How does sourcing agent or sourcing company charge?

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This is an interesting query often asked by many people: how does a supply agent charge? There is no particular collection pattern, as there are thousands of individual global sourcing companies and supply agents worldwide. The fees of supply agents vary widely according to the scope of service, product category, cooperation methods, and value of that particular order.

Many purchasing agents or global procurement companies attract clients to lower service fees and even trial orders for the free initial level of services. Still, the buyer will eventually find that the total purchase cost (product cost + shipping cost + time cost) and not all is less. In addition to this, the buyer can get unsatisfactory goods until the agent declares that he has done a quality inspection.

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To give you a general idea of ​​fees for supply services, I have presented four general methods for charging supply agents below.

1) Fixed salary for each project or period

Many individual global sourcing agents charge a fixed salary for each product or a specific period (week/month). They typically cost less than $ 50 for each pf the product. Pretty cheap, isn’t it? And you can talk about your goods or services with your suppliers and build direct business relationships. The main disadvantage of this process is that these sourcing agents are usually not professionals as it is required, and the providers they find are generally not the most economical.

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In addition to this, some experienced buyers prefer to hire a full-time global sourcing agent for weeks or months to perform a simple supply task, such as finding suppliers as well as communicating with suppliers. If you want global sourcing from China, you can hire a full-time purchasing agent from China for about $ 800 a month to work.

2) No additional cost, but with the price difference

Many agents or personal supply companies use this billing method. Generally, in this situation, the supplier agent can provide suitable suppliers with more competitive prices or better product quality, making it impossible for the buyer to find these suppliers through conventional channels such as some B2B sites.

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In return, if buyers can find their competitive prices on their own, they will never consider these supply agents.

3) Percentage service rate is based on the product price

Charging a certain percentage of the total order amount is one of the most common methods among agents or global sourcing companies. Why, because they typically provide other services, such as production monitoring, shipping organization, quality control, consolidation, and many more. Therefore, they will charge a fixed percentage of the value of the goods as service charges.

In China, the standard service fee is 5 to 10% of the total order amount. Another point, product categories, and order size greatly influence this percentage. For instance, if the order is for some products with high demand and high price competition, such as rolled steel, or if the order price is more substantial than $ 50,000, then the service charge may be about 3% of the order price or perhaps lower.

In general, some global sourcing companies would like to accept a service fee of less than 5% for daily consumer products. There are supply companies that try to attract you with a 3% or less service charge, but find that the prices of the products are much higher than most online suppliers (such as Alibaba suppliers). Or you can get low-quality products, even if you get the right sample in the beginning.

No matter what the billing method is, it would help if you evaluated whether your sourcing agent can improve the efficiency of product sourcing, reduce the total cost of purchase, and guarantee the quality of the products, e.t.c.

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Harshvarshan Jha
Harsh Vardhan Jha is an Indian business blogger. He believes that Content and Social Media Marketing are the strongest forms of marketing nowadays and also know how to work on. You can contact him...

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