China sourcing agent or getting matched with manufacturers: how each route works and what it costs

Two ways to find a factory in China without searching alone

A sourcing agent works for the buyer. US customs describes buying commissions as fees paid to a bona fide buying agent for services it performs on behalf of the buyer^[1], and an agent as not the actual buyer or seller of the goods but a third party performing services for one of them^[1]. The work CBP lists as typical of a buying agent is compiling market information, gathering samples, translating and locating suppliers^[1]. You still buy from the factory: the purchase contract, the price and the deposit are between you and the factory, and the agent bills its own fee on top.

Getting matched introduces you to the factory. A matching service suggests manufacturers that fit your request and names each one. From there the quote, the purchase contract, the price and the deposit are between you and the factory, as they are with an agent, but nobody is paid to negotiate, follow production or chase the order for you. That work stays with you, or you hire it in, such as an inspection company for the goods before the balance is paid. A third route, buying from a trading company that resells in its own name, is covered in its own glossary entry.

What US customs sees

The difference is more than a label, because duty is charged on the value of the goods and the two models reach that value differently.

• A real buying agent's fee is usually not dutiable. CBP says bona fide buying commissions are not included in the transaction value of imported goods^[1]. The exception: buying commissions are included in transaction value when they are part of the total payment the buyer makes to the seller^[1].
• Selling commissions are dutiable. Under the customs valuation rules, any selling commission incurred by the buyer is added to the price to reach transaction value^[2].
• The importer has to prove the agency. CBP says the importer bears the burden of proving a bona fide buying agency relationship^[1]. Courts look at control, including which party bears the risk of loss, who absorbs shipping and handling costs, and who controls how the seller is paid^[1].
• An "agent" that behaves like a seller is a seller. CBP warns that a so-called buying commission may actually be the intermediary's markup, which is part of the price and of transaction value^[1].

In practice, an agent that takes title to the goods, sets its own resale price or collects the whole payment and pays the factory itself may be treated as a seller, and its fee as part of the price. If you want the agent model and its customs treatment, you need a written agency agreement, invoices from the factory in your name and the agent's fee billed separately. With a direct contract and no agent, there is no agency to prove and no agent's fee to keep out of the price: the price you pay the factory is the starting point for customs value.

Who carries the compliance load

Neither model moves the importer's legal duties to someone else. Under US law, the importer of record is responsible for using reasonable care to enter, classify and determine the value of imported merchandise^[3].

For China that duty is heavier because of the Uyghur Forced Labor Prevention Act. Where the UFLPA applies, the law requires clear and convincing evidence, supplied by the importer of record, that goods sourced from the XUAR or a listed entity were not made with forced labor^[4]. A seller can help, since CBP says a third party such as the seller can submit supply chain documents to CBP, but the importer should be notified and pays storage for detained shipments^[4]. Among the elements CBP says an effective due diligence system may include is training on forced labor risks for employees and agents who select and interact with suppliers^[4]. So whichever route you choose, agree in writing who will trace the raw materials, and get the documents before the goods ship.

Checking every company you pay

Whether you hire an agent or contract a factory you were introduced to, check each company you pay, the agent included. Chinese company records are in the enterprise credit information publicity system, where Chinese regulators publish a company's registration and filing information^[5]. Ask for the business license, check the registered name and business scope, and make sure the name on the invoice and on the bank account is the same.

On-the-ground checks in China have limits. The US government reports that Chinese security officials raided and detained staff at several multinational due diligence companies in 2023^[6]. Book inspections and audits early, and keep your own copies of every report.

Which route fits you

An agent tends to fit when you want someone in China to search, negotiate and follow production, and the order is large enough to carry its fee. Getting matched tends to fit when you want to own the factory relationship from the first quote and are ready to manage quality and paperwork yourself, or to pay an inspector for that part. On both routes you are normally the importer of record, so the UFLPA and reasonable-care duties above stay with you. If you are weighing Vietnam as well, the page on a Vietnam sourcing agent sets out the origin rules a Vietnamese order has to meet.

We are not an agent: we introduce you to manufacturers in China that fit your request, name each one, and do not act for you or for the manufacturer. If none fits, we tell you. It is free for brands. Send us your specification and target quantity, and the manufacturers quote you directly, each with its own shipping terms.