Sourcing agent or broker: who does what, and who pays whom

The sourcing agent works for you. Under a written mandate, he searches for factories, obtains quotes, follows production and reports to you. He does not buy the goods nor resell them: he acts on behalf of the buyer. Many agents are independents based in industrial zones, in Guangzhou, Yiwu or Shenzhen.

The broker is an independent intermediary. He connects a buyer and a seller, negotiates terms and receives a commission on the transaction. The profession is old in China and regulated: the Chinese civil code, in force since January 1, 2021, governs the intermediation contract and recognizes the broker's right to compensation. Some brokers limit themselves to making introductions; others go further and sign the purchase contract in their own name.

The trading company buys the goods for its own account and resells them to you. It invoices you a price that includes its margin, and it signs the sales contract with you. You sometimes do not know which factory produces: that is its business, not yours. Platforms like Alibaba, 1688 or Made-in-China are not intermediaries by default: they present catalogs, and you deal directly with the registered seller.

The sourcing agent is paid by the buyer. Two models coexist: a flat fee per assignment or per day, or a commission calculated on the order value. The transparency rule does not change: the agent must not receive anything secretly from the factory. If he does, his advice ceases to be neutral, and you negotiate with three parties without knowing it.

The broker receives a commission on the transaction. It may be borne by the buyer, the seller, or both. At many Chinese factories, it is the supplier that pays back a commission to the intermediary who brought the client: the buyer never sees it on the invoice. Ask in writing who pays what. A commission is not a flaw; a hidden commission is.

The trading company does not charge a commission: it takes a margin in its resale price. You only see its price, never the factory price. This opacity compensates a real service: factory sorting, order consolidation, contractual liability. But it prohibits any direct negotiation with the producer, since you are not in contact with him.

This is the point that determines your recourse. If you buy directly, your contract binds your company to the factory: in case of a problem, you go against it, in China, in Chinese, according to Chinese law. If you use a simple sourcing agent, the contract remains between you and the factory: the agent must act with diligence, but he does not bear product liability.

If your intermediary signs the purchase contract in his own name, the situation changes: he is your seller, and you go against him in Europe. This arrangement, the broker who endorses the contract, brings your recourse closer. In return, the signing intermediary takes a real risk: he is selective about the factories and products he agrees to cover.

With a trading company, the contract binds you to the trader: recourse is clear, but manufacturing is out of your control. Whatever the arrangement, check one thing before paying: the exact seller name on the proforma invoice, and its correspondence with the business license of the Chinese company. This name designates who will answer if the goods arrive non-conforming.

The right choice depends on volume, product, and the time you want to invest. The agent suits when you want to keep control: you sign with the factory, you see the ex-factory price, and the agent's compensation remains visible. Brokerage suits when you want a single point of contact and recourse in Europe, with a contract that can be endorsed in the intermediary's name. Trading suits small volumes, mixed containers and catalog products: its margin buys simplicity.

A signal should alert you: a third party who refuses to say how he is paid, or who imposes a factory on you without explanation. An honest intermediary accepts that you know the factory, the ex-factory price and his compensation. If he claims that the factory is a trade secret, or that the price is only discussed with him, look elsewhere.

Before signing a mandate or a first order, four checks are enough to eliminate most bad intermediaries. They require a few exchanges and a bit of method, not a trip.

These checks are part of serious sourcing. Our sinophone team in Guangzhou carries them out on site: company registration, actual address, production lines, consistency between what the intermediary promises and what the factory produces. We do not speak Chinese ourselves: handling the language and factory culture is this team's job.

Sorva is a brokerage and sourcing house between Europe and China. Our sinophone team in Guangzhou checks factories, negotiates prices and terms in Chinese, oversees production, and arranges merchandise inspection before loading. We can also take the purchase contract in our name: your recourse is then based in Europe, not just facing a distant factory.

In most cases, you pay no fees: you open a file, we negotiate the goods for you, and we take a volume commission on the ex-works value. This commission is written, itemized, and it adjusts with your volume. Open a file with your product: we will tell you if it can be imported, under what terms, and within what timeframe.