How to choose a China sourcing agent
Rubric for evaluating China sourcing agents: questions to ask, which answers are red flags, and how to compare two quotes without fixating on commission.
A China sourcing agent is chosen by comparing the total cost landed at your warehouse for the same product, the same volume and the same route — not the commission percentage. Demand three pieces of data from each candidate: the factory price and the commission separately, the freight rate with the carrier’s name, and the list of what is included together with the price of what is not. On a USD 20,000 order, an agent declaring 4.5% can cost USD 1,861 more than one declaring 8%, because it recovers the difference in the unit price, in the freight and in the exchange rate.
The percentage is a number on a service; the cost is a sum of line items, and three of them never appear in the conversation about commissions.
Why the commission percentage is useless for comparison
The commission is the price of a service whose cost does not grow with the value of the goods. Verifying a factory, negotiating in Mandarin, receiving at the warehouse and inspecting a batch costs practically the same on a 5,000-dollar order as on a 50,000-dollar one. Two agents quoting the same 7% can be selling very different operations.
What grows with the order is the margin inside the other line items, three of which are invisible if you only look at the percentage: the surcharge on the unit price, the surcharge on freight and the exchange-rate spread. All three scale with the operation and vanish the moment you receive a final price.
What you compare is the total landed cost. Per agent, add up: factory price + fees + freight + insurance + handling and storage + destination clearance and duties. The agent decides the first three. The last two depend on your tax situation, the Incoterm and the tariff classification your customs broker assigns, so they do not help you choose between agents.
Two quotes under different Incoterms are not comparable. A DDP includes destination clearance and duties; an FOB or a CIF leaves them on your side.
The three numbers to get out of every agent
Without these three pieces of data — factory price and commission separately, freight rate with the carrier’s name, and the list of what is included with the price of what is excluded — the comparison is arithmetically impossible. With them it is trivial.
- The factory price and the commission, separately. A final price does not tell you which part is goods and which part is service. The factory price is verified with the factory’s invoice — a document from the manufacturer, not from the agent.
- The freight rate and the carrier’s name. With the name you request the original quote and check for a surcharge. Without one, freight is a number nobody can verify.
- The list of what is included and the price of what is not. Not a brochure: a document with line items and prices. “All inclusive” is not an answer.
A fourth piece of data decides what you end up paying: the exchange rate applied to the yuan conversion. The onshore yuan (CNY) moves within a 2% band around the People’s Bank of China’s daily reference rate; the offshore yuan (CNH) floats freely. A rate you cannot compare against the day’s published reference is a hidden margin under another name.
The rubric: seven questions and which answer is acceptable
| Criterion | What to ask | Answer that passes | Red flag |
|---|---|---|---|
| Factory invoice | Will you give me the factory’s original, unmodified invoice? | Yes, with the manufacturer’s name and the quoted price | “We issue our own invoice” or a final price with no breakdown |
| Inspection before the balance | Is the balance released before or after I approve an inspection report? | Against an approved report on finished production | “100% is paid on confirmation” or “we do the inspecting ourselves” |
| Payment destination account | Which account is the order paid into? | The supplier company’s account, with a holder matching the licence | Any personal account, a third party’s, or one in another jurisdiction |
| Published own price | Where is your price published and what does it include? | Public tiers and a document listing what is included and excluded | “It depends on the case”, with no ranges or line items |
| Person responsible | Who handles my order and what is their name? | A name, a job title and a direct channel | Only a company, a generic chat, or a salesperson who rotates |
| A batch that fails | What happens if the batch fails inspection? | The balance is withheld, the factory corrects or remakes, with a deadline and a named owner in writing | “That never happens” or “we talk to the factory and sort it out” |
| Yuan exchange rate | What rate do you apply to the RMB conversion and against what reference do I compare it? | A declared rate, comparable with the published reference of the day | “The rate of the day” with no reference, or a fixed rate above the market |
The concrete red flags
A commission below 3% is not competitiveness: it is a price that does not cover the work. The market range runs from 5% to 10%, and below a certain volume no percentage covers the fixed cost of verifying, receiving and inspecting. The difference comes back through one of the other three line items, on every order.
Refusing to show the factory invoice. Without an invoice you cannot know whether you paid the factory price or that price plus a margin. The excuse — “that is our commercial information” — describes exactly the problem.
Freight quoted with no carrier. If the agent cannot name the shipping line or airline behind the quote, that freight is a selling price, not a passed-through cost.
“Free” storage that is always invoiced. The right practice is to publish the days included and the rate that applies after them. If it is free in the pitch and appears on the invoice of every order, it is a variable line item disguised as a courtesy.
Commission plus a separate “order management” invoice. That is not one commission: it is two commissions under different names. The work it describes — placing the order, talking to the factory, tracking the deadline — is what the commission was already supposed to cover.
Payment to a personal account. This is the door through which bank-detail-change fraud and the supplier who disappears with the deposit come in. The company account is what makes someone exist to claim against.
What an agent cannot do, even if they promise it
An agent cannot guarantee that the factory will comply. It can verify the company exists and manufactures, negotiate price and lead time, inspect the batch and withhold the balance until it approves it. That is leverage, not a guarantee. The only real guarantee is that the balance stays in your pocket while the batch is non-conforming.
An agent does not control the customs of the destination country. In Mexico, clearance is handled by the importer or its legal representative accredited before the SAT, or by a customs agent or agency acting as consignee or mandatary, under article 40 of the Ley Aduanera. In Brazil, whoever imports must be enabled in the Receita Federal’s RADAR, which requires a Brazilian CNPJ and different modalities by estimated monthly volume. None of that is resolved by an agent in Shenzhen.
An agent does not remove the commercial risk of your inventory. A product that arrives in good condition does not mean it will sell. Dead stock, the wrong selling price and demand that never appears are your risk.
An agent cannot certify your product in advance. Standards are tested on the finished product, so certification is a design constraint, not a last-minute formality.
Mexico and Brazil: what changes when you compare
The evaluation rubric is the same for an agent working for Mexico as for one working for Brazil. What changes is which part of the work the agent can resolve from China and which part nobody can resolve.
| Point | Mexico | Brazil |
|---|---|---|
| Certification that filters the list | NOM, according to the product category | ANATEL homologation, plus Inmetro certification where applicable |
| When it is required | The certificate is obtained before shipment; testing is carried out on the finished product | ANATEL homologation is a precondition for import in order to commercialise |
Practical consequence: in Brazil, “do you coordinate ANATEL homologation?” filters the list almost by itself, because without it the cargo does not clear. In Mexico the equivalent filter is the NOM.
Two quotes with numbers: when 8% comes out cheaper than 4.5%
A USD 20,000 order of TWS earbuds, 6 m³, consolidated sea freight, destination Mexico City.
| Item | Agent A (8% declared) | Agent B (4.5% declared) |
|---|---|---|
| Factory invoice | USD 20,000 | USD 20,000 |
| Surcharge on the unit price | 0 | +USD 1,900 |
| Commission | USD 1,600 | USD 990 |
| Sea freight (6 m³) | USD 1,350 (carrier rate) | USD 1,790 |
| Exchange-rate spread | 0 | +USD 430 |
| Pre-shipment AQL inspection | USD 299 | not contracted |
| Total disbursed | USD 23,249 | USD 25,110 |
The agent with almost double the commission comes out USD 1,861 cheaper, and it also inspected the batch. What agent B keeps is USD 990 of commission plus 1,900 of surcharge on the product, 440 of surcharge on the freight and 430 of exchange-rate spread: USD 3,760, 18.8% of the value of the goods. The commission was not the price: it was the visible part of the price.
The line item missing from B’s column is the one that costs most in the long run: an uninspected batch is discovered in the returns, once it is sold and the supplier has been paid. A pre-shipment AQL inspection is a fixed fee per inspector-day and does not scale with order value.
What changes as volume grows
The commission is renegotiated when you cross a volume tier, not when the last order feels expensive. In MeliPrep’s published tiers — 8% up to USD 5,000 a month, 7% between 5,000 and 25,000, 6% between 25,000 and 100,000, and 5% above that — the jump from 7% to 6% happens at USD 25,000 a month. If your volume is already there and you still pay the previous tier, nobody reviewed the tier.
Beyond a certain volume, the commission stops being the main lever. Once volume stabilises, ask for the following in writing:
- Quarterly review against actual volume, using the invoiced figure, not the one promised at signing.
- Payment terms: the split between deposit and balance, and whether the balance is released against an inspection report.
- Storage: days included and the rate per m³ per week after that.
- Freight quoted in your name, by the carrier or the forwarder directly. It is the line item where the most money moves after the goods.
- An assigned point of contact: a name that answers for your account and what happens when they are away.
- A sealed reference sample: the one from the approved batch turns the next inspection into a comparison rather than an impression.
The commission is the visible part of the price. The other three line items — unit price, freight and exchange rate — can move unnoticed. The agent worth choosing is not the one who charges least: it is the one who lets you check all three. Before you take a single call, a landed-cost calculator makes those four numbers explicit.