ve completed.
How much does a sourcing agent cost?
Product sourcing specialists tend to take a percentage from the amount of the whole order. Their margin is usually part of the overall cost that you pay. A full-service sourcing agency and shipping coordinator will tend to show you pricing broken down by product and shipping so you can understand where your budget is being spent.
Find the best sourcing agent for your company
- When considering employing a sourcing agent there are questions you can ask them or find answers to on their website. Questions you need to ask a sourcing agent for your company include:
- Do you have knowledge of UK safety standards?
- How do you guarantee quality control for my whole order?
- Do you have experience with product labelling for retail & Amazon?
- Are you VAT registered?
- Can you advise on customs procedures for my country?
- Can you import into the US? Do you have a Certificate of Import and can act on my behalf?
Auditing questions are good to understand what your sourcing agency know about their factories.
- What audits have your factories undergone?
- Are the manufacturing facilities suitable and fit for purpose?
- Has an ethical audit taken place? Are the factory employees working in a safe and hygienic environment? Are they paid a fair wage?
- Has the factory been audited to consider the impact on the environment? Do they dispose of waste in a responsible manner? How much plastic do you use for packing?
- Does the factory have SEDEX accreditation? A SMETA (Sedex Member Ethical Trade Audit) asses a factory based on the standards of labour, health and safety, environment, and business ethics. The organisation believes these are key areas to assess an organisation and how responsible their business practice is and then offer ways in which to improve to meet them.
5 reasons to use an expert in product sourcing
- A specialist will have long term relationships with factories, which means that your brand will benefit from economies of scale driven by the volume your sourcing specialist will put through the factory.
- A UK-based agency will have great customer service, project management experiences plus superb quality control through a third-party auditor or within a factory.
- Specialists in niche manufacture of products, for example, bags or umbrellas, means that you benefit from the experience your product specialist has gained over many years of working in the industry and with brands like yours.
- A full-service product sourcing expert will have experience in handling customs, international shipping & importing logistics as well as economies of scale. They will have preferential rates with shipping agents that you can benefit from.
- Personalised packaging, drop shipping, pick & pack – your product sourcing agency will advise and source custom packaging, coordinate drop shipping or assist with storage and fulfilling individual orders on your behalf.
How to progress a relationship with a product sourcing company in the UK
- Define what you need – what sort of product is it? What will it be used for? What are the technical details of the product? Size, shape, function? Confirming product details like specifications, packaging and artwork, certification requirements, and order quantities at the beginning ensures you’ll get a comprehensive quote with no hidden extras.
- Set your budget – realistically, how much do you want to spend on the product? Work back from the profit you want to make per unit and then how much you want to spend. Sounds obvious, but it helps define the quality of the product you can make, the materials used and how the product will look and feel as well as last.
- Choose a type of sourcing agent – do you need a full-service agency, or do you prefer an individual?
- Research and compare – what is their customer service like? Do they get back to you quickly after your initial enquiry? Do the people you talk to on the phone helpful and knowledgeable? Those first impressions count – it’s likely what to expect throughout your project coordination.
- Get comparative quotes based on the same specification so you are comparing like for like.
- Negotiate the cost. Is this the best price you are being offered? Can there be a cost saving with shipping?
- Ensure you have everything recorded and your paperwork is in order. Formal quotes, terms of business plus any non-disclosure agreements you may have asked the product sourcing specialist to sign and adhere to.
- Understand lead times and ask for specific delivery dates for samples or your full order before you pay for your order.
- Read the terms of business or contract from your sourcing agency. Understand any tolerances or sampling requirements. Have you sent them all your artwork and Pantone references? They’ll need this to create a pre-production sample.
- Pay your suppliers on time!
Keep your mind open to where your product might be sourced from. Manufacturing in the UK is brilliant, limited, and expensive – but entirely possible. Depends on what you want to manufacture. If you’re looking for specific expertise, you can find it internationally. Great things have come from places that have a bag reputation. Chinese sourcing and supply contribute to a wide range of areas that make our day to day living accessible such as:
Textile manufacturing, cosmetics/skincare, garden-landscaping, gifts and seasonal parties, hotel supplies, pregnancy healthcare, tableware-cookware, machinery parts, building supplies, bike-auto accessories, power tools, sports items, production machines, bathroom and kitchen tiles, bamboo and wood products, flooring and furniture, stationery and industrial workwear.