What is a Sourcing Company? What do Sourcing Companies do?
What does a sourcing agent or sourcing company do, and how do they help companies find suppliers overseas?
A Sourcing Company or agent helps a company find low-cost sources for products and supplies of a certain quality or attributes. Some may represent a few select factories or serve multiple companies. For example, at Cosmo, we have no exclusive contracts and search for the best factories for a company.
How do sourcing companies work with clients?
Sourcing companies and agents work to get clients the best price for whatever product they need and meet quality standards.
They ensure the factory or supplier can produce and deliver the product promptly. Knowledge of multiple languages, including local languages and business customs and norms, is essential. A sourcing company or agent should have good business skills and the ability to manage multiple projects simultaneously. Sourcing companies should be expected to create long-term, stable, valuable contracts and relationships with suppliers. Both sides should be happy to work with a good sourcing company. At Cosmo, we pride ourselves on creating such relationships.
What makes a good sourcing company?
A good sourcing company assesses the client's needs and finds factories and suppliers that best meet them, resulting in a purchase order. Companies and individuals want a sourcing company or agent to locate a company they can work with overseas. Cosmo and other reputable companies can also inspect a company in person and confirm that they can meet its needs.
In addition, Sourcing companies should be able to address ethical concerns, including working conditions and pollution. Cosmo will deliver a detailed report, including photos and copies of necessary licenses and certificates. Cosmo is committed to ensuring that our factories have decent working conditions and adhere to any environmental standards the client requests. We operate on the belief in a fully transparent supply chain.
Traditionally, with sourcing companies, pay is on a commission basis–an average of 3-5% of the purchase order. At Cosmo, we offer a flat rate pricing plan for most items, designed especially for people who sell items on Amazon FBA (Fulfillment By Amazon). While it's common for sourcing companies to hide their supplier's contact information, Cosmo offers transparency and the ability to pay the factory directly. This creates open communication because our fees are billed separately. By billing separately, you know the exact amount to your supplier and that you are getting the best possible price.
What does a sourcing company do?
A sourcing company's primary purpose is finding manufacturers to make your product. A sourcing company should get quotes that include:
Price
Cost of the samples
Lead time (time from the first payment to shipping)
MOQ (minimum order quantity)
What info should a sourcing company get?
What differentiates a sourcing company from a trading company is that a sourcing company introduces you directly to the manufacturer, while a trading company acts as a middleman. A sourcing company needs to provide all details about a factory, including the Company name, contact person's name, address, email address, phone number, and more.
What additional services can sourcing companies provide?
Sourcing companies should be able to arrange factory visits, assist with QC, and connect with third-party services that can do inspections, testing and certifications, and freight forwarding.
Sourcing companies and sourcing agents should be able to deal with issues, including import/export duties, taxes, tariffs, and any local and international norms.
A sourcing agent or company should be able to move goods quicker, cheaper, and with less risk through the entire international supply chain. This is also important in countries with large bureaucracies to reduce the red tape and avoid troubles in countries with rampant corruption.
Ultimately, a sourcing agent should save a company more money using them than they receive. For example, Cosmo believes we should deliver at least five times our value. So, if you are paying us $1,500, we should be expected to save you at least $7,500 on a total project cost. A good sourcing strategy should seek advice and quotes from multiple sourcing agents and companies to find the best one to serve you.
Cosmo Sourcing // Go Straight To The Source!
Do you want our team to find you a great manufacturer, get quotes, and introduce you directly to great suppliers?
Our Simple Sourcing service is designed to do everything to turn your idea into a shipped product. Our services are designed to do everything to take your idea, turn it into a product, and ship it to the final destination. Cosmo can do everything from creating a product spec sheet to validating, sourcing, ordering, evaluating samples, arranging inspections, finding freight forwarders, quality assurance, negotiations, and shipping. We aim to handle every single step of your business in Vietnam for you.
If you start a new business, finding products and suppliers for your products is one of many things you need to handle. Our services are designed to handle every part of your business in China and Vietnam so you can focus on the rest of growing your own business.
We have helped clients from Fortune 500 companies, brick-and-mortar stores, FBA sellers, and brand-new businesses. So don’t hesitate to contact us and let us know how we can help you.