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 this blog, let’s find out: should you, or should you not, use a sourcing agent.
I am Yuping Wang. I have been sourcing for 20 years. I am not a souring agent, but I have used sourcing agent working in sourcing. So, let me share some of my perspectives.
Where Do I Stand on Using A Sourcing Agent?
I personally always go against using an agent. For two reason:
- One, in the case of sourcing, often a lot of money is 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 is going on with the factory.
- Two, I am a do-er, I don’t mind getting my hands dirty, even if I have a full-time job and I am exhausted after work, if this is my dream, I will do it and make it happen.
But that is just me. If everyone is like me, we are going to put sourcing agents out of business.
Of course, we don’t mind letting go an army of the bad ones, but for the significant few that are good, we want to see them prosper. They work hard, they provide value, 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 more 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 is hard to start a business with a small budget, but I have 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, I will start from a common product, something easy to learn the process first.
Achiever #2: I Got Some Money
Not that I want to lose it all, but I can invest $10,000.
I make some good money from my 9-5 job, but I know I can never get “rich” by working for someone else. I need something that I can do in my free time and create a secondary income and then eventually own my own business. Amazon FBA idea sounds perfect.
Do I have a unique design? Yes, I have come up 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 takes at least $50K. I am getting interested in the e-commerce business, something like Amazon FBA, because it is taking over traditional bricks and mortar retails. I have enough funds to invest into this sector. I want to do it now to take advantage of the market trend.
But I am very busy with my time. I am not interested in doing it myself.
Do I have a unique design? No, not yet. But I can hire VAs to research the product idea for me. Who is VA? It is the virtual assistant.
Are you the Achiever #1, #2, or #3? Which “Achiever” should use a sourcing agent for your Amazon FBA Business?
Not too fast, I recommend you know the two types of sourcing agent relationship first before you decide.
You Work for Me or For Yourself?
There are two types of agent relationship.
Agent Type 1: Agent Works for YOU.
Simply put, you hire an agent just like an employee. Most likely you need to pay up front, either on hourly or monthly basis.
The agent sources the product from the factory, but he copies you in the communication with the factory. In this case, you are the boss, you still own the relationship with the factory.
Agent Type 2: Agent Works for HIMSELF.
The Agent is not your employee. He is working for his own business. Most likely you pay a commission, but the percentage is never going to be disclosed to you. He quotes you a price just like any other suppliers. 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. Whom your agent source product from is none of your business.
Which Achiever Should Use A Sourcing Agent?
Achiever, You Must Use an Agent!
Achiever #3, you get money, but you don’t get time. Do it, hire a sourcing agent right now to start building your e-commerce empire. Which type of agent you should hire? Definitely Type A, the one who works for you.
Hiring someone like an employee may looks like a lot of money and overhead, but your game is SCALE. If you pay someone on commission basis, the more you put in, the more you share. You get the math.
Achiever, Maybe You Should!
Achiever #1, you don’t get much to start and you don’t have a unique design yet. The product you are considering buying is a “commodity”. Not much protection can go along with the your product since someone else is selling almost identical product. Chances are, they are probably from the same supplier.
Since you just want 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 2 that is all you can afford.
Achiever, Definitely, You Shouldn’t!
Achiever #2, are you serious? Yes, you said you were. You said you are betting your dream on that product idea you had.
If you are still serious, you must focus on the long game. There is no short cut to it.
You need to own the relationship with the factory. You need to be hands-on. You need to know the ins & outs of sourcing.
You need to take total control of the supplier management and quality control.
This is your dream; can you trust anyone who cares about it more than you do? More importantly, this is your money, you can not buy profit by hiring sourcing agent.
Bust the Myths
When it comes down on using a sourcing agent, we must bust at least 2 myths.
Myth #1. Sourcing agent can negotiate a better price than I do.
If the sourcing agent can negotiate a better price, there is margin to be negotiated. You just don’t know HOW yet.
Myth #2. If I do it yourself, it will take a lot of time.
If you learn sourcing from the ABC on your own, yes it takes time to become good through trials and errors. But if you are smart, you will know how to leverage other peoples’ expertise.
Many people sailed through sourcing because they learned sourcing quickly from Sourcing Warrior’s Mastermind. I
f you want to save time and avoid all the mistakes that could 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 will be on your way sourcing like a Pro.
The Important Question: How to 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.