Direct Sourcing Agent

by tnob
8 replies
  • ECOMMERCE
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Does anyone have experience with a direct sourcing agent as a supplier? Not sure if that is the correct name, but someone who is boots on the ground near a manufacturer (say in China), who can source individual products from the manufacturer, package with your brand and ship them direct to customer (dropship for you).
#agent #direct #sourcing
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  • Profile picture of the author Serene Carmen
    Hey there

    Yes there are a few I'll list below. Some will even do custom packaging. If you are starting out it might make sense to use a sourcing agent as you don't need to hold inventory and shipping times are less than conventional dropshipping. Fulfilman has shipping times of 7 to 15 days to the US.

    Fulfilman
    Source in Box
    Source-agent
    PandaFulfil
    Nichepik
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    • Profile picture of the author tnob
      Thank you Serene! Do you find that it is easier to work with such a company than direct from manufacturer? What are the advantages and disadvantages of sourcing agent vs. direct to manufacturer?
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  • Profile picture of the author Serene Carmen
    Hi there
    So for China product sourcing you have 3 options:

    1. AliExpress Drop shipping
    The AliExpress supplier will ship your item when you receive orders.
    Advantages:
    - You can start right away, no need to wait for your inventory to arrive
    - It makes it easy to test products as you don't have the risk of ordering inventory that may not sell
    - No upfront capital is required to buy and hold stock
    - Easy to add and manage stock and orders using Shopify/Oberlo
    Disadvantages:
    - Shipping times are usually long
    - You can't customize the packaging or the product
    - More difficult to build a brand since the products aren't usually customizable
    - Your store can be easily copied and in the long term a drop shipping store (even though profitable) is not usually worth as much as a brand.

    2. Working with an Alibaba Supplier and Holding Stock
    With this option you order directly from an Alibaba manufacturer and have you inventory delivered to yourself or a 3PL partner in whichever country you expect most of your customers to be. Alibaba suppliers usually aren't willing to drop ship for you.

    Advantages:
    - Prices per item are less than AliExpress
    - You can customize the packaging or the product as you need
    - If a customer buys multiple items from your store they can be packed and shipped together
    - Since you hold stock in the county of your customer base shipping times are a few days (which customers love)
    - Easier to build a brand with customized products and packaging

    Disadvantages:
    - Upfront capital is required to buy and hold stock
    - The manafacturer will have a minimum order quantity
    - It will take time to receive your order (manufacture and shipping)
    - If you are not 100% sure of the demand for your product, you run the risk of holding stock you might not be able to sell
    - Difficult to test new products, Alibaba suppliers usually have a minimum order quantity
    - Say you store your inventory in the US, shipping from there to other countries overseas might cost more, so if you think your market is in more than one location you need to decide where to hold inventory to minimize costs
    - If you cannot store and ship the products yourself, you will need to pay a 3PL provider
    - You may pay import tax in whichever country you are importing into (depending on tax law)

    3. Working with a Sourcing and Fulfilment Partner in China
    With this option like with conventional drop shipping your sourcing partner will source your product as you order it.

    Advantages:
    - You can start right away, no need to wait for your inventory to arrive
    - It makes it easy to test products as you don't have the risk of ordering inventory that may not sell
    - No upfront capital is required to buy and hold stock
    - Prices per item are about the same as AliExpress
    - If you chose a sourcing partner that provides the service. You may be able to customize the packaging however, product customization may be challenging
    - Shipping times are significantly less than conventional AliExpress drop shipping

    Disadvantages:
    - The cost of shipping per item is more than option 1 and option 2. If your markup is not high enough the higher shipping costs may make this option infeasible. It varies depending on the weight and dimensions of the items.
    - If you need product customization this model might not work for you, you will probably need to adhere to the manufacturers MOQ and if that's the case you might as well ship the MOQ to the country that you're selling in and save on shipping costs.

    If you are just starting out and have not validated the demand for your product, I would go with option 3. Once you are sure you have a product/products that are doing well, you can move over to option 2 and order inventory. I would contact a few. Get quotes for your product and see whether it is feasible given the shipping costs.
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    • Profile picture of the author tnob
      Aweome info Serene! Thank you for your responses!
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  • Profile picture of the author layla brooke
    thanks for the information
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  • Profile picture of the author george peterson
    check out gembah.com - I have no affiliation with them but a close friend (savvy ecommerce seller) swears by them. He's managing several million dollar brands and they do all the sourcing for him for one of his China sourced brands. Seems unconventional in my opinion but he's raved about them for some time.
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  • Profile picture of the author alexshawn1216
    If you dropshipping from China you will find more and more sourcing agents not only playing the sourcing role but also include QC and shipping to meet the dropshipping requirements. All you need is to compare their professional skills, service and charge to select one serve your business.
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  • Profile picture of the author mikemg87
    When it comes to online shopping, reliable service is what one worries about. An online drop-shipping sourcing agent based in China, E-Commerce Express (link removed) is also a very reliable and cost-effective provider of 3PL logistics. Do check it out!
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