Sourcing Agents
When an agent is worth the fee, how they're typically paid, and how to make sure they're working for you.
A sourcing agent is an independent representative, usually based in China, who finds factories, negotiates on your behalf, inspects production, and manages logistics locally — standing in for the on-the-ground presence most foreign buyers don't have. Done well, this is genuinely valuable. Done poorly, it can add a layer of hidden markup and misaligned incentives between you and the factory.
When an agent is worth it
- You're sourcing for the first time and don't yet have the relationships, language ability, or on-the-ground judgment to vet factories independently.
- Your product is complex, custom, or high-value enough that in-person factory visits and hands-on quality oversight materially reduce risk.
- You're managing multiple factories or product lines and need a single coordinated point of contact rather than juggling several supplier relationships directly.
If you're sourcing a simple, well-specified product at meaningful volume and already have a vetted factory relationship, an agent's fee may not buy you much you can't do directly.
How agents are typically paid
- Commission-based — typically 5–10% of order value, aligning the agent's incentive with getting you a good price, though it can also create pressure to push volume over fit.
- Flat fee or retainer — a fixed monthly or per-project rate, more common for ongoing, complex sourcing relationships.
- Factory-paid commission — the agent is paid by the factory rather than the buyer, which is where incentives can get misaligned: an agent paid by the factory has less reason to negotiate hard on your behalf, or to flag a factory's shortcomings.
How to vet a sourcing agent
- Ask directly how they're compensated, including whether they receive any payment from the factories they recommend. A straight answer is a good sign; evasiveness isn't.
- Request references from existing clients sourcing similar products, and actually contact them.
- Confirm they're independent from the factories they recommend — an agent who is functionally a trading company for one supplier isn't sourcing on your behalf, they're selling to you.
- Put fee structure, reporting expectations, and communication cadence in writing before you start.
An agent whose only income is a factory-paid commission has a structural incentive to steer you toward whichever factory pays best, not whichever factory is best for you. If you want an agent working purely in your interest, expect to pay for it directly.