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Should You Hire a Chinese Sourcing Agency?

China exports all kinds of products. After all, China is a mass manufacturing might. Many economies, big or small, are very much dependent on the products that are imported from China. If you are also considering importing goods from China, or have been importing for a while, would you consider hiring or partnering with a sourcing agency for your help? Or, would you like to go through the whole process all by yourself?

If you are willing to go through the whole purchasing process by yourself, then you may like to know how you can identify a real manufacturing company in China. And once you find an appropriate manufacturer or supplier, you would definitely want to know if they are even a legit company to deal with without legal or logistic issues.

A sourcing agent is your friend in need
A sourcing agent is your friend in need

Why Would You Even Consider Hiring a Sourcing Agency at First Place?

For many, finding the required product, choosing the right supplier, and getting through the supplier verification process is sometimes a tedious and a difficult job. You may want to get rid of this tiring effort.

Or, you may not have much time to spare before you would want your store be filled with the desired products.

Or, you may even don’t have much confidence in your skills or findings regarding your specific supplier.

Whether you are a novice importer, or have been importing from China for quite some time, you will find these questions at some point in your business. These issues are very much experienced by novice and seasoned importers alike. Naturally, you would want to ensure the safety of your investment.

In such cases, it sounds appropriate to transfer the burden of end to end sourcing and delivery on the hired shoulders of a sourcing agency. This arrangement will allow you to turn your focus away from dealing with the sellers all by yourself. In doing so, you can spend more time and energies on the selling part of your business and handling local business issues.

Many people are already looking for someone local for help

Most companies or small business owners rely on someone local in China to assist them in sourcing and closing a deal. Throughout my 16 or so years of stay in China, many of my friends have approached me for assisting them in dealing with their supplier. Many people contact me for the same purpose through social media or through references, just because I am here.

If you are dealing with a company for the first time, you would want to make sure they are operating legally. Off course, you would want to save your skin… and money, and do not want to be fooled by some company thousands of miles away.

The local agencies or sourcing companies in China can help you in doing these tasks for you. Off course they charge for their services, but that is an expense sometimes worth making.

How a Local Agency or a Product Sourcing Company Is Helpful for You?

As they say, there is no substitute for experience—and this benefit alone could be worth spending the money.

Think about the following reasons for hiring a product sourcing company.

Sourcing companies know their local market like the back of their hand.

Using their knowledge, they can potentially propose a much better plan for your business for you to use.

A sourcing agency typically have close ties with the local suppliers.

They may have worked with several suppliers and manufacturers in the past. Therefore, they can get a better deal most of the times because of their relationship with them.

They speak the local language.

The largest barrier in dealing with Chinese companies for most foreigners is the inability to speak the local language. When you hire a sourcing agency, the language will not become a barrier in dealing with the suppliers and performing negotiations. You do not want miscommunication in getting through your requirements. The sourcing agency can easily verify supplier’s documents that are typically in the local language.

They probably have heard every question multiple times that you have to ask.

Given their experience with other clients, they are almost always ready to satisfy your requirements and provide appropriate support.

They know the current dynamics of the market that you would probably not know if you are new.

For example, what regions are known for what kind of products, how suppliers can fool overseas buyers, and so on. This is an invaluable knowledge that can save your business from a setback.

They may have other clients who are looking for the same product as you.

If that is the case, then they can place a bigger order, and can get further discount from the supplier.

They know the best methods to negotiate with the companies and manufacturers in China.

They know the practices and customs of the local market. After finding the right manufacturer and knowing the right price, they use the right negotiation techniques to help you get the lower price without compromising on any of your requirements.

They save a lot of your time.

They have the right knowledge and specialized skills in procurement, and therefore can be more efficient in securing a deal.

Sourcing companies usually have a network of agents all over the country.

They can utilize their network and connections to serve your needs.

What Services Do They Usually Provide?

As a matter of fact, a product sourcing agency can provide many different services based on customers’ needs. You can an agency for the whole sourcing process, or only for the selected part of the job.

Consider these agencies as your one stop shop for your business in China.

They generally provide the following services.

Sourcing a product for your business

If you are looking to import products, but have no idea where to start. Or, you do not want to spend your time in researching and verifying the appropriate supplier. You can seek help of a sourcing agency in that case. The sourcing agency would provide you the end to end services, from finding the appropriate supplier, to shipping your products to your destination.

Helping in selecting the appropriate supplier for your products

You can hire a sourcing agency only to find an appropriate supplier for your business. You may want to take it over from there and further deal with the company by yourself.

