Worth It: Why Don’t You Need a Sourcing Agent?
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Surprising Answers from a Sourcing Pro
No kidding, this is the million-dollar question because you want to hit your first million as soon as possible! Maybe hiring a sourcing agent could help speed up that process?
In today’s blog, let’s dive into this idea: should you or should you not use a sourcing agent?
I’m Supplyia sourcing. I’ve been sourcing for 10 years. I’m a sourcing agent myself, and I’ve worked with plenty, so I’ve got some personal insight to share.
Where Do I Stand on Using a Sourcing Agent?
Personally, I always go against using an agent, and there are two main reasons:
- In sourcing, a lot of money is usually at stake. For that reason, I prefer to know who’s handling my money—and I want to own the relationship. Whether it’s good, bad, or ugly, I want to know who the factory is and what’s really going on there.
- I’m a doer. I don’t mind getting my hands dirty, even if I’ve had a full day of work and I’m exhausted by the time I get home. If it’s my dream, I’m going to make it happen.
But that’s just me. If everyone were like me, sourcing agents might be out of a job.
Of course, we wouldn’t mind seeing the bad agents fall by the wayside, but for the few good ones out there, we want to see them thrive. They work hard, 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 a business, we share one common title: “Achiever.”
Which one of the following Achievers sounds most like you?
Achiever #1: I Don’t Have Much Money
I’ve saved up $2,500. Not a lot, but I want to give it a try.
Yes, starting a business with a small budget is tough, but I’ve heard about Amazon FBA on YouTube. It seems like everyone’s 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 simple—until I figure out the process.”
Achiever #2: I’ve Got Some Money
Not that I want to lose it all, but I can invest around $10,000.
“I make good money with my 9-to-5 job, but I know I’ll never get rich working for someone else. I need something I can do in my spare time to create secondary income, and eventually, build my own business. Amazon FBA sounds like the perfect fit.”
“Do I have a unique design? Yes! I’ve come up with something unique. If I focus on building a brand around my design, this Amazon business could help me break free from the 9-to-5 grind.”
Achiever #3: I’ve Got More Than ‘Some’ Money
Is $50,000 enough?
“To scale any business, I think I need at least $50K. I’m getting interested in e-commerce, something like Amazon FBA, because it’s taking a lot of business away from traditional brick-and-mortar retailers. I have the funds to invest in this area, and I want to jump in while the market’s hot.”
“But, I’m super busy. I’m not interested in doing it myself.”
“Do I have a unique design? Not yet. But I can hire VAs (virtual assistants) to help research product ideas for me.”
So, which Achiever are you: #1, #2, or #3? And which “Achiever” should use a sourcing agent for their Amazon FBA business?
Not so fast—first, let’s explore the two types of sourcing agent relationships before you make your decision.
Are They Working for Me or for Themselves?
There are two types of agent relationships.
Agent Type 1: The Agent Who Works for YOU
Simply put, you hire the agent as you would an employee. Most likely, you’ll need to pay them upfront, either hourly or monthly.
These agents source products for you from the factory, and they’ll copy you on all communications with the factory. In this case, you’re the boss, and you still own the relationship with the factory.
Agent Type B: The Agent Who Works for THEMSELVES
These agents are not your employees. They work for their own business. You’ll likely pay them a commission, but the exact percentage is never disclosed. They’ll quote you a price just like a direct supplier. Your PO and payment go to the agent, not to the factory.
What about the factory? You probably won’t know who it is. Your agent is your supplier. The source is 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 to start building your e-commerce empire now. And which type of agent should you hire? Definitely Type A—the one who works for you.
Hiring someone like an employee might seem like a lot of overhead, but your game here is scale. If you pay someone on commission, the more you invest, the more you’ll 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’re considering is a commodity, meaning it won’t have much protection since others are probably selling nearly identical products. Chances are, they’re sourcing from the same supplier.
Since you’re just trying to get your feet wet quickly, maybe it’s best to hire an agent to negotiate the best price for you. What kind 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 dreams on that product idea!
If you’re serious, you’ve got to focus on the long game. There’s no shortcut here.
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 full control of supplier management and quality control—and ultimately, your destiny.
This is your dream—can you trust anyone to care about it more than you? More importantly, this is your money. You can’t buy success by hiring a sourcing agent.
Busting the Myths
Myth #1: Sourcing Agents Can Negotiate Better Prices Than I Can.
Not true.
If the sourcing agent can negotiate a better price, that just means there’s room to negotiate. You just don’t know how to do it effectively yet.
Myth #2: If I Do It Myself, It’ll Take Too Much Time.
Not true.
If you learn sourcing from scratch on your own, sure, it’ll take time to get good at it, and there will be some trial and error. But if you’re smart, you’ll want to leverage other people’s expertise.
The Key Question: How Do I Find a Good Sourcing Agent?
A good sourcing agent—regardless of the relationship type—will never hide the factory’s name from you.
Final Thought
If you’re an achiever with a burning desire to be wealthy, you can go over, under, around, or through any obstacle.
But you will never give up!
Whether you use a sourcing agent or not, you can reach your goals. Make it a good fight.
