Module 5-: If you are into exportation business, you can save yourself a lot of stress by using product sourcing agents to search for your export products. Product sourcing agents help to search for products at cheap rates from farms and local markets.
If you want to buy products food crops for export for instance and maybe you live in a city like Lagos, you would need northern based product sourcing agents to help you go to the farms to search for the quantity and specifications of the products you want, pay for the items and then arrange for it to be transported down to your location in Lagos and from there you can now arrange for it to be shipped to the overseas buyer. This is one of the easiest ways to run an export business however; it has to be done with utmost care to avoid being ripped off or jeopardizing your business. Some of these tips would help you deal with product sourcing agents and get the best out of them-:
Sourcing for Export Products: How to Deal With Product Sourcing Agents
1. Understand the types of Product sourcing Agents-: Even though they are all referred to as product sourcing agents, there are different types of product sourcing agents and the type you decide to deal with would have an impact on the prices of the commodities you want to buy.
- Local Buying Agents-: These are agents that deal directly with farmers. They have extensive knowledge of the area where they operate and can go deep into the villages to get products at cheap rates. They usually offer the cheapest prices on commodities.
- Commodity Merchant-: This is like your local trader who stock commodities in large quantities and then resells to exporters. Commodity merchants often get their products from local buying and this makes the prices of their items slightly higher.
- Commodity Sales Agents-: They are usually registered agents with offices and their primary duty is to help exporters source for products. They are usually expensive but safer because most of them have offices in big cities where you can easily trace them so your funds are safe to an extent. However, they would usually ask for an advance payment before they can supply you needed commodities. You can literally go to sleep and run your export business with ease when you find an honest commodity sales agent to deal with.
2. Check the Agent’s track records-: If you have chosen a product sourcing agent to deal with, it is important that you investigate the agent’s track record and credentials before doing business with them. It is safer to go with recognized and credible agents with physical and traceable offices. You should also find out how long they have been in business and who they have worked with.
An honest and credible product sourcing agent would not have problems giving you a few references that you can investigate. The internet has even made it easier to investigate people and find out their track record. If an agent has been involved in a scam or funny practice before, it is likely that the search engines would turn up his name and expose him. You can also find out whether or not the agent’s business is duly registered and licensed so that you can be protected under the law.
3. Ensure that you give clear instructions-: Your overseas buyers would definitely tell you what they want and provide you with a list of specifications. If you don’t follow this strictly, you may run into problems with the buyer; like having the products being rejected and payment denied.
Therefore, you must ensure that you provide your agent with a detailed specification of what you want. If you have samples, you can send it to him to be used as a guide. You can also provide picture samples to make it clearer and then ensure that you provide a written list of specifications to further guarantee clarity and adherence to instructions.
4. Ask For Samples-: Ensure that you instruct the product sourcing agent to send you samples of the commodities before he goes ahead to start buying in bulk. With a smaller sample, it would be easier to reject products that don’t meet your specification. Some of them might ask you to pay for the samples but I believe this is a small price to pay considering potential losses if this step is skipped.
5. Arrange for Inspection-: Another tip to ensure that you are playing on the safe side is to ensure that you have the commodities inspected after purchase. You know the saying that seeing is believing right? Pictures may not be able to reveal a true state of the commodities hence, it is important that you arrange for a physical inspection before the goods are shipped. If you are unable to conduct an inspection yourself, you can arrange for quality inspectors do it on your behalf.
6. Focus less on price-: It is true that you are in a business and would like to make as much gain as you can but you have to take care and avoid making price your only decision-making factor. You shouldn’t always go for the cheapest product in the market because cheap doesn’t always go with quality. You would be able to retain your overseas customers if you are able to keep supplying them with good products but the moment you start to fall short of their expectation, they begin to look for other credible suppliers.
Therefore, you must ensure that you find a balance between price and quality. You can have more than one product sourcing agent and try to ask for quotes from each one as well as samples before you enter into a contract with them.
Product sourcing is a very important aspect of your business and you should try as much as possible to approach it with care. You can also consider learning how to source for products yourself but this would take some time especially if you are new into exportation business.