Auditing factory, vetting and verification of supplier

You may have already found an appropriate supplier for your business, but you are not sure if they work legally in China and can really provide proper services. In such a case, you can hire the services of an agency to perform factory audits and verify the supplier’s credentials.

Evaluating product samples before issuing purchase order

You have already selected a supplier and are satisfied with them. Whether you want to avoid hefty overseas shipping charges on samples for some reason, or having time constraints, you can hire the agency to evaluate the samples for you and provide you a report.

Following up on orders

After you have placed the order, the agency can help you keeping an eye on the schedule. They can keep following up on orders as and when you require them.

Testing and inspecting your products before shipping

You can hire a sourcing agency to test and inspect the produced goods to make sure they are according to your requirements. They usually perform product inspection according to industry standards.

Handling shipping and logistics

The product sourcing agencies usually have relationships with several different freight forwarders. They coordinate with your supplier and freight forwarder, and utilize their contacts to send your shipment using the best way.

Providing other value adding services

Many sourcing agencies provide additional services; such as, private labeling, customizing the product or its label or its packaging, and so on. They also provide drop shipping and fulfillment services directly from Mainland China.

What Would They Usually Charge You for Their Service?

The sourcing agencies have different payment and compensation methods to charge for their services:

Price-based flat rate for buyer

This service fee is typically the percentage of the price of the goods purchased. The agency negotiates the price with the supplier on your behalf, and typically charge you between 1 and 10% of the total price. This method is completely open and transparent to you, and keep you involved in every aspect of the purchase process.

Price markup

The agencies with this method act as independent trading companies. They source the product for you, and provide you a price by adding their own commission on top of the product price. In this case, you would typically not know the actual price and source of the product. However, they make sure that all your requirements are met. They negotiate with the supplier and make all the arrangements according to your needs. That is, they take the complete responsibility of purchasing and exporting the product to your destination as per your requirements.

Purchase commission from supplier

This is the commission in percentage that the agency charges from the manufacturer or supplier. They usually team up with the supplier and act as their selling agent.

Commission from both buyer and supplier

The agencies with this method take commission from both parties. This method allows them to keep the commission low for both supplier and the buyer. For example, if they charge only the buyer or the supplier, they would charge 8% commission of the total amount. But if they charge both parties for their services, they would charge 4% each to earn that same 8% commission.

Charges for miscellaneous services

The agencies would charge a different services charges for other services that they offer. Such as, supplier verification, testing and inspection, and so on. These charges may or may not be based on the value of the product.

So Which Sourcing Agency Should You Partner with?

Are you more concerned about the source of the product? Or, quality and price of the product is more of your issue?

Consider the different services and methods mentioned above. Think about the services you need to hire, and the method that would suit you for the business. And based on that, find a sourcing agency that works with that mode.

A particular point of concern is that that a sourcing agency that charges commission from the supplier may have a biased interest towards the supplier. If an agency is charging a low fee for their services, there is no guarantee that they would not charge the supplier as well. When they do so, they may not work in the best interest of the buyers.

For example, when looking for suppliers, the agency successfully finds a supplier with the perfect match, who fulfills all the requirements. However, the supplier does not agree to the commission terms of the agency. In that case, the agency would let go that supplier in favor of the one who would pay them more commission.

This means, the sourcing agency that you hired to serve your interest, may compromise on some requirements when purchasing. They go ahead with the less qualified supplier. Why? Because that supplier pays them good commission.

That is why an independent agency that serve your interests and fulfill your requirements would always be a better choice. They charge relatively higher commission, but that commission would be much lower than what you would spend on traveling to China and doing the whole process by yourself. And traveling to China in the times of pandemic is not so convenient.

Conclusion

There are times when you need some “boots on the ground” to help you with your business with Chinese companies. You can hire a sourcing agency for that purpose, to help you with the complete purchasing process, or a part of the job. They provide plenty of options and services for you to choose from.

In other words, whatever you would like to do by yourself, if you were in China, they would do all that for you. At the times when you are not being able to travel to China, this indeed is a great help that you may wish you have.

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Coronavirus: Traveling to China during Global Pandemic

Whether we like it or not, the novel coronavirus, also known as, COVID-19 is reality. It quickly became a global pandemic before the world could get ready for it. This pandemic has affected our lives and has forced us to live and act in a different way altogether. This means, a new and different world has emerged from the year 2020. Nobody really knows how long this lifestyle will stay. However, experts say that it may stay for many more years to come. We have to adjust our lifestyle to cope up with the changing world.

Disclaimer: At Sesame Disk by NiHao Cloud, we welcome a diverse range of options and point-of-views. This post contains useful information for entrepreneurs. However, the following should be noted:
– In general, this article does not include any medical or legal advice. If you require any medical or legal advice, you may consult a relevant doctor or a lawyer specific to your case. International and your local authorities may also have issued some advice which you may follow.
Some of the points noted in this article may reflect the views of the writer only, and may not necessarily reflect the views of our team and the company.

