The “0 service fee” trap: who really pays the sourcing agent?

Many sourcing agents advertise “0 service fee” or “free sourcing”. The service is not free, the fee is hidden inside your unit price. Here is how the arithmetic works, and why it costs more than paying a flat fee.

How the hidden fee works

An agent who charges you nothing still has to be paid. The usual arrangement is a 10–15% markup added to the factory’s real unit price. You see one price; the factory sees a lower one; the agent keeps the difference on every unit, on every order, for as long as you keep ordering.

Do the maths on a real order

Take a product whose real factory price is $10.00. With a 10% hidden markup you pay $11.00; with 15%, $11.50. On 10,000 units that is $10,000–$15,000 of hidden fees, for a single order. Our factory list package costs $299 once, gives you three verified factories with their original quotes, and then you deal with them directly. On that same 10,000-unit order, the flat-fee route saves you roughly $9,700–$14,700, and the saving repeats on every reorder, because the factories are yours.

Three questions to ask any “free” agent

1. Will you show me the factory’s original written quote? 2. Will you introduce me to the factory directly, with contact details? 3. If I reorder next year without you, does my price change? If the answer to any of these is no, you are paying the hidden fee.

Our model, in one line

Flat published prices, paid by you, the buyer, see the price list. No factory listing fees, no promotion fees, no markup on unit prices, no supplier kickbacks. If a factory paid us, you could not trust our verification.