What are Sourcing agencies all about?| Pangea

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I’m sure many of you have heard the term sourcing agency, and might even know what it is used for.

However, I doubt that everyone knows exactly why sourcing agencies are important to the product sourcing process as well as your sourcing business.

This article will discuss some of the key benefits that sourcing agencies provide to companies when they decide to use their services.


What are sourcing agencies all about?


Here’s how you could run sourcing from your own company: it would take up a great deal of your time (and money), and you probably wouldn’t get the results you’re looking for because sourcing is best left to experts.

Sourcing agencies are good choices for you.

So what are sourcing agencies all about? A sourcing agency is an organization that provides sourcing services to its clients.

It evaluates products, locates product manufacturers and manages the contract manufacturing process for their clients.

Sourcing agents often find specialized manufacturers of technical products from countries where it would be difficult for a new company to find them or establish good relationships with  them.

These sourcing agencies have very good contacts with suppliers and they can usually deliver you a whole manufacturing package (product design, PCB design, sourcing of components and parts which are best for your product – i.e. getting the right sourcing from many different sources).

Sourcing is the process of finding a supplier for a product that satisfies your requirements. There’s nothing new about sourcing – it ‘s just the way business has been done since trade began.


The market of sourcing agencies

It should be noted that sourcing agencies are not very common in countries outside of Southeast Asia and China. This is because sourcing agencies typically exist to provide services only for sourcing in those countries, as they have a built-in customer base there.

Today, sourcing agencies are found mostly in South Korea, Japan, Malaysia, Singapore, Taiwan, China and Vietnam.

The most common sourcing agency is the sourcing agent found in China. They can be found in nearly every city of any size throughout the country, and are usually helpful and willing to provide their services for free (or a small fee), as they want to prove that they have what it takes to successfully source products for customers

The sad truth is that sourcing agencies are often less helpful in countries other than those listed above. This is usually due to the fact that sourcing agencies who operate outside of these countries simply lack the confidence, experience and resources to do so successfully.

However, outsourcing sourcing companies play an increasingly important role, as they have the knowledge about local sourcing agents and sourcing solus that sourcing agencies typically lack.

The benefits sourcing agencies can provide

Sourcing is a long, difficult and often time-consuming process, so you’ll want to make sure you don’t have to go through it alone. There are plenty of benefits that sourcing agents can provide your business – most notably:

1)    Product sourcing knowledge

sourcing agents can provide sourcing knowledge that your company might not have access to.

2)   Product sourcing market knowledge

Source sourcing agents who have a good understanding of the local markets and business practices can help you achieve your sourcing goals much more easily.

3)Product sourcing experience

They also create a streamlined sourcing process for your company, as they’ll be familiar with the most important steps involved in product sourcing. By having experienced professionals streamlining your entire product sourcing process from start to finish, sourcing can often become a quick and painless process

4)    Confidence in sourcing the right product from the right product suppliers in a timely manner

(5)   Reducing risk through sourcing products more efficiently and eliminating waste.

Sourcing agencies are also helpful in terms of mitigating risk during sourcing. By using sourcing agents they have personally worked with before, sourcing companies reduce the risks of sourcing. Using sourcing agents you’ve never worked with before can increase sourcing risks, and possibly lead to sourcing failures or lost profits.


How to choose a sourcing agencies


Background information

The sourcing industry has flourished in recent years and sourcing agencies have seen an influx of interest from companies. But how do you choose the sourcing agency that best fits your needs?

There are many factors to consider when choosing a sourcing agency, including: size, price, location and language capabilities. Here are some tips to help you make an informed decision.


Sourcing agency size

When choosing a sourcing agency, it is important to consider the size of your sourcing project and how many sourcing agents are available. If it’s a smaller sourcing project, perhaps for one product without sourcing needs in multiple locations, then hiring a small sourcing agency might bode better for you.

However, if sourcing products and services in multiple locations is necessary, it will be important to consider a sourcing agency with a stronger global presence.

You might want to take into account how far sourcing agents are from the location of your sourcing project as well. For example, outsourcing sourcing work to China may require more travel time thane ideal.


Location and language capability

Another important factor to consider when hiring sourcing agencies is location; how far sourcing agents are from the location of your sourcing project. Sourcing work in China might require  sourcing agents to travel and that may take more time than ideal.

Additionally, you might want to consider how many sourcing agents your sourcing agency has who can speak the native language of the location of your sourcing project; if there are none or very few sourcing agents available then it will be difficult for you to communicate your sourcing needs.

This is one of  the most compelling reasons to use sourcing agencies; the ability to hire sourcing agents who can speak your sourcing project’s location’s native language.


Contracts and price

When you are choosing a sourcing agency, be sure to carefully read any and all contracts. If there are no terms that protect your rights or interests in the contract then you may want to consider another sourcing agency.

You need a sourcing contract that will protect your best interests as well as the sourcing agents’ best interests. The sourcing industry is still very young and it’s important for companies to have contracts in place when dealing with sourcing agencies, especially if they are working on an hourly basis.

A sourcing agent’s price can help you make an informed decision when choosing a sourcing agency. It’s important to consider price, but remember that you get what you pay for.

For example, sourcing agents with higher prices are more likely to have better language skills and more international experience than sourcing agents who charge lower prices.

Many sourcing agencies will include one-on-one training in their sourcing  agent’s pricing. However, if you are sourcing abroad and language skills are important to you then one-on-one training may not be enough time to develop sourcing agent language capabilities.


Sourcing services

If sourcing services is a new concept for you, it’s important to know exactly what sourcing agents will do for you and how they will do it. Sourcing services can include sourcing product manufacturing, sourcing location scouting, sourcing agent training and sourcing agent management.

It’s important to know exactly what sourcing agents will be doing for you when choosing a sourcing agency that offers sourcing services. Look for agencies with strong sourcing service portfolios as well as ample case studies of past projects in your industry .


The process of sourcing products


1) Researching Your Market:


Before you even get started with any further steps, there is one thing you need to know for sure  and that is: what do you need? How will your product be used? This step is all about researching the market and finding out what’s there already. You need to know this so you can work out whether it’s a look into the future, or if you’re just duplicating something that already exists.


2) Finding Out What You Need:


What you need will be different depending on how established your company is, mosaic tiles , furniture or other kinds of product. If it’s a new startup, then you’ll be able to approach potential suppliers directly and ask them for advice. However, if it’s an already existing company then you will probably want to call on the expertise of a sourcing agency ( see below ). Sourcing agencies are the professionals in this field and can be extremely useful when it comes to helping you find exactly what you need.


3) Working Out How To Communicate With Them:


This is a crucial part of the process, because if suppliers don’t understand what you’re asking for, they won’t be able to provide it. You need to work out how you’re going to communicate with them and make sure that they know all about your product before any money is handed over.


4) Finding The Right Supplier:


Once again, this will be influenced by the size of your company. If you are a startup then approaching suppliers directly may be an option for you, however if you are an already established company then you will probably want to call on the expertise of a sourcing agency ( see below ). Sourcing agencies are the professionals in this field and can be extremely useful when it comes to helping you find exactly what you need.


5) Make Sure They Can Provide What You’re Looking For:


Before any contracts are signed, make sure that you have a good idea of what they can provide and if it’s something that fits in with your company. When sourcing, make sure the supplier is legit; not all may be trustworthy so follow your instincts and do your research!


6) Making The Deal:


Once again comes down to how big your company is. If you are a startup then you can probably deal directly with suppliers and cut out the middle man. If you are an already established company however, then sourcing agencies may be your best bet when it comes to negotiating contracts.


7) Getting Started:


Once everything has been signed off, congratulations! You’re almost there and ready for production. The first stage is to get samples of the product, and if everything is good to go then production can begin!



It is important to remember that the sourcing agencies are there for you. They want to help your company grow and thrive, but it’s up to you to make sure they can do so in a way that benefits not only them, but also your business. If you’re still unsure about how much work or commitment this will take on your part, we recommend reaching out and asking any questions you may have before making any commitments with an agency, or contact us through Email or telephone, we will reply as soon as possible, thanks for  reading!