A sourcing agent is a professional or entrepreneur who helps connect the manufacturer of a product to the user or distributor. In most cases, sourcing agents work globally, linking business people from different countries. Indeed, the world has become a global village, and the possibilities brought about by international trade are on the increase.
How can I become a sourcing agent?
A sourcing agent career involves handling businesses on behalf of other people and is associated with vast sums of money. Though no qualification is pegged on the career, it goes without saying that you must have excellent communication skills. If you are going to source for Chinese products, you need not be highly qualified; however, fluency of English and the Chinese language will suffice.
Apart from language, here are the other essential skills you require to work effectively as a sourcing agent.
Good understanding of your preferred market
Before you enter any market as a sourcing agent, you need to understand it like the back of your hand. For instance, if you are going to source for products from China, it would help to identify which products will have an appeal with the buyers. Also, you must know which factory or factories have the best quality of products. You also need to understand the impact of international events on your business. All this information requires internet research or even visiting the country to ascertain and verify information.
Knowing the supplier
As a sourcing agent, you are in business if you have a product, which means having a supplier. You must make sure only to work with a supplier you can trust. It would help if you found out whether the company or factory is legitimate and not a scam. Your job includes assessing the suppliers and meeting them to see if they will take on the orders. You also have to inspect factories to confirm that they can deliver the goods and meet quality assurance guidelines. Evaluation can also include issues to do with addressing ethical concerns like worries about pollution or exploitative labor conditions.
To succeed as a sourcing agent requires that you be a good negotiator. You can only get buyers if you have a high-quality product with competitive pricing. When dealing with clients, you have to be open and transparent. Avoid luring customers with too low quotes to get orders. Also, don't promise unrealistic delivery dates.
Your pay is a percentage that usually ranges between 1% to 10%, which you get when paying the supplier.
Why is the sourcing agent important in the supply chain?
- Vendor penetration
Sourcing agents have vendor penetration and supply capability that a direct sourcing system can only wish. They play a central role, which entails finding reputable and trustworthy companies with a proven track record to do business. Sourcing agents can activate their local networks to find the best company.
- Fear of the risk factor
With the Asian continent quickly becoming the epicenter of manufacturing, if you have never done business there before, it could present an element of risk along with fear of the unknown. If let’s say you’re trying to find a Chinese manufacturer, you may never know how to go about finding the best suited for the kind of business that you intend to transact. However, a sourcing agent can give you several options on which company to deal with, its budget, quality of service, and track record.
- Quality assurance
Outsourcing manufacturing can be a headache, mainly due to the complexity of the process. Since you are not present to monitor all the production stages, you can end up with a substandard product. Sourcing agents can offer meaningful quality assurance in supply chain management by organizing quality assurance inspection visits throughout the manufacturing process. In case of any error, early detection and rectification are done.
- Language barrier
Communication is central to supply chain management. Global sourcing comes with language barrier challenges. If there is miscommunication between two parties, then chances of conflict occurring are high since you may be supplied with the wrong product resulting in huge losses. Contracting a sourcing agent who understands your language and that of your manufacturer can make the trading process smooth.
- Scaling up
Most companies remain in their comfort zone perpetually because they are not confident that they can handle the enormous supply chain if they scale up their operations. Sourcing agents specializing in your industry, are well equipped to assist you in scaling up your business.
A career as a sourcing agent is lucrative. Many buyers prefer using a sourcing agent because direct sourcing is risky. However, as a sourcing agent, you need to understand your market, identify a product that appeals to the consumer, and try to get the best price possible.