How is a trading firm different from sourcing agent?

Difference between the Trading firm and Sourcing agent.

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Sourcing April 1st, 2021 views

Trading firm

  • Trading firms act as a link between suppliers and buyers by buying products from a factory and letting the suppliers buy them. They make money by gaining profits from the suppliers’ cut.
  • If the purchasing methods confuse you and you deal in small quantities of product ,trading firms are the way to go.
  • They have their own directions and connections, you can directly purchase it from them.
  • They work better with small businesses and family owned businesses since they do not need large quantities of products. However, they do not mostly come in contact with foreign or indirect buyers.
  • Traders do not only have knowledge of Indian market but they also have in depth knowledge of foreign rules and regulations.
  • It is recommended that a thorough inspection of your goods takes place before shipping so that only good quality products are shipped. You can hire a QC team to inspect the products.

Sourcing agents

  • Sourcing agents help firms to gain access to low cost supplies and products which helps them save money during production.
  • Sourcing companies are known as buying agents
  • Sourcing agents act as a connecting link between customers and suppliers.
  • Sourcing agents do not conduct promotional activities as they do not own a line of products of their own. They cannot sell their products.
  • Sourcing agents are customer oriented. Their main objective is to ensure consumer satisfaction and protect consumer rights.
  • For online companies like FBA sellers or Amazon,product sourcing is an important component of their supply chain.
  • They perform OEM services, that is, identifying the label manufacturers for Amazon private label .
  • Sourcing agents make their income by charging commission depending on the purchasing value which is around 5%
  • However, some sourcing agents prefer to have a fixed fee or salary.