July 31, 2018
Risk In Choosing a Sourcing Agent And How To Avoid It
The lack of professionalism in sourcing agents is a big concern for all global buyers, it has been a so controversial issue that people have heated debate over the pros and cons of hiring a sourcing agent. Numerous buying offices and sourcing agents themselves tend to accuse the conduct of taking kickbacks, and after doing so they shift the buyers’ attention to their own services and advertise that they will never resort to this unethical behavior.
However, it should be admitted that all of them are in essence agents, and they are all likely to fall into this lapse, but few of them shed much light on solutions to this issue. The difficulty is simply due to human nature. For example, some of them may have mixed feelings when they offer the quotations to their clients, they may ask themselves, “I found so amazing a supplier for my client, and they get so good price, shouldn’t I deserve something more?” “The packaging and shipping cost me so much, and it took me a quite a bit of effort in talking to this supplier, do I work for my clients simply to make ends meet?”
A common practice is that some suppliers willingly give sourcing consultants or translators an amount of hidden commission in order to win the order or the latter asks for kickbacks from the suppliers, however, this practice is not only unethical and unprofessional, but also practically unsustainable, because although unlikely some day the suppliers could tell the truth to the buyer, the sourcing agent would find himself a mere tool for the suppliers and, even worse, end up being no long trusted by the client.
The best and very likely the only solution is to facilitate a sustainable system that enables the sourcing agent to be fully integrated into the buyer’s virtual office. The client should treat the sourcing agent as a colleague or employee with absolute sincerity, while the sourcing agent should treat his client as his employer with absolute loyalty.
The sourcing agent can try some of the methods below:
1. Provide payment proof for each and every transaction with the suppliers and shippers. This may include photos of receipts, Alipay/Wechat transfer screenshots, bank slips, etc. In this way, the original total cost in procuring the goods can be easily tracked and calculated.
2. Present detailed contact information of all the suppliers and shippers to the client. Moreover, when the client needs to communicate with them for any clarification purposes, if the suppliers do not understand English, the sourcing agent should offer translation help to facilitate the clarification process.
3. Say no to any form of hidden commission from the suppliers, stay impartial and objective in choosing suppliers for the client’s requirement.
4. Always stay answerable and open to the suppliers, deliver the buyer’s requirements to them in a timely manner, show to the suppliers that the buyer’s interests are physically and constantly represented.
5. At the client’s request, make tours to the suppliers for quality checking, pre-delivery inspection, trouble shooting, technical support, etc and make sure the suppliers fix all issues concerned with the goods before and after the delivery of the goods.
The buyer can try some of the methods below:
1. Offer a reasonable sourcing fee.
2. If possible, help the agent create an Email ID in the name of the employer’s company so he can more convincingly represent the buyer in dealing with the suppliers, likewise, the creation of a business card can also do the same purpose.
3. Cover the expenditures including costs generated in packaging, domestic shipping cost, traveling expenses, etc at the agent’s end.
4. Motivation measures: As the cooperation reaches a highly stable and mature level, it could worth consideration to offer retainer fee or performance bonus to the agent based on savings achieved.