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What a sourcing agent actually charges — and what the fee hides.

Three charging models are common in China. They produce very different behaviour when a problem appears, and they are almost never quoted on the same basis — which is why the cheapest proposal is often the most expensive one.

Written by the Qianhe Sourcing team, Guangzhou · Last updated November 2026

Short answer: sourcing agents in China charge in one of three ways — a percentage of order value, a monthly retainer, or a fixed fee per order or per task. The percentage model is the most common and the least transparent, because the agent's income rises with the price you pay the factory. A fixed fee removes that conflict but leaves the agent exposed if the project runs long. Comparing proposals means converting all three to the same number: total cost to you for a named scope, at a named order value.

The three models, side by side

ModelHow it worksTypical rangeWhere the conflict sits
Percentage of order valueA commission added to the factory price, usually invisible on the invoice3–10% of FOB valueIncome rises with the price you pay — nobody is rewarded for negotiating the factory down
Monthly retainerA fixed sum per month covering an agreed scope and volumeVaries widely; usually for ongoing programmesVolume is capped by the retainer — heavy months get less attention per order
Fixed fee per order or taskA quoted price for a defined scope: sourcing, sampling, inspection, a factory visitQuoted before work startsScope creep — work outside the definition becomes a change order

Why the percentage model is the one to interrogate

A percentage commission is not dishonest by itself, and many established agents use it. The problem is structural: if the agent earns 5% of what the factory charges, the agent earns more when the factory charges more. That does not automatically produce bad behaviour, but it means the incentive is absent at exactly the moment it matters — when a factory quote should be pushed down, or when a cheaper qualified factory should be proposed.

The practical test is not whether a percentage is used, but whether it is disclosed. Ask three questions: Is the commission visible on the quotation I receive? Does the agent disclose the factory's own price separately from the agent's fee? And if a cheaper factory is found after the quote, does the agent's fee fall with it? An agent who answers all three in writing is safe to work with even on a percentage. An agent who cannot answer the second one is not telling you where the money goes.

What the fee usually does not cover

Almost every dispute about sourcing fees comes from a cost line nobody named in advance. Before comparing proposals, confirm whether each of these is included, excluded, or passed through at cost:

  • Factory visits and travel — how many, how far, billed how
  • Sampling: the sample cost, the courier cost, and repeat rounds
  • Third-party laboratory testing
  • Inspection: per visit, per man-day, or per container
  • Tooling and mould ownership, and what happens to it if you leave
  • Consolidation, warehousing and re-packing at origin
  • Documentation, certification of origin, and any legalisation
  • Payment handling: who holds the money, and what the transfer costs

A proposal that lists these is longer than one that does not. It is also the only one you can compare.

Converting proposals to one number

To compare a percentage proposal against a fixed-fee proposal, model a real order rather than a hypothetical one. Take a live requirement — say 300 windows, or 40 bathroom pods — and ask each agent to quote the full scope on that requirement. Then add up: agent fee + sampling + testing + inspection + travel + consolidation, and divide by the order value. The result is a single percentage you can compare, and it usually surprises people: fixed-fee proposals look expensive per hour and cheap per order, while percentage proposals look free and become expensive at volume.

Do the same exercise at half the order value. A model that only works at one order size is not a pricing model, it is a fit to one number.

The fee is not the main cost

On a first order in an unfamiliar category, the fee is rarely the largest number on the table. The larger numbers are a specification that was never closed, a material grade that was quietly substituted, and a load that fails inspection after the balance has been paid. A 3% commission on a shipment that has to be reworked is more expensive than a 7% fee on one that does not.

This is not an argument for paying more. It is an argument for reading the fee as a signal: an agent who cannot explain what the money buys, line by line, is unlikely to be able to explain what went wrong in a factory either.

Questions worth asking before signing

Is your fee a percentage of what I pay the factory?

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Ask for a yes or no in writing, then ask to see it on a sample quotation. A disclosed percentage is workable. An undisclosed one means the agent's margin and the factory's price are the same number, and you cannot tell which is which.

Do you take anything from the factory?

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Factory commissions, rebates and referral payments are common in this market and are usually invisible to the buyer. If an agent takes money from both sides, no fee structure can make the recommendation independent. The answer should be specific, not reassuring.

What happens if the order is cancelled or the factory fails?

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Ask what is refundable, what is already spent, and who carries the loss if a deposit is at risk. Vague answers here are the ones that turn into disputes.

Can I see the factory's own quotation?

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This single question separates most agents. If the factory price and the agent fee are shown as separate lines, the structure is auditable. If you only ever see one blended number, you are being asked to trust rather than check.