What is a Sourcing agent vs Distributor?

A distributor gets hold of products in a wholesale manner and sells it to various vendors at the current market price. He usually buys the products, stores them and then sells them at the preferred rate to anyone he wants.

workspace with people at computers

Sourcing April 26th, 2021 views

What is a Sourcing agent vs Distributor?

A distributor gets hold of products in a wholesale manner and sells it to various vendors at the current market price. He usually buys the products, stores them and then sells them at the preferred rate to anyone he wants.

However, a sourcing agent collects information about a wide number of vendors and manufacturers. He is responsible for sourcing the products you require and he gets the commission out of the above sale.

Differences between sourcing agent & Distributor.

Differences

Product range offered

A distributor has a specific set of inventory products that he deals with and sells. On the other hand, a sourcing agent has an in-depth knowledge of overseas markets too. They can arrange all kinds of products tailored according to your need and from the best quality vendors and manufacturers.

Customization of Products

When working with a distributor, the option to customize a product is not available since they have inventory products. However, a sourcing agent will have connections with a number of suppliers and vendors which will give you the choice to obtain perfectly tailored products. Not only that, the buyer also gets to make any final alterations if he feels the need to do so.

Varying costs

Working with a sourcing agent is cost effective as he gets a part of the commission based on the contractual agreement between the buyer and the vendor. You also get the products at factory cost while the distributor can charge you extra costs without your knowledge.

Availability of a prototype

When working with a sourcing agent, there is a possibility of receiving a prototype from the vendor before placing the actual order. They can help you gain those prototypes from best vendors at a low cost but a distributor cannot do so, because he only deals with finished products.

Factoring in time

If the buyer requires urgent and small quantities of product, then contacting a distributor is the better option since they have ready products to sell and this saves your time. A sourcing agent may take longer to source the products but they offer the best and desirable prices, products and services.

Quality Control

If a buyer chooses to work with a sourcing agent, they choose to gain access to a wider range of products with full control over prices and quality, in India as well as foreign markets. Moreover, the products can be custom made as well as altered if the need arises. The sourcing agent can help the buyer to get customized products but a distributor cannot do so because he deals with finalised goods and products.

It all boils down to your requirements as a buyer. List down your priorities and decide if you prefer to work with a sourcing agent or a distributor.