When it comes to bringing overseas products into Australia, companies usually have two options available to them: self-manufacture or purchase from an outside vendor. When purchasing from an outside vendor, the most common path taken is to use a sourcing agent in china to find and negotiate with factories in countries such as China, Vietnam, more. These fees are charged by sourcing agents vary based on several factors, so knowing which fees you can expect up front can help you save money and time in the long run when working with a factory abroad.
Here are some of the most significant factors that affect the cost of china sourcing agent fees.
Experience and Specialisation of the Sourcing Agent
The experience and specialisation of your sourcing agent is crucial. There are a number of different factors that can influence how much you need to pay, including their knowledge of particular industries, what products they handle regularly and how many suppliers they work with in that industry. It’s important to ensure you find an experienced agent who has solid relationships with a variety of trusted suppliers. This will help lower costs for you—the more trustworthy a supplier, after all, the more likely they are willing to give a discounted rate.
One-Time Agency Fee for Getting a Supplier
A sourcing agent will typically charge a fee for finding, approaching, and getting you a supplier for your product. This one-time fee may range anywhere from $500 to $2,000 per supplier. The higher end of that spectrum is more common in China, where there are more suppliers to choose from than other countries.
Manufacturing Management Fee
When you hire a sourcing agent for china to help you import goods, there are a number of fees you’ll need to be aware of. One that gets negotiated in advance is a sourcing management fee, which generally ranges between 1-3% of your total order value. This fee covers all of the expertise and services provided by your agent throughout the sourcing process.
Every country has different standards for products. If your products don’t pass inspection, then you won’t be able to sell them or if they do, you may have to reduce your profit margins. To cut down on costs and make sure that your products will be up to snuff in each destination country, the sourcing agent will follow a QC procedure and it can vary from one agent to another. The cost of quality control can be added to the sourcing agent as well.
Commission for Procurement
A procurement agent’s fees are generally calculated as a percentage of total contract value. This fee, called a commission for procurement, can be defined as an amount per unit or an amount per transaction. Commissions for procurement are typically 5%-8% of total contract value but could be more or less depending on your needs and preferences.