What is an Independent Sourcing Agent?
Independent sourcing agents are individuals that have connections to a small network of factories. Entrepreneurs looking for someone to manage their sourcing in Asia will often come across these risky independent sourcing agents. A simple Google search will result in thousands of agents to choose from. Many advertise their services on gig economy websites like Upwork. A lot of them will reach out to small product companies directly through email or social media. Typically, they promote unrealistic offers about how they can find you a factory and manage your production for pennies.
If you are inexperienced with sourcing and managing a supply chain, these deals from agents will sound enticing. Occasionally working with an independent agent will result in success, but unfortunately, in most circumstances their deals are too good to be true.
Risks Associated with Independent Sourcing Agents
Nearly all independent sourcing agents guarantee the best quality product delivered to you at record speed. Some will do the work for as little as $5 per hour, especially those that are located in Asia. If this doesn’t sound too good to be true, then consider the risks associated with these discount independent sourcing agents:
- They often accept kickbacks from factories and logistics companies to generate new business
- Sometimes they represent themselves as an employee of a specific factory, when in reality they are not. This deception can be especially problematic when a production issue arises as they have no authority to correct it
- Lack deeper understanding of product design meaning they cannot offer support to those with flawed product design documents (tech packs). This results in a higher probability of receiving defective products
- Are hands-off when it comes to production process and quality control, which results in those items being handled by the factory internally. This is a problem because factories would rather approve defective products than redo them
- Do not have a legal team to establish factory quality agreements meaning you have no legal recourse to get your money back if the factory sends you a shipment of defective products
- Are typically not licensed exporters and have minimal knowledge of shipping, customs, and tariffs
They Aren’t All Bad
To reiterate, not all independent sourcing agents are nefarious. Some may become valuable partners in growing your brand. The benefit is that you could save a lot of money working with an agent if everything goes well. However, the risk of things going wrong are 90% higher than working with a well-established and trusted international sourcing company like Blacksmith International. If things do go wrong, you may end up spending much more to fix the problem than you would have if you worked with an established sourcing company to begin with.
Blacksmith International is a global sourcing, manufacturing and supply chain management company.
Contact us today for a complimentary manufacturing and supply chain assessment.