| | Can China-based sourcing agents replace US-based purchasing managers?
The average annual salary (exclusive of bonus and benefits) for a US-based Purchasing Manager is USD 90,558. But for purchasing managers in China, even adding bonus, mandatory benefits, dorm/housing and meal allowances, the direct labor cost is still less than USD 15,000 per year.
For an experienced senior Chinese manager, they earn around USD 30,000 a year but the cost is still a fraction of the amount needed to engage professional staff in developed economies, such as North America, the EU, and Australia/NZ.
This means outsourcing the supply chain management function to a lower-cost country could benefit not only from physical proximity to supply base, but also significantly reduced HR cost.
However, setting up an office and managing a team in China is not easy as there are cultural, legal and other barriers.
If China-based sourcing agency is used instead, there are some risks - lack of professionalism and transparency, too much over-selling and under-delivery. Some agents may receive secret commissions from the factory, while claiming themselves the "buyer representatives".