The second thing to do is to find an agent. Agents used to be more popular than they are now. An agent is just somebody who understands importing better than you do. They’ll typically take a fee of somewhere between eight and fifteen percent to go out and put together your deal for you: to source your product and to find your manufacturers.
There are a couple of problems with agents. One problem with agents is that they typically don’t want to mess with you if you’re not doing volume. They claim to only take a small percentage, so they don’t want to go through a lot of trouble. Did you hear the key word in that phrase? It was “claim.” They claim to take a small percentage. I have yet to ever meet an agent – at least one on the Asian side of the water, in Hong Kong or China – that didn’t have a back door deal with a factory.
So they’re going to be charging you on your side. They’ll swear to everybody on earth that they’re not making any money on the back side and that is bullshit; they’re all making money on the back side, every single one of them. That’s just something that you need to accept, deal with, and get over. As long as they are a quality agent and providing you some services, then that’s just the nature of the beast.
There are basically three agents. I typically avoid Hong Kong and Shanghai agents, especially Hong Kong agents. I’ve never had a Hong Kong agent quote me a reasonable price on anything – ever. If you’ve not been to Hong Kong before, it’s an incredibly international metropolitan city. It cost a fortune to live in Hong Kong. If you’re an agent living in Hong Kong, I’d say that those guys are making a minimum of anywhere from $500,000 to one million dollars a year brokering goods. Unfortunately, based on their circumstances, they have to make a lot of money on the front and backend of you to make it work.
Shanghai is becoming the new Hong Kong. A lot of guys are now moving from Hong Kong to Shanghai, or they have an office now in Hong Kong and Shanghai. Does that mean that every Hong Kong broker and Shanghai broker is a bad guy? Absolutely not, but the ones that I’ve had experience with in the past have not been good.
If I were you and looking for an agent, I would look up Trade Agents in Guangzhou. Guangzhou is more “real China.” That’s what I call it anyway. When you’re in Shanghai, it’s all pretty and shiny. It’s westernized. Hong Kong is incredibly westernized, too. However, when you’re in Guangzhou in Southern China, you’re still really in China. A huge percentage of what’s manufactured in China is manufactured in the south, in Guangzhou. This is because a lot of the raw materials are down there. It’s in Southern China.
You can also go to a Stateside broker. If you use a Stateside company you need to make sure that they have an office in China. You need to get the address and phone number of the office in China, and be sure to call the office and make sure that they aren’t full of crap. You’re going to have to do a little due diligence here when it comes to your brokers.