Most countries are struggling in controlling the spread of coronavirus. However, no country has been able to control its spread better than China. This is a glaring fact, and denying this fact would be lying on its face.

A man waiting for his flight during coronavirus global pandemic
China took the first hit from coronavirus and bore huge losses to economy

Since China was the first country affected by coronavirus, there was no previous data or experience available on how to respond. That was why, China took extreme steps to control the spread. The whole country of 1.46 billion people was locked down for about four months. This was only done in efforts to control the transmission of coronavirus. Those four months included the most important time of the year in China, when families get together for the Chinese New Year, and businesses thrive. In the end, all those restrictions really helped the country in putting the brakes on the spread. And that too in a very short time.

However, the imposed lock down had a great toll on economy. China’s economy contracted 6.8% in the first quarter of 2020. During this time, some 460,000 Chinese firms closed. This is the first ever contraction recorded since the reforms were adapted by the end of Mao’s era in late 1970s. All these losses to businesses and economy, forced China, like every other country, to apply restrictions on entry and exit for travelers. However, despite all these restrictions, a recent outbreak of coronavirus happened in Nanjing city of China on July 20, 2021. This outbreak was of Delta variant, but brought under control within a month. This recent outbreak proved that slightest of oversight could be disastrous for the country. Therefore, China still remains on a high alert in avoiding any new spread of coronavirus.

So Who Can Travel to China?

China closed its borders to nearly all travelers on March 28 last year, when the pandemic started spreading throughout Europe. Travelers with visa issued after March 28 can enter China on those visas.

China eased its restrictions after almost a year in March 2021 for select number of travelers from 23 countries. Starting from March 15th 2021, China is providing facilitation for reunion, work, and business visa applicants. However, all applicants are required to be inoculated with COVID-19 vaccines produced in China and obtain a vaccination certificate.

So, now you can travel to China in one of the three ways:

  • If you are holding a valid Chinese residence permits for work, personal matters, and reunion
  • If you are holding a diplomatic, service, courtesy, or C visa
  • Or you may apply for a new Chinese visa only for work or emergency humanitarian needs. The humanitarian needs could be such as visiting a seriously ill family member, or getting urgent medical treatment. If you already hold a valid old visa, your previous visa will not be cancelled.

How Traveling to China During Coronavirus Global Pandemic is Different than Before

The entry and exit restrictions in China vary by traveler’s location and are based on a number of factors. These factors may include traveler’s nationality, travel history, residency status, and/or vaccination status. These restrictions could also vary between different cities and provinces of China.

Let’s take a look at each of these requirements a bit closely.

Nationality and Travel History

Allowance to enter China depends on the current situation of coronavirus in your country, or the countries you have been to in the recent past. This includes the countries of your layover where you changed your flight to enter China. Chinese authorities may or may not allow entry if you are not flying directly from your country of origin to your destination in China. In most cases, if there is a hitch in your itinerary, the airport staff would communicate the possibilities before boarding. Or, in worst case, the airport staff may even deny you from boarding.

Visa Services and Vaccinations

Various Chinese embassies and consulates have announced an easing of visa restrictions for persons who can prove they have been vaccinated against COVID-19 with a China-produced vaccine. This means, all foreign nationals holding proof of vaccination with a China-produced vaccine, and their family members, may apply for a visa to travel to Mainland China. Also, now they may apply without producing additional documentation such as letters of invitation. Currently, Chinese embassies are only accepting applications for the resumption of work or for other permitted activities, excluding tourism.

COVID-19 Tests

The requirements for negative COVID-19 nucleic acid and IgM serum antibody tests are stringent enough for slightest of causes. If you are not vaccinated, but your IgM serum antibodies level is higher than the set criteria, then this may mean you have recently been infected with novel coronavirus.

The airline staff would require you to present the test certificates when boarding the flight. You must take the The negative nucleic acid and IgM serum antibody tests at the designated labs or institutions within the last 48 hours of departure. Some of my friends informed me that they did receive the negative nucleic acid test, but their IgM serum antibodies were higher than the required criteria, and therefore they were denied traveling.

Health Code

China has introduced a “health code” for foreigners traveling to China. The health code is an effective public health managing measure used in China’s anti-epidemic battle based on technology. This health code records dynamic information about personal health, including normal respiratory symptoms and nucleic acid test results. You may contact your nearest Chinese embassy or consulate for the guidance on how to get this health code for travel.

