Business Productivity

Benefits of overseas product sourcing agents

- November 11, 2014 2 MIN READ

The large retailers do it. You can too.

When those in business start looking at sourcing their products from overseas, quite often the initial thinking is that it is better (read: cheaper) to deal directly with a factory, because the concern is that using a “middle man” will add additional cost.

There can be some truth in this thinking, but there is much more to sourcing than looking solely at the unit price of the goods you intend to buy.

The largest retailers in the world use third parties to assist with sourcing some of their products. In fact, the very largest retailer does it, and I know people who have sourced products for them, even though the retailer has thousands of staff within their worldwide buying offices.

I own a sourcing company, so sure, I have an interest in people using companies like mine to assist them. Well, not really. I don’t push my services as being the best option. They are one option, but different circumstances of every small business should dictate which is suitable for them.

Benefits of overseas product sourcing agents

For any business to decide whether using the services of a third party is better or not, it is important to break down the benefit of using a service, compared to the alternative of doing it yourself.

Want more articles like this? Check out the processes section.

Here are two questions to ponder:

  • Why does a business utilise an accountant? After all, doing the accounts isn’t hard.
  • Why does a business use a website designer? After all, there are countless online templates.

Save time

The answer is, to do these things (and do them well), takes time. It takes time to research what needs to be done, how to do it, as well as learning the most effective ways to do it that will provide a better result.

It is the same with product sourcing. You are not just paying for someone to buy the products, you are also paying for their experience.

Let me now offer a couple of examples relating to both pricing as well as experience.

Save money

If you are looking to order 1000 pieces of a product from a factory and I have previously ordered 100,000 of that same item from a factory, who do you think will get the better price usually? (On occasion, goods can be obtained at less cost than what the factory would have supplied to you.)

Make money

What is a better use of your time as a business owner? Controlling the aspect of your business that makes you money (sales and marketing perhaps), or spending time on the phone following up orders with someone half way around the world.

I could go on, but as you can see, utilising the services of a third party to assist with sourcing does not have to mean it is more expensive. Having said that, there is no blanket solution, and any decision to either contact a factory directly, or use the services of a sourcing agent or consultant should be made considering the individual circumstances of your business.

What are your thoughts on the benefits of overseas product sourcing agents?