What is a buying and sourcing agent?
A Buying or a sourcing agent is your local partner who will help you with your entire 360 degree sourcing needs in the local country. A sourcing agent can help you with product development, identify vendors and factories, packaging, logistics , quality assurance and most importantly coordination with vendors and factories. A sourcing agent acts like your local office in the country.
A buying or a sourcing agent is often called with different names across the globe such as purchasing agent, factory representative, procurement agent, sourcing consultant.
What are the benefits of using a buying and sourcing agent?
A sourcing agent has many benefits and in each stage of the sourcing process.
Large Network of factories and vendors: A good souring agent has a large network of factories and vendors and can help you identify the correct one. Someone working with the large factories may not be the best strategy.
Social and Compliance Audit: Often buyers want a social and compliance audits to know about the factories and vendors. The audits and due diligence can be conducted by an agent.
Know how of manufacturing processes: An experience buying officer or a consultant has a team of buying officers often called as merchandisers which understand the manufacturing process and can navigate can help recreate the buyers designs.
Knowledge of the manufacturing hubs: India has a number of manufacturing hubs for specific kind of products the local know how is very important to get the right product and pricing. Panipat and Surat are textile hubs, Moradabad , Saharanpur and Firozabad are for handicrafts, Alleppey for coir products
Negotiations: Negotiating the right terms, pricing, [packaging and lead times is a very critical part of the supply chain process. A buying agent has the experience and the knowledge to get the best deal for both the buyer and supplier.
Conflict resolution: if ever there arise any conflict in the shipment a good agent helps you get it resolved and work out a fair settlement which in other cases may not be possible.
How to choose the right buying and sourcing agent
Choosing the right agent is an important decision you have to make. There is no perfect sourcing agent but we have listed some very important factors to consider:
- Integrity
- Experience
- Team
- Easy Communication
Types of buying and sourcing agents
India has only a distinction on the types of sourcing agents according to the industry exposure. Some buying agents specialize in garments, hard goods, industrial goods, sports merchandising etc. Even though there is a overlap the only distinction is the industry they closely work with.
Services offered by buying and sourcing agents
Sourcing agents usually offer the 6 main services:
Product Development
Vendor and Factory Identification
Quality Assurance and Quality Control
Logistics Support
Social Compliance and Audits
Communication and Coordination
How to work with a buying and sourcing agent
Try to speak to 5 / 6 buying and try to finalize the one who can deliver a comprehensive service. Most buying agents would work on a commission plus a fixed fee or a commission only. Try and ask for their case studies and partnerships in the past.
Case studies of successful partnerships with buying and sourcing agents
Conclusion
The future of buying and sourcing agents
There is a lot of discussion about the digital sourcing platforms such as Indiamart, TradeIndia taking out the business of procurement agents in India just like Alibaba has disrupted the supplier relationship management in China. But statistics have shown that the demand more reliable sourcing partnerships has increased multifold. The local knowledge and the on ground partner in the country is an important factor which global companies need in order to build a reliable supply chain.
Tips for finding the best buying and sourcing agent
To find the best buying agents it is very important to understand the exact need of the business and any value addition services required. If your specifications are cleary mentioned it would be easier to match with your partner.
The best places to find a reliable agent are:
- Reference
- Trade Fairs
- Your suppliers
There are mainly 2 types of buying agents: one would be a digital procurement platform and one would be a comprehensive on the ground partner. The choice of picking one would depend on the procurement and sourcing needs.
A sourcing agent mainly offer the following services:
Product Development
Vendor and Factory Identification
Quality Assurance and Quality Control
Logistics Support
Social Compliance and Audits
Communication and Coordination
The charges of the buying agent would depend on the complexity of sourcing, most buying agents work on commission on the FOB pricing of the product. For Quality assurance and quality control usually they charge per hours basis. The hourly charge would depend on the experience of the team.
The best places to find a reliable agent are:
- Reference
- Trade Fairs
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Buying and Sourcing Agents: Everything You Need to Know
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Buying and sourcing agents can help businesses save time and money on their procurement costs. Learn more about the benefits of using a buying and sourcing agent, how to choose the right one, and how to work with them effectively.
