Spotting Kickbacks In China Manufacturing: Middlemen Could Be Costing You
Description
Hidden commissions and kickbacks can still be found in China sourcing, and many importers are unaware that they’re paying for them. In this episode, Adrian and Renaud unpack how these schemes work, how agents and trading companies quietly erode your margin, and what a more transparent, safer sourcing model looks like.
Episode Sections:
00:00 – Intro & today’s topic: hidden commissions in China sourcing
01:32 – Agents vs trading companies: who are you really buying from?
03:01 – When a middleman does add value (and when they don’t)
07:48 – Transparent trading companies acting as a factory’s sales office
12:44 – Buyer-side agents, double commissions, and why it’s so tempting
18:01 – How traders quietly erode your margin with small opaque factories
21:48 – Short-term thinking, “circles” of trust, and why you’re outside of it
24:44 – Red flags with agents: pricing control, commission structure, and resistance to change
25:47 – Red flags with traders: factory visibility, visits, and compliance documents
26:56 – Moving to a safer model: when you may need a completely new supply chain
29:14 – Simple health-check: how well do you really know your supply chain?
31:00 – Why a lack of visibility puts your IP and business at risk
31:42 – Wrap-up, “health check your sourcing” call-to-action, and Sofeast support
Related content...
- Agent vs. trader vs. importer: what differences?
- Is My Supplier A Trading Company Pretending To Be A Manufacturer?
- Do you need a sourcing agent to buy from China?
- Chinese Suppliers: “Are you my factory?”
- Hidden commissions between China factories and sourcing agents
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