Surprise Answers from A Sourcing Pro
No kidding, this question is a million-dollar question because you want to make your first million, asap! Maybe using a sourcing agent can help expedite the million?
In today’s blog, let’s explore this idea: should you, or should you not, use a sourcing agent?
I am Yuping Wang. I’ve been sourcing for 20 years. I’m not a sourcing agent myself, but I have used them in my work, so I can share some personal perspective.
Where Do I Stand On Using A Sourcing Agent?
Personally, I always go against using an agent, for two reasons:
- In the case of sourcing, a lot of money is often involved. For this reason, I prefer to know who is taking my money – and I want to OWN the relationship. Good, bad, or ugly, I want to know who the factory is, and what’s going on with the factory.
- I’m a doer. I don’t mind getting my hands dirty, even if I have a full-time job and I’m exhausted when I get home. If this is my dream, I will carry it out and make it happen.
But that’s just me. If everyone were like me, we might put sourcing agents out of business.
Of course, we don’t mind seeing the army of the bad sourcing agents fall by the way, but for the significant few that are good, we want to see them prosper. They work hard, they provide value, and they deserve our money.
Where Do You Stand As The “Achiever”?
Everyone’s situation is different, but for all of us who want to start our own business, we have the same name: “Achiever”.
Which one of the below Achievers sounds most like you?
Achiever #1: Don’t Have Much Money
I saved up $2500. Not much but I want to give it a try.
Yes, it’s hard to start a business with a small budget, but I’ve heard about Amazon FBA on Youtube. I feel like everyone is doing it and anyone can sell on Amazon. Why not me?!
“Do I have a unique design? Not yet, but I’ll start with a common product, something easy, until I learn the process.”
Achiever #2: I Got Some Money
Not that I want to lose it all, but I can invest about $10,000.
“I make good money with my 9-5 job, but I know I’ll never get rich by working for someone else. I need something that I can do in my free time that’ll create some secondary income, and eventually turn into my own business. Amazon FBA idea sounds perfect.
“Do I have a unique design? Yes; I’ve come up with something quite unique. If I focus on building a brand around my unique design, this Amazon business could seriously free me up from the 9-5 job.”
Achiever #3: I Got More Than “Some” Money
Is $50,000 enough?
“To scale any business, I think it’ll take at least $50K. I’m getting interested in e-commerce business, something like Amazon FBA, because it’s taking a lot of business away from traditional brick and mortar retailers. I have enough funds to invest in this sector, and I want to do it now to take advantage of market trends.
“But, I’m very busy with my time. I’m not interested in doing it myself.
“Do I have a unique design? No, not yet. But I can hire VAs – virtual assistants – to research the product idea for me.”
Are you the Achiever #1, #2, or #3? Which “Achiever” should use a sourcing agent for their Amazon FBA Business?
Not so fast – first, I recommend that you get to know the two types of sourcing agent relationships before you decide.
Do You Work for Me Or For Yourself?
There are two types of agent relationship.
Agent Type 1: Agent Who Works for YOU.
Simply put, you hire an agent as you would an employee. Most likely, you’ll need to pay them up front, either on an hourly or monthly basis.
These types of agents source your product from the factory, but they will copy you in their communications with the factory. In this case, you are the boss, and you still own the relationship with the factory.
Agent Type B: Agents who work for THEMSELVES.
These agents are not your employees. They are working for their own businesses. Most likely, you’ll end up paying them a commission, but the specific percentage is never disclosed to you. They quote you a price just like a direct supplier. Your PO and payment go to your agent, not to the factory.
What about the factory? You probably won’t know who it is. Your agent IS your supplier. Your agent’s sources are, in this case, none of your business.
Which Achiever Should Use A Sourcing Agent?
Achiever #3, You Must Use an Agent!
You’ve got the money, but not the time. Go ahead and hire a sourcing agent right now to start building your e-commerce empire. And which type of agent you should hire? Definitely Type A, the one who works for you.
Hiring someone like an employee may seem like a lot of money and overhead to cover, but your game here is SCALE. If you’re paying someone on a commission basis, the more you put in, the more you have to share. You get the math.
Achiever #1, Maybe You Should!
You don’t have much to start with, and you don’t have a unique design yet. The product you are considering buying is a commodity. you’re your product won’t have a lot of protection, since someone else is selling a nearly identical product. Chances are, their products are even from the same supplier.
Since you’re just looking to try it out quickly, maybe you should hire an agent to beat up the supplier and get you the best price. What type of agent? Type B – that’s all you can afford at this point.
Achiever #2, You Definitely Should Not!
You’re serious about this, right? Yes, you’ve said you are. You’re betting your dream on that product idea you have!
If you’re still serious, you have to focus on the long game. There’s no shortcut to use.
You need to own your relationship with the factory. You need to be hands-on. You need to know the ins and outs of sourcing.
You need to take total control of the supplier management and quality control – and ultimately your own destiny.
This is your dream; can you trust anyone to care about it more than you? More importantly, this is your money, you cannot buy profit by hiring sourcing agent.
Bust the Myths
When it comes down on using a sourcing agent, we have to bust at least 2 myths.
Myth #1. Sourcing Agents Can Negotiate Better Prices Than I Can.
If the sourcing agent can negotiate a better price, this means that there’s margin to be negotiated. You just don’t know HOW to do this effectively yet.
Myth #2. If I Do It Myself, It’ll Take A Lot Of Time.
If you learn sourcing from the basics on your own, then sure; it’ll take time to get good, and it’ll take some trial and error. But if you’re smart, you’ll want to take advantage of other peoples’ expertise.
Many people have sailed through sourcing because they picked it up quickly from Sourcing Warrior’s Mastermind.
If you want to save time and avoid all the mistakes that will cost you time and money, Click here to see more about the Sourcing Warrior’s Mastermind.
Not in a few years, but in a few days, you’ll on your way sourcing like a pro.
The Important Question: How Do I Find A Good Sourcing Agent?
A good sourcing agent, regardless of the type of relationship, he will never hide the factory name from you. To learn more on how to find a good sourcing agent, click here.
If you are an achiever, and you have a burning desire to be wealthy, you can go over, go under, go around, or go through.
But you will never give up!
Sourcing agent or not, you can achieve your goals. Make it a good fight.