Flight Booking

For many countries, the flight operations are still restricted. As a result, most international routes are still not operating as they were operating before the pandemic. These restrictions on flights have caused the ticket prices to rise to extreme levels, and out of the reach of many. This price hike and flight schedules have generally made it difficult for most passengers to find their ticket on a flight.

Quarantine

You must undergo testing-on-arrival for COVID-19 and a mandatory quarantine. Some regions in China demand 14 days of quarantine, while others require 21 days. This may take place at a location designated by government (usually a hotel) or at your home. The stay at a hotel would cost you anywhere around 6000 Chinese Yuan (about $928) to 12,000 Chinese Yuan (about $1856), depending on the hotel’s star rating and services.

Things to Consider Before You Travel

  • Traveling Cost: Traveling during coronavirus global pandemic is expensive. Your traveling cost may vary depending on the price of your ticket, nucleic acid tests, quarantine requirements and the food cost during quarantine. Also, if you get unlucky to catch coronavirus during travel, the treatment for COVID-19 may also cost you some extra money.
  • Travel itinerary: Keep your travel duration as short as possible and avoid layovers, to avoid getting in contact with coronavirus during travel. If you can get on a direct flight from your country of origin to your destination in China, then that should be your best choice.
  • COVID-19 SOPs: Keep in mind the general standard operating procedures (SOPs) of wearing masks, maintaining social distancing and frequently applying hand sanitizer or wiping your hands off with alcohol based napkins. You must also follow airport and airline staff’s advice during travel to avoid unnecessary delays.
  • Quarantine Requirements: Obtain the latest requirements for quarantine before you plan your trip. It is also good to keep yourself updated with the latest situation before boarding. This will allow you to adjust your plan accordingly, if required.
  • Vaccination Certificates and Negative Nucleic Acid Test Reports: These are must to have during travel.

Best Practices

  • Always remember to consult the latest official information before making booking decisions.
  • Obtain your vaccination certificate and take the negative nucleic acid test 48 hours before your departure.
  • It is always good to consult your nearest Chinese embassy or consulate office for local information and requirements regarding boarding and departure.
  • You should also check with your airline regarding arrival procedures and quarantine requirements.
  • Before you plan your trip, you may also like to talk to your host, friend or some acquaintance in China for the local requirements and practices.

To prepare well for your travel, the more you know, the better it will be.

What to Expect after Completing Your Quarantine for Coronavirus?

After you complete your quarantine period in China, you will be allowed to carry on with your business. If you are an entrepreneur and traveling to China to work on your business, you may like to take a look at our article for the challenges you may face in your business.

As of August 27, 2021, about 56% of the population has already got the vaccine. Life in China is largely back to normal, but things can change fast in China. Regional lock downs are imposed every time there are new outbreaks of the virus.

The government still emphasizes on wearing face masks in public. Traveling in public transportation, including airplanes, trains, subways, taxis or public buses require you to show your QR health code and wear face masks all the time. All the restaurants, shopping malls, parks or other public areas also need to see your health code to allow entry.

In China, different cities have also maintained different restrictions on travel. The government has marked each city as Low Risk, Medium Risk, or High Risk area, depending on the current coronavirus situation. If you plan to travel within China to different cities, you must check with the local authorities regarding the requirements. The requirements may include a COVID test taken with the last 48 hours, vaccination and/or the green QR health code.

The color of the QR health code may change depending on the locations you traveled or people you met within the last 14 days
  • Green: If your health code displays in green color, then it means that you are not formerly or currently confirmed or suspected coronavirus case. If you get the green color, it means you are allowed to travel through local transport. You can also enter any public area, business (such as restaurant) or a public building (such as shopping mall).
  • Yellow: If your health code displays in yellow color then it indicates that you have been in contact with confirmed COVID-19 patients. It also indicates that you are having fever, cough, sore throat, and/or shortness of breath. If your health code is yellow, then you will have to quarantine as indicated by the health authorities. You will also need to check your temperature at least twice a day, and require to avoid crowded places.
  • Red: If your health code displays in red, then you are a certain or presumed coronavirus case. This may also mean that you have been in close contact with confirmed COVID-19 patients, including people who confirm in the health declaration that they have in fact been in unsafe contact with a confirmed coronavirus case within the past 14 days.

Disclaimer

The travel and other policies change quickly, depending on the current situation at large. You must double check with the local Chinese embassy, consulate or China visa center to ensure your trip.

The traveling restrictions and policies only apply to visa processing services offered by Chinese embassies and consulates in select locations. You must double check with your local Chinese embassy or consulate to determine if you are eligible to apply for visa, and information regarding travel requirements, quarantine and so on.

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