What is a Sourcing Company? What are They and What Do They do?

When you need to find suppliers to manufacture your goods or provide you with materials, you have two choices. Either you track them down yourself, or you work with a sourcing company.


Read on if you’re looking to gain a thorough understanding about sourcing companies and find the answers to all your questions about how they can help you expand your business.

What is a sourcing company?

A sourcing company is a business that specialises in locating suppliers and manufacturers on behalf of their clients to manufacture the goods they need to run their business.

Sourcing companies make it their mission to negotiate terms with suppliers and obtain the best possible prices and quality, so their clients can land the best deal possible.

Sourcing companies often have strong relationships and a long history of working with their suppliers, meaning they are in the ideal position to negotiate favourable terms for their clients.

Effectively, the job of a sourcing company is to manage the entire procurement process. In that way, they play a crucial role in supply chain management, especially for businesses that rely on outsourcing or international trade.

What does a sourcing company do?

A sourcing company overall acts as a specialised intermediary between their client and third-party suppliers. They provide expertise, market knowledge, and operational support to ensure efficient and cost-effective procurement.

Sourcing companies will typically engage in the following activities:

  • Finding and evaluating right suppliers: Sourcing companies research and identify potential suppliers based on their client's requirements, industry expertise and market knowledge. They will then create a database of reliable suppliers and maintain relationships with them. In evaluating these suppliers, they will often conduct site visits, interviews, and background checks to ensure the suppliers meet the client's standards.

  • Request for Proposal (RFP) management: Sourcing companies help clients create comprehensive RFPs that outline the specifications and requirements for the products or services needed. They will generally manage the entire RFP process, including sending the RFPs to potential suppliers, collecting and analysing the responses, before finally shortlisting suitable candidates.

  • Negotiation and contracting: Sourcing companies negotiate with suppliers on behalf of their clients to secure favourable terms, prices and contracts. They will utilise their industry knowledge and bargaining power to achieve the best possible agreements.

  • Quality control and inspection: Sourcing companies may conduct quality control checks and inspections to ensure that the products or services meet the required standards and specifications. They may inspect the manufacturing facilities, perform sample testing and implement quality assurance processes to ensure consistency and reliability.

  • Logistics and shipping: Sourcing companies handle logistics and shipping arrangements, including coordinating transportation, customs clearance and delivery to the client's location. They will usually work closely with freight forwarders, shipping companies and customs agents to ensure smooth and timely delivery.

  • Supply chain management: Sourcing companies monitor and manage the overall supply chain to optimise efficiency, minimise risks and enhance cost-effectiveness. They may track inventory levels, identify potential bottlenecks and suggest improvements in the procurement and distribution processes.

What is the benefit of using a sourcing company?

A sourcing company takes on the responsibility of helping your business with a sourcing strategy and finding suppliers for you to manufacture your goods, so you can land a good deal with a reliable and trustworthy sourcing agent.

Some of these benefits in more detail include:

Expertise and market knowledge
Sourcing companies have specialised knowledge and expertise in identifying reliable suppliers and manufacturers in various industries, that many other companies probably don’t have.

Because sourcing companies possess extensive market knowledge, including understanding market trends, pricing, and quality standards, they can leverage this knowledge to find the best suppliers that can meet their clients’ specific needs.

Time and costs savings
Finding a supplier that meets your needs takes an incredible amount of time and effort. Engaging a sourcing company therefore saves businesses the time in supplier selection, negotiation and due diligence.

Sourcing companies often already have an extensive network of pre-vetted suppliers, which allows them to quickly identify and shortlist potential vendors based on a business's specific needs.

Risk mitigation and quality assurance
Sourcing companies are experts when it comes to ensuring quality and conducting due diligence procedures. They are the masters of conducting thorough supplier assessments, including evaluating their financial stability, production capabilities and quality control processes.

By doing this, sourcing companies help mitigate risks associated with working with unreliable suppliers, such as late deliveries, subpar quality or unethical practices. Sourcing companies often have strict quality control protocols in place, ensuring that products or services meet the required standards and specifications, reducing the likelihood of defective or non-compliant goods.

When should I use a sourcing company?

If you run a business, then you should use a sourcing company when you need help finding suppliers that can manufacture your goods to your specific standards, and ensure that they can arrive at your premises in a timely fashion and without hassle.

As your business expands, it’s likely that so too will your supply network. The amount and types of materials you require can increase, and can also change. It therefore makes sense to use a sourcing company when you start to need materials that are manufactured elsewhere in countries like Vietnam and China.

How can I find a sourcing company?

One common approach is for business owners is to network with other businesses and industry professionals, seeking referrals along the way. Additionally, many sourcing companies will advertise their services online or through industry publications, in order to reach a wider audience. Some companies may also use targeted marketing campaigns or attend trade shows and other events to connect with potential clients.

You’re also currently on the website of a reputable sourcing company right now! You can learn more about The Sourcing Co and what we do right here.

What makes a great sourcing company?

A great sourcing company works with you over a long-term period to help you grow and evolve, offering their expertise on opportunities and being clear with you about financial implications and costs.

In particular, you’re going to need to look for:

  • Expertise – a sourcing company with a diverse team of experienced staff who have the knowledge and the networks to enable them to achieve a top-level sourcing service.

  • Experience – ideally, you’ll want a partner who has been in the game for a long time, and who have partnered with hundreds of businesses across the world.

  • Communication – sourcing companies need to communicate with their clients effectively. You need to make sure that they are committed to keeping their customers informed every step of the way. Ideally, they’ll be able to speak multiple languages and be experienced in cross-cultural communication.

  • Compliance – And of course, you’ll need a sourcing company that understands all of the rules and regulations involved in sourcing products internationally (as there are many)!

Why choose the Sourcing Co as your go-to sourcing company

The Sourcing Co are an international sourcing company based in Guangzhou, in the manufacturing heart of China. Through our international sales offices, including in Brisbane Australia, our expert team are here to help you with everything a sourcing company can do, plus more.

We’ll help you with:

  • Product development: Developing your product from concept and sampling, all the way to production

  • Sourcing: Matching you with suppliers that offer you the best value for money and quality

  • Negotiating: Obtaining the best quotes for your suppliers to manufacture your goods and products

  • Shipping and warehousing: We aim to ensure the whole shipping process is as easy as possible for you, transporting goods by air, sea, road or rail.

Because of our reach and network, we can get you access to suppliers and negotiate favourable terms far more quickly and cheaply than you could if you were trying to on your own.

Let us open the door for you, and to our global network of suppliers. We can take care of every step in procuring your needed products.

Let the team at the Sourcing Co be your one-stop-shop for product sourcing, production and delivery. We’re on your team and will be right alongside you as your business booms and your brand takes off. Learn more about us or contact us today to discuss the order process.