23 Questions To Ask When Choosing An Import Agent/Broker

A Hot Tip about Business Environment in Australia

Posted on: 3 Jun 2010

When starting to look for an Import Agent or Broker, start by asking friends/associates if they can recommend one.  Or, compare companies online, then short list at two or three.  Choosing the right import broker will mean the difference between success and failure of your import project, so before committing to anything, ask these questions…

 

1.  What services can you provide?

The amount of work and expertise required to source from China is often underestimated.  If the agent can demonstrate an ability manage your project ‘end-to-end’ it will save you time coordinating agents, inspection companies, freight forwarders, Customs etc.

 

2.  What can you source?

Some agents have a large database and sourcing system that can be applied to any product.  Others only have contacts in specific industries.  If you find a good general products sourcing company, ensure they have a systematic approach to managing your project.  The system is more important than their knowledge of your product, as this can be learnt quickly.

3.  How can I be sure the price you source for my product is the best price we can get?

Open market tendering, rather than just contacting a few established contacts, will enable the average price, or ‘fair market value’ to be established, providing peace of mind you’re not being over charged.

4.  Will you reveal full details of the suppliers you source for me?

Most brokers prevent you from knowing who their source is in China – even though you pay them thousands up front to screen and source a suitable supplier.  They withhold that entity’s contact details so you are always reliant on them.  Ensure they’re transparent, that is they disclose full details of suppliers, so if your relationship with the agent ceases, or their relationship with the factory ceases, you’re not left without product.

 

5.  Will you advise up front how you’ll manage my project, what I get, and what my investment will be?

A good agent won’t have a problem with this.  Upfront disclosure helps prevent unexpected surprises down the track.  I.e. Larger than expected bills.

 

6.  Are you tied to any factories?

The agent should get quotes from many suppliers, not just a couple of friends or relatives of the agent, or someone paying him the most commission.  A truly independent agent will recommend a supplier most suited to your needs, not a supplier most convenient or profitable to your agent.    7.  Do you receive commission from the factory?

On the internet, you can find agents who will source your products for a commission of around 5%. However, these agents also receive a commission from the manufacturer or trading company who supplies your products, and to cover this cost the manufacturer or trading company build in their commission into the offer price for the goods. The result is the commission paid by you to the agent can be anywhere from at least 12% to 100% and not 5%... you can never be 100% sure. As most agents are profit driven, they may refer your business to the supplier with the highest margin for them, regardless of quality, resulting in substandard product, or to the supplier which offers them the highest commission (which isn’t necessarily the one with the most suitable product for you!).  Find an agent who’s remunerated solely by you.

 

8.  Are the owners of the agency/brokerage Chinese?

Many brokers are non-Chinese who have done a few business trips, made some contacts and are trying to deal with the cultural complexities – but really start from behind the eight ball.  The owner must be Chinese to truly understand the cultural factors imperative for success.

9.  Is the person I’m dealing with Chinese?

Your Project Officer should be Chinese to avoid miscommunications and cultural issues arising.

10.  Do you have employees in China?

Most agents purport to have contacts in China but these turn out to be 3 layers deep – that is, they are using Hong Kong brokers.  So by the time you get a quote, two even three other people in the chain have put their mark-up on which makes the deal unworkable.  Ensure your agent employs their own team working just for them on the ground – no contractors or middlemen.

Also, having personnel in China will mean issues can be sorted quicker, and they can act as your ‘Johnny on the spot’ for any issues.

 

11.  Do you have an office in my country?

Having an office in the country you reside means the agent should have knowledge of the many idiosyncrasies to importing successfully into your country.  This can assist greatly in avoiding additional costs and getting product quickly and smoothly into the country.

 

12.  Will I have a single point of contact?  Who are they?

A single point of contact will save your time being passed around from one person to another.

13.  What is their level of written English?

Most business is conducted via email, so good written ability is critical to avoid miscommunications, a common cause of grief!

 

14.  What is their level of oral English?

At times issues need to be sorted over the phone, so fluency in English is critical.

 

15.  How long have you worked in international trade?

Experience counts for a lot in importing.

16.  How much experience have they had in the East and West?

Bicultural people have an understanding of the differences between the Western and Chinese approach to doing business.  Someone who speaks both languages is not bicultural.  A bicultural person is someone who understands the depth of understanding of both sides of the culture.  Not only can they communicate fluently but they understand the communication styles, patterns and context. You need a bicultural person to control your sourcing plan because that determines your supplier selection, your negotiation/relationship with the supplier, and ability to spot issues BEFORE they arise.

 

17.  Can you show me the system you will follow to ensure my job is managed diligently?

International trade is complex, so overlooking one small step or detail can have a big impact on the project.  If the agent has a written system to follow, it reduces the chance for oversights and errors.

 

18.  Can you recommend tactics to reduce the risk of Intellectual Property Rights infringement?

If you have a patent, patent pending, or any other IP, you need to be sure the agent has tactics to help protect your proprietary ideas.

 

19.  What systems do you have in place to ensure quality?

Quality control occurs right throughout the sourcing process, not just the final onsite inspection (if one is required).  You must be comfortable the agent works closely with (read ‘micro-manages’) the factory to have your expectations met.

 

20.  Do you undertake onsite quality inspections?  What is involved in this?

The agent should be able to arrange onsite factory inspections to International Standards.

 

21.  If I have less than a container load, how do you manage the shipment?

If you have less than a container, it’s better to share a container with someone the agent knows, to reduce the chance of the whole container being delayed because of problems with the other person’s goods.

 

22.  What testimonials from current/past clients can you provide?

Testimonials from former clients will help provide proof of their service claims.

 

23.  What’s my investment in your services?

Different agents have different fee models.  E.g. upfront payment, fee for service, commission on value of goods, supplier management fee, retainer, or a combination of these.  It is standard business practice in China for Agents to receive a commission from the supplier which is not revealed to the buyer. See point 7, ‘Do you receive commission from the factory?’ Determine upfront the possible charges involved.

 

For further info contact ChinaDirect Sourcing on +61 7 3392 1421 or info@chinadirectsourcing.com.au


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Posted: 03 June 2010

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