Both models can work well, but they answer different questions. An agent is paid to represent your interests. A trading company buys and resells, and is paid through the margin between its cost and your price.
How a sourcing agent works
The agent searches suppliers, compares quotes, arranges samples, checks production and coordinates shipping. You contract with the factory, so you see the factory price and pay a service fee. You also carry more of the operational responsibility.
How a trading company works
The trader handles the whole transaction and sells you a finished price. That is simpler for buyers without staff in China, but the factory relationship and the cost breakdown stay with the trader.
Decide by control, not by price
- If you want visibility of factory costs and control of the supplier relationship, use an agent
- If you want a single invoice and minimal coordination, use a trading company
- If you need a mix, ask whether the agent can also act as the exporter of record
Check responsibilities in writing
Whatever the model, confirm who is responsible for specification approval, inspection, documentation and claims if goods fail inspection. The answer often matters more than the quoted rate.
