sourcing company

Sourcing Company VS Sourcing Agent : Who Are They? How They Work?

Nowadays, under the trend of globalization, sourcing companies are playing an increasingly important role in the management of international supply chains. Sourcing companies provide multinational buyers with complete sourcing solutions or partial sourcing services, saving buyers a lot of time and cost. Sourcing compaies are particularly important for buyers engaged in e-commerce. However, many buyers are still confused about the sourcing company. Therefore, I have sorted out the most concerned and confused questions about sourcing company / sourcing agency, and gave the most objective answers.

1. What Is A Sourcing Agent?

A sourcing agent is an individual or organization that purchases goods on behalf of the buyer. Services provided by sourcing agents can include finding reliable suppliers, price negotiation, order follow-up, production monitoring, quality control, pre-shipment inspection, transportation and logistics, etc.
A sourcing agent is usually a single person, and he/she usually works in a small office or a home office.

2. What Is A Sourcing Company?

Sourcing company, also known as sourcing agency. A sourcing company is supported by a professional sourcing agent team and organized quality control, warehousing, planning, logistics and customer service departments. They can integrate supplier resources more effectively and can provide services to many different buyers at the same time.

Souring companies in China are generally located in large cities in the Yangtze River Delta and Pearl River Delta with convenient transportation. For example, most Chinese sourcing companies are located in Shanghai, Guangzhou and Shenzhen.

3. Advantages Of  A Sourcing Company / Agent

Find suppliers who offer a competitive price and good quality

A good sourcing agent can help you find capable and reliable manufacturers. Because a good agent/company has accumulated a lot of qualified factories’ resources already that you may not find online.

Improve sourcing efficiency

A local sourcing agent/company can help you overcome barriers of culture and languages. He knows exactly what you want, and negotiate with suppliers about the details of the products, and in turn deliver the message to you in fluent English, which greatly reduces the communication cost.

 Reduce your risk of importing from overseas

A good sourcing agent/company must be experienced in dealing with product production, quality control, compliance certifications, import and export process rules, and international shipping.

4. Sourcing Company VS Sourcing Agent: Comparison

Disadvantages of sourcing agent

  • Usually a sourcing agent is just a single person, not an organization. His/her expertise is definitely not good enough to provide all the sourcing services you need. He/she may only be good at product sourcing, but not good at price negotiation or quality control.
  • In addition, the sourcing agent is usually only familiar with a small scope of products. If you need to purchase multiple categories of products, the knowledge and experience of a sourcing agent will not be sufficient covered.
  • Individual sourcing agent is only suitable for sourcing existing models of consumer products. For custom products or new product development projects, if it involves opening new molds, a individual sourcing agent will be totally incapable.

Disadvantages of sourcing company / agency

The Sourcing company consists of multiple departments, and the Quality Control department has greater power. This has led to Sourcing Company’s tendency to recommend good quality products to you, rather than low-priced but medium-quality products.

Supplier contact information

Individual sourcing agent: Individual sourcing agent usually gets a fixed salary (hourly/day), or they can pay a fixed commission for a project. Essentially, the buyer pays wages to obtain supplier information, so the agent is obliged to provide the supplier’s contact information to his boss-the buyer. The buyer will communicate with the supplier to negotiate the price.

Sourcing company: Sourcing company usually does not provide supplier information to buyers. High-quality suppliers are the resources accumulated by the Sourcing company (including those not found on Google and Baidu), which is why you can get competitive prices from the sourcing company.

However, sourcing companies are willing to take the buyer to visit the factory so that the buyer has a certain understanding of the factory’s production capacity.

5. Who Needs A Sourcing Company?

People who have no experience in importing

If you have no experience in importing and do not understand Chinese suppliers, Sourcing Company can help you and handle all the steps such as product sourcing, pricing negotiation, quality control and logistics management. With the help of the sourcing company, you will have nothing to worry about.

People who have multiple product categories to deal with

If you are looking for 20 types of products, you need to contact at least 200 suppliers and verify them. Verification of suppliers is a lot of work and requires in-depth understanding of multiple industries. In this case, the sourcing company can complete the tedious work more efficiently.

Small Businesses

Small business usually has not established a purchasing office and QC team in China. Due to time difference and cultural differences, it cannot manage the supply chain in a timely and effective manner, especially in response to emergencies. Sourcing company can serve as a powerful complement to its supply chain management team and become its eyes and ears in China.


Startups need an overseas supply chain team to help find reliable suppliers to promote the progress of the project and find manufacturers in China with high quality and good prices. Sourcing company can perfectly meet the needs of its overseas supply chain team. Sourcing company has a complete organizational structure, and its engineering team can exceed the capabilities of a single sourcing agent.


Crowdfunding company

Crowdfunding companies need reliable and agile manufacturers to advance the progress of crowdfunding projects. No country in the world has a complete supply chain and industrial system like China, as well as a large number of reliable factories. Sourcing company is portal for international buyers to connect the expertise and resources of the manufacturing industry in China.

Large retailers, supermarkets

6. What Services Do Sourcing Companies Provide?

  • Product sourcing
  • Price negotiation
  • Factory audit
  • Select supplier
  • Factory Audit
  • Lab testing
  • Order follow-up
  • Pre-production inspection
  • During-production inspection
  • Production monitoring
  • Pre-shipment inspection
  • Container loading monitoring
  • Warehousing service
  • Logistics management

Specific services for e-commerce / eBay / Amazon sellers

  • Private label your products
  • Do Lab testing  –ensure your products comply with the regulations
  • Affix FNSKU sticker on gift box and FBA label on carton box.
  • Manage shipping directly to Amazon FBA warehouse at very low cost
  • Provide professional product photos on your listing
  • Periodically check customer reviews on Amazon and work with suppliers on quality issues accordingly.

7. How much do sourcing companies charge?

In China, sourcing companies usually charge 5%-10% of the order amount, depending on the order amount. The larger the total order amount, the lower the charge ratio.