Sourcing and Import Agencies – why use one?

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So you”re thinking of importing products from China.  Or from India, or the Philippines, or somewhere else.  Why use an import agency?  Why not just go direct?  Wouldn’t that keep the supply chain shorter, and cheaper?  We at Hornet don’t think so!  We admit we may be biased, but then again, our satisfied repeat clients agree with us that this is the best model.  So let’s explore how using a sourcing and import agency can benefit you.

Experience

The biggest benefit I could tell you is simply experience. An import agent will have plenty of experience on the global front, experience that most small biz owners simply don’t have. These folks are specialists and have know-how about market conditions, pricing, local marketing, documentation and the like.

That’s a direct quote from an (US-based, but still relevant) about whether to import direct or use an agent.  We and most of the other posters agree.

Unless you’re big enough and import enough product to employ someone with specialist expertise, we can handle the whole sourcing, quality control and importing logistics far more effectively.  We know how to write a cast-iron specification, contract or PO; our existing networks mean we can find possible suppliers and get samples more quickly; we know what freight options are available and practical; we understand customs duties and processes.  And because we’re doing this full-time, we’re always up-to-date with changes.

Independent Presence on the Ground

Some things, like factory audits, quality control and pre shipment inspection, can”t be done via the web.  If anything does go wrong, it’s much easier to fix it when there’s someone right there, right away.

Hornet have our own offices in China.  Our staff, all of whom are English-speaking Chinese nationals, have strong local networks including many factories, so they can find a potential supplier for you quickly.  However, they are employed by us, a sourcing company rather than a factory, so they act independently to look after our interests and the interests of our clients.

Language and Cultural Understanding

Especially important if you want to import from a country such as China, with a long trade history and a way of doing things very different from that which Westerners take for granted.  Check out this article on guanxi for one example of how things differ.  For a more practical example, take lunch.  All Chinese do.  And they take a full hour at least, usually more.  But we know that, and we build our work hours around that lunch break and the time difference, so vital communication doesn’t get delayed.

Negotiation Ability

Local staff with an understanding of the local business culture and economic situation are by far the best equipped to negotiate a good deal.  It’s not simply a matter of haggling over price – they are far more likely to find trade-offs where for example a minor modification may lead to a cheaper manufacturing process without affecting quality control, or where a change in volume means the order is better suited to a different size factory.

And when it comes to shipping, you benefit further from the import agency’s pre-existing relationships with freight forwarders and other logistics suppliers.  The agency’s total traffic from you and other clients makes them more important to the suppliers and helps improve rates and service.

Quality Control

“When you give orders to a reliable and suitable supplier, everything is easier. Unfortunately, the majority of people you will contact will not give enough attention to your orders or are not a good fit for your business.”

You can find a supplier on the web, but how do you really know what their product is like?  Even if they send you samples, are you sure the final product will be the same quality?  Using a sourcing and import agency like Hornet, with local presence and existing relationships, minimises the risk of quality issues right from the start.  What’s more, our staff in China can offer factory audits, quality control and pre shipment inspection efficiently and cost-effectively.  Imagine if you don”t discover quality issues until after you import the product to Australia.  Or you can fly someone out to China two or three times to inspect and approve your product quality, but that”s expensive and time-consuming too.

Opportunity Cost

Of all the benefits, this may actually be the most important.  Unless you were hired specifically to deal with sourcing product, do you really want to spend your time handling the thousand details of product specification, quality control, contracts, import, freight schedules, warehousing and fulfilment?  Or would you rather leave that to your import agency so you can focus on your main role and make much more difference to the success of your business?

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May 29th 2013