Sourcing Agent vs. Distributor
There are several differences that separate sourcing agents from distributors. Depending on your company needs one may be a better fit than the other. No matter what option you choose for your sourcing and distribution needs it is important to review the pros and cons of each option.
Sourcing agents assist companies with the process of locating sources of products and supplies. This is done so the company can obtain resources at the lowest possible prices, which saves time and money. Sourcing agents may represent a single employer or represent a broad spectrum of companies. Sourcing agents typically need to understand and communicate in multiple languages, while also being able to use excellent business tactics. Some of the other duties of a strategic sourcing agent, include:
- Locating new products & suppliers
- Manage negotiations
- Quality control
- Vast knowledge of manufacturing processes
- Good understanding of suppliers’ capabilities and capacity
- Shipping & logistics
Sourcing Agent Advantages
There are a bevy of benefits associated with using a sourcing agent for the procurement of overseas resources. Some of the main advantages of using a sourcing agent, include:
- Employee Costs – The costs associated with training and housing your employees overseas is eliminated.
- Opportunities – Sourcing agents can grasp and exploit a variety of benefits associated with the overseas market.
- Built-In Working Relationships – An excellent sourcing agent will already have solid relationships with potential buyers and sellers.
- Control – The use of a sourcing agent allows you to maintain more control over matters such as final price and brand image.
A distributor generally purchases products at a wholesale price and then sells those products at a mark-up to turn a profit. Distributors provide a set range of ready-made inventory that is available for sale, but do not have many types of customization options to cater to individual needs.
- Simplicity - Distributors enable you to access international markets while avoiding logistics issues and many trade-related risks.
- Responsibility – A distributor is usually responsible for the shipment of goods, and the accompanying customs formalities and paperwork.
- Stock - Many distributors carry a stock of the products they sell, which allows them to buy in bulk, and take care of warehousing and inventory control in the overseas market.
- Expense – Distributors will often expect heavy discounts and generous credit terms in exchange for taking on trade related risks and burdens.
- Loss of Control – You can often lose certain aspects of control to the distributor due to the deal structure.
- Exclusivity – Distributors often require terms of exclusivity within their deal structures, which can be a disadvantage if the distributor does not end up being the right fit.
The Best Option for You
The best choice depends on which of the above elements are most important for your project needs. If you need your items quickly, do not require any customization, or if you only want to order a small quantity, a distributor might be the right option for you. However, if your product requires customization, need help with a prototype, or if you want to increase your margins, a sourcing agent is the best option.
Contact Sun Fast International Today
All our overseas manufacturing facilities are regularly screened and audited to ensure that they meet our high standards of quality. We select the facility that is best suited to the manufacturing requirements of your product to give you the most efficient and most cost-effective option for your project.
Contact Sun Fast International today for more information regarding our offshore sourcing agent service capabilities.