The clearest red flags are an agent who will not tell you the factory's real name, wants you to pay the goods money to them, or will not put the fee and its independence in writing. Each one means you cannot see what you are really paying for.
Most bad agents are not crooks. They are traders or factory representatives presenting as independent agents. The checks below help you tell the difference before you pay anything.
Red flags about money
- The agent asks you to pay for the goods into its own account rather than the factory's.
- The agent's fee is "free" to you, or bundled into the product price so you cannot see it.
- The agent will not confirm in writing that it takes no payment from factories.
- The agent's fee rises with the price you pay the factory, so a higher price helps it.
- Third-party costs, such as lab tests, are charged as a lump sum with no receipt.
Red flags about transparency
- The agent will not give you the factory's legal name, address and registrations.
- Lab reports arrive forwarded by the agent or the factory, not from the laboratory.
- The agent discourages factory visits, or wants to meet at a hotel or office instead.
- Invoices come from the agent's company rather than the factory.
- The agent refuses to show you the factory's own quote.
Red flags about the business
Check that the agent is a registered business, as explained in verifying a sourcing agent is registered. Be cautious of an agent with no fixed address, no company registration, or contact details that are only a mobile number and a free email account.
Watch for promises that sound too good. No honest agent can guarantee the lowest price in India or perfect quality on every lot. A good agent tells you about risks, including ones that make the job harder.
Also watch for an agent who knows a single factory very well and no others. That agent may really be the factory's sales arm. Our guide on telling a trader from a manufacturer applies here too: visit, and see who actually makes the goods.
Good signs to look for
A good agent explains how it is paid without being asked, and puts it in a short written contract. It names the factories on the shortlist, has the laboratory send certificates to you, and asks you to pay the factory directly. It welcomes your visits and sends reports with real photos and dates.
A good agent also asks you a lot of questions at the start. An agent who promises results before understanding your product is guessing.
Next step
We are registered for export trade (IEC) and as a small enterprise (Udyam), and we take nothing from factories. To ask us the hard questions yourself, book a free sourcing review.