How do Sourcing Agents Differ from Distributors?
Procurement is a vital business operation, and it is unpredictable. As it is associated with many variables, tracking every part of the process is not possible. This is the only sector where outcome failures are expected to meet expectations. This is the reason why procuring from low-cost markets is more challenging and riskier. You can mitigate the risk if you have a clear insight into what you are diving into.
If your organization is all set to source products from developing markets, such as China, you can think about consulting an experienced sourcing agency or a distributor. To make a better decision, you need to know the difference between the two. Keep reading this blog to learn about the differences.
Definition
Sourcing agents reach a number of suppliers and manufacturers for sourcing the product you want. Also, they often make a commission from the sale.
A distributor, on the other hand, buys products from the wholesale market and sells you those products at a fixed price.
Before choosing between the two, you need to consider the following requirements:
Product Range on Offer
Distributors are liable for providing only a set range of inventories, which are ready for sale. Sourcing agents have more networks in the global market. They can avail any type of product having the essential specifications the buyers need and place an order on your behalf to the chosen manufacturer or supplier no matter whether you are sourcing in Asia or any other place.
Customization
When organizations team up with distributors, they do not get the option of customization as the distributors’ products are already an integral part of their stock. Sourcing agents have many connections to potential suppliers and manufacturers who can customize the products as per your requirements. You can also enjoy the right of approving the products and finalize the alterations if required.
Varying Cost
Partnering with a sourcing agency is an affordable way of arranging your required products. An agent receives a commission on the order based on the contract made between the buyers and the suppliers. The buyer gets the products at factory rates. Distributors can add any charges to the actual rate or the factory rate.
Prototyping
Working with sourcing agents has another benefit. It enables you to create a prototype before deciding on placing your order. Also, they can further guide for choosing the right supplier or manufacturer to deal with the order.
They can help you deal with quality checks and negotiate the actual prices of the products. Distributors cannot let you develop prototypes as they deal only with finished products.
Factoring in Time
If your order is small in amount, you want the delivery as early as possible, and you do not need much customization, then you can choose a distributor. They can save your time by arranging a ready-to-use inventory. Sourcing agents may need time as they offer greater control and customization.
Quality Control
While sourcing in Asia or overseas with agents, you can get the kind of control required for maximum benefits. Moreover, the specifications are considered while developing the products to make them customized.
Bottom line
Consider your requirements before choosing between sourcing agents and distributors. It will help you make the right decision.