The global business ecosystem has changed significantly in recent decades – making China one of the world’s largest productive powers. That was certainly due to low labor costs, open markets for exports – but also the need for products from China and their favorable price.
Therefore, it is not surprising that many traders around the world do business importing goods from China – and cooperating with agents and suppliers directly in this country. Yet, no matter how lucrative this business may be for many – you need to take care to avoid some of the typical mistakes in this type of business. Therefore, we will point out 4 mistakes you should avoid when working with sourcing agents in China.
Importing Products From China Is A Very Profitable Business For Many People
Although it has been among the production leaders for decades, China has intensified its production dynamics in recent years – and continues to hold a leading position in production and exports despite competition from countries such as India, Vietnam, etc.
The advantage of importing Chinese products is better quality, compared to the above-mentioned competition, but above all, better logistics. Namely, China has many years of experience in business cooperation with sellers and buyers from around the world. Therefore, it is not surprising that more and more European and American retailers are successfully doing business with Chinese suppliers.
You Need An Agent In China For This Type Of Business
If you are among those who want to start a business with Chinese manufacturers, it is clear to you that this business can be very challenging. Therefore, you need to get an agent in China who will do most of the work for you. Of course, agencies that deal with this are not difficult to find – but still, you need to find those that you can truly rely on.
Your Chinese agent should be reliable and know exactly what needs to be done in this business. However, problems often occur – and they are mostly the result of ignorance and some of the typical mistakes we make in dealing with sourcing agents in China. Here are some mistakes we should avoid in that case.
Frequent Mistakes In Doing Business With Chinese Sourcing Agents And How To Avoid Them
Importing from China is not an easy process. Therefore, it is necessary to have a Chinese sourcing agent. In such a situation, it is certainly much easier for you to just send the specification and wait for the ordered goods to arrive – and you can focus on distribution and sales. So, a good sourcing agent can do the entire procurement process for you. However, for the job to run smoothly, you should avoid certain mistakes in cooperation with Chinese sourcing agents. Here are some things you should avoid.
1. Poor choice of Chinese sourcing agent
Today in the era of the internet – almost everything seems to be available to us. However, this can sometimes be an illusion. Therefore, it is very important to make a good choice of a Chinese sourcing agent. Namely, today you will find many online sourcing agencies that offer you the services of their agents. That has its advantages and disadvantages. According to justchinait.com, doing business with a sourcing company that can offer you one of its Chinese agents is a more expensive option – but it also gives you some sense of safety because you still do business with the company.
They have more business experience, and their agents are more likely to speak English better. However, even in this sphere, a mistake can easily happen. Namely, sometimes it happens that you come across fake companies that don’t do the job for which they were paid – or do not do the job as agreed.
Therefore, to prevent such a mistake, inquire well in advance. The recommendation coming from someone who already does business with Chinese agents and suppliers could be worth gold. In addition, read reviews of both the agencies and the specific agents you are considering working with. So, rationally evaluate all aspects of your future cooperation before you even start it.
2. Insufficient and poor communication
When you enter into negotiations or business with a Chinese sourcing agent, it is very important to achieve good communication. That means you can clearly and precisely communicate with the person who will perform for you the search for manufacturers and products – or deal with price negotiations and other things that fall within the scope of this business. Poor communication can often confuse you about how to pay your agent or suppliers through wrong orders, delays – and even termination of business. In order not to put yourself in such a situation, communicate via email. That will always leave a written trace of your agreement. In addition, express yourself clearly, directly, and precisely, so your agent can understand what exactly you are requiring.
3. You don’t build strong relationships with your sourcing agent
Although many people would say this is just a business relationship – this is wrong. Your agent is not just your associate. Your agent should be your right hand in China, where you get your goods from. Therefore, it is necessary to have a closer relationship based primarily on trust. Everyday personal communication via Skype or some other application will allow you to see each other while talking. If you can travel, it would be a good idea to meet your sourcing agent, as well as your suppliers, in person. Personal interaction is significant because you can make a better impression on the people you work with – both sourcing agents and suppliers.
4. You have not agreed on the exact method of payment with the sourcing agent
The method of payment is of the utmost importance in any business relationship. You must determine the method of payment in advance with your Chinese sourcing agent. Will it be a fixed amount or maybe a percentage? Although it sounds almost impossible, it often happens that we overlook such things in the contract. However, this is a rare case, especially if you do business with companies that are already experienced in the field of such cooperation.
The Bottom Line
Dealing with Chinese sourcing agents is of great importance to you, but above all to your relationship with your suppliers. So we hope you avoid some of these common mistakes.