What do a sourcing agent and a freight forwarder do when importing from China?
Lars HurkmansCo-founder24 June 2023Reading time 4 minutes
A sourcing agent finds and assesses suppliers in China and negotiates on your behalf; a freight forwarder then arranges transport from the supplier to your door. Your goods travel to the Netherlands by air, sea or rail freight, where the weight or volume of your shipment determines shipping costs and you pay customs fees and import duties on top.
What does a sourcing agent do when importing from China?
A sourcing agent finds and assesses suppliers for you in China. They are a professional specialised in finding suppliers and products, often with an extensive network and knowledge of the local market. That way they find the best suppliers based on price, quality and reliability. The import process starts with finding a reliable supplier, and that's where a sourcing agent comes in.
An example of an experienced sourcing agent is Maarten de Vreeze, known for his network and connections in both the Netherlands and China. He can help negotiate prices, draw up contracts and resolve issues that come up. That's useful if you don't know the Chinese market or don't speak the language. If you want to find and approach suppliers yourself, you can read how that works in the step-by-step plan for sourcing from China and in sourcing on Alibaba. How you're taken seriously at the table is covered in communicating with Chinese suppliers.
What does hiring a sourcing agent cost?
The cost of a sourcing agent varies with the complexity of the product and the amount of work needed to find the right supplier. Some sourcing agents charge a fixed rate, others a percentage of the total order value. Include these costs in your budget, because they can make up a significant part of the total costs.
What does a freight forwarder do, and how do you get your goods to the Netherlands?
A freight forwarder arranges the transport of your goods from China to the Netherlands. A freight forwarder, or forwarding agent, is a company specialised in organising shipments for individuals or businesses. They arrange the whole process, from picking up the goods at the supplier to delivering them at your door or warehouse. Once you've chosen a supplier and ordered your products, the freight forwarder comes into play.
How are forwarding costs calculated?
Forwarding costs are determined by a combination of the weight, dimensions and volume of the shipment, summarised as the dimensional weight. You calculate the dimensional weight by multiplying the length, width and height of the package and dividing that by a standard DIM divisor. Shipping companies charge based on the actual weight or the dimensional weight, whichever of the two is higher.
An example: suppose you have a package that weighs 50 kg (gross weight), but the volume is so large that the dimensional weight comes out at 67 kg. Then you're billed based on the dimensional weight of 67 kg, because that's higher than the actual weight.
Which shipping method you choose depends on the size and weight of your shipment, how fast you need the goods, and your budget. You can ship goods from China to the Netherlands by plane, cargo ship, train, or a combination of these.
What extra costs come with shipping?
Besides the freight costs, you may face extra costs, such as customs fees, taxes and handling costs for the shipment. These costs vary with the value and type of goods you import.
What shipping options do you have from China, and what do they cost?
You have four shipping options from China: air freight, sea freight, rail transport, or a combination of these. Which one fits depends on your needs and your budget.
Air freight is the fastest option, but also the most expensive, and most suitable for light, small products or urgent shipments. Sea freight is the cheapest option and ideal for heavy, large shipments that aren't urgent. Rail transport sits in between, both in cost and shipping time.
For sea freight there are different containers: 20ft, 40ft and 45ft. The choice depends on the size of your shipment. Generally speaking: the bigger the container, the cheaper the shipping cost per cubic metre.
How much do you pay in customs fees and import duties?
When importing from China you pay customs fees and import duties. These costs are based on the value of the goods and the type of product you import. Include them in your budget, because they can make up a significant part of your total costs. If you want to know exactly how import duties and VAT are calculated, read Incoterms, import duties and VAT when importing from China.
Once you know these costs, you know your cost price per unit. What you keep from that on bol, you calculate with the profit calculator.
What alternatives are there to a sourcing agent and freight forwarder?
There are two alternatives to hiring a sourcing agent and freight forwarder. The first is to arrange sourcing and transport yourself. That can be time-consuming and requires good knowledge of the market and the transport process.
The second is a full-service import company. Such companies offer a complete package of services: sourcing, transport, customs handling and delivery. That can be a good option if you don't have the time or expertise yourself to arrange these matters.
Are a sourcing agent and freight forwarder worth it?
A sourcing agent and freight forwarder can significantly simplify importing from China and save you time, money and stress. Importing from China involves many factors to take into account. Weigh your options carefully and choose what best fits your situation and needs